Sycamore considering updates to pension policies for police, firefighters

SYCAMORE – The Sycamore City Council during its Monday meeting could approve a funding policy for the city’s police and firefighter pension plans, according to city documents.

Sycamore City Manager Michael Hall is expected to give a presentation regarding how the city can handle funding its police and firefighter pension funds, which will need to reach at least a 90% funded ratio within a couple of decades. The meeting will begin at 6 p.m. Monday at the Sycamore City Center, 308 W. State St.

The pension topic is up for consideration, according to agenda documents.

The proposed pension funding allocation policy has three parts: annual audit excess revenue allocation, actuarially determined contribution compliance, and sustainability and fiscal responsibility.

Regarding annual audit excess revenue allocation, officials wrote that beginning with the fiscal 2023 audit, the city will allocate 10% of any excess revenue identified during the audit process to pay for police and firefighter pension plans.

“This allocation will supplement the city’s actuarially determined contribution and enhance the financial stability of the pension funds,” Sycamore officials wrote.

Officials also wrote that they’ll calculate the city’s actuarially determined contribution – the amount needed to fund benefits of the pension plan over time – to make sure the annual contributions are enough to meet the cost of the pension plans.

The pension funding policy, if approved by the City Council, would take effect immediately and would be reviewed annually, like the city’s budget planning and audit processes, according to city documents. Changes to the contribution strategy could be made as needed, however.

“By dedicating a portion of excess revenues to pension funding, the city aims to avoid large increases in future contribution requirements promoting budget stability,” city officials wrote of the proposed policy.