OCEAN CITY — Despite having a stellar year with the investment returns in the town’s pension plans, a debate ensued this week over lowering the percentage assumptions going forward.
During Tuesday’s work session, the Mayor and Council got an update on the town’s recent pension committee meeting. Ocean City has two pension plans, one for general employees and a separate plan for public safety employees. While both are healthy, the town and its employees invest in stocks, mutual funds and other assets to grow the pension plans and keep them with solid returns. The pension committee consults with investment consultants, whom advise where best to invest the town’s pension contributions for the biggest bang for the buck.
Ocean City’s stated target goal for return on investment is 7%, but there have been years recently, especially during the pre-COVID years in 2018 and 2019, when that mark fell short. This year, however, the town’s return on investment for the pension funds soared to over 30%. With uncertainties going forward, one of the recommendations from the consultant was lowering the 7% assumption for the pension plans’ return on investment to something lower.
During the meeting, there was a discussion of the challenge in future years of averaging a 7% annual investment return given the pension plans’ current near-term outlook and the market assumptions. A suggestion was made for a study of alternative asset allocation options. The study suggested a more aggressive allocation of the addition of less liquid alternatives will likely be necessary to achieve the desired investment returns.
A second alternative is a reduction of the 7% investment return assumption. Councilman Mark Paddack recommended not reducing the 7% return on investment assumption.
Democrats want to take away everyone s retirement fund and redistribute it to dead beats
Every damn time the Dispatch attempts to discuss city workers retirement or pensions its a hard read and fans the flames. Now wait a minute. Are we talking about investments like a 401k plan? OR that so archaic way of doing retirements by funding all (at whatever % based on years of service and age) guaranteeing employees a lifetime retirement pension?
No really. 401k plans are nice, being tax deferred with a late 50s age ability to pull without penalty, able to reinvest maybe into an ira to further lower the eventual tax burden…..but its on the backs of the employees contribution and rate of return of stocks invested. AND playing with stocks is a risk. Most govt entities long ago exited that prior guaranteed retirement bundle in favor of 401k like plans. Why? They couldnt afford the long term retirement payouts.
Now if this is a once again City Fail discussion to lower a matching contribution, what the hell were u all thinking back in the day of a high matching rate. If there is a bundle in a kitty being invested to pay out retirees, geez someone wake the eff up and change it, grandfather remaining by either letting them stay or go to an offset type into 401k. Newbies (ha, thats so funny since no one retires) would then have a 401k with a possible small % traditional pension with min age requirement attached to it and a percentage based on years of of service. Ex: someone works 35 years and retires at 60. Whatever they make a year at the end, they would get 35% of that total. 100k at the end, gives you a $35k pension. After TAXES that would roughly be $26k a year, plus 401k plus social security when eligible.
Better yet, use the fed govt retirement setup or many state retirement setups.
Aint that difficult.
Just what do OC “officials” have to do other than enhance THEIR retirement packages or build (yet ANOTHER) Firehouse? The answer is in the condition of their once forever residence. More may be moving out than in lately. Just drive through the Harbor Island area. It’s no longer a former Walton family destination.