Galesburg Mayor Sal Garza is forming a 14-member task force to develop funding options for the city's pension funds.
“If it goes unchecked and unaddressed, we may find ourselves in the same kind of condition that the state of Illinois' overall pension system is in,” Garza said.
City leaders said the funding ratio has dropped over the past decade for the three pension funds in which the city participates. Garza said Galesburg will need to dip into its general revenues to pay pension obligations if something is not done.
“If that happens, that means that there is going to be less money for other projects,” Garza said. “It's going to impact every aspect of running a city.”
Garza said the Pension Funding Guiding Committee will provide its findings to the city council by August 31. He said the use of pension obligation bonds is a possible option, but he is not ruling out any ideas.
Garza said the pension funds are being impacted by a volatile market. In addition, people are living longer, which means the payout period for retirees has been extended.
“Some of the actuaries are actually using dated assumptions. For example, assumptions of a person living to a certain age. The life expectancies have been extended because of the health care we have today,” Garza said. “Some of these actuaries are using assumptions that were established back in the '60s.”
Garza will chair the Pension Funding Guiding Committee. Other members include City Manager Todd Thompson, City Treasurer Marvin Dahlberg, City Clerk Kelli Bennewitz, Police Chief David Christensen, and Fire Chief Tom Simkins.
The committee will also include a member from the Police Pension Board, a member from the Fire Pension Board, members from the three unions representing city employees, and a retired employee representing each of the three pension plans.