A lot of work, that’s what.
The brain trust that helps run the day-to-day on the city’s pension – including director Michael Cherry, attorney Bud Gilbert and actuary Alan Pennington – will get together and draft what the new plan will look like.
And though it goes online at the start of the year for new hires, there’s a little leeway in figuring out all of the details.
“It’s really just getting everything set up administratively to make sure that all of our records reflect the new folks differently,” Cherry said today.
They’re not building the pension from the ground up, he said, but rather will take the framework they already have and adjust it to reflect the changes that voters approved, such as the longer vesting period, higher retirement ages, more risk on the backs of city employees and so on. From there it’s a matter of taking the contributions – once they begin to trickle in – and plugging them into an investment fund.
And even that won’t be its own fund initially.
“We’re probably going to invest it with the rest of the fund until it gets big enough that you can have enough money to buy appropriate investments,” Cherry said.
The current city pension fund is worth about $443 million, and is more than $200 million short of where it needs to be. The information about the pensioners is stored in a database, Cherry said, which will act as a kind of template for the new fund.
“There isn’t anything that’s just brand new that we’ve got to sit down and think about how we’re going to do it,” Cherry said. “Sure, we’ll have to make some modifications. It’s not like we’re literally starting from scratch on all this.”
But it will be a different plan, he said.
And any of the investment decisions, once the plan gets rolling, would go before the pension board, Cherry said.
“We’re going to try to have a plan in front of the board in December,” Cherry said.