The Brooksville City Council voted on January 26 to terminate the city’s Firefighters’ Retirement Trust Fund, opting to pay out 100% of the money owed to its former firefighters rather than closing the fund and continuing to pay toward it over the next several decades.
“The priority is to make them whole and then to also do what’s best for the city moving forward long-term financially,” Mayor Christa Tanner said. “These are hard decisions and the five of us chose to sit on this board to make these hard decisions.” The council’s decision comes months after it voted to consolidate the Brooksville Fire Department with Hernando County Fire Rescue. The termination option means the city will make a one-time payout to the pension board that will fully vest all accrued benefits to those still participating in the fund. It would be up to the pension board to disperse that money through annuities or a lump sum. Council members admitted having to lean heavily on legal counsel to fully understand the complexities of this issue.
The city’s pension attorney, the pension board of trustees’ pension attorney, and the fire trustee’s actuary all attended the meeting either in person or through video chat. One thing the council and legal staff made a point to make clear was that a termination, despite what that word might seem to imply, did not mean firefighters would not receive their funds. The city had previously considered a closure, which would have meant freezing the fund and continuing to contribute 18.77% of payroll each year. However, that option could have left the city paying out for around 60 years at a greater cost over the long run.
When factoring in beneficiaries, the total number of those receiving benefits would rise to over 100. The council’s decision to terminate the fund was made in favor of a lump-sum payout now rather than prolonged payments. The Hernando Sun reported on the issue, providing more information on the potential costs and implications of each option.
Originally reported by Hernando Sun
Sources: Hernando Sun
