Genoa Village Council has set a 10 percent cap this week on pick-up contributions for the police pension plan.
Monday’s approval of the cap proposal came days before the rate set by the Ohio Police and Fire Pension Fund in Columbus is set to jump to 10.75 percent, Fiscal Officer Chuck Brinkman said. The rate hike is one of three expected over the coming years. The rate increases to 11.5 percent in 2014 and then to 12.25 percent in 2015.
The cap means the village will only put in contributions up to the 10 percent limit. The employee will be responsible for the remainder.
At the current 10 percent rate, the village contributes roughly $25,000 to $29,000 to the pension fund annually, Brinkman said.
The cap falls in line with a 10 percent cap in place for other village employees who are under the Public Employees Retirement System, Village Administrator Kevin Gladden said.
The pending increases have been part of the conversation between the Genoa administration and the police department for a number of months, Genoa Police Chief Bob Bratton said.
“The police officers understand the situation and agreed we will pay when it goes beyond that 10 percent,” Bratton said.
Under contract guidelines, the village pays the full 10 percent contribution for any employee that has worked there for two years. Part-time officers are not eligible.
“Right now I think the only one it affects is the police chief. He is paying the full amount,” Brinkman said.
However, Bratton will celebrate his two-year anniversary on the force in September.
The Ohio Legislature created the Ohio Police and Fire Pension Fund in 1967, replacing 454 various police and fire relief and pension funds, according to the pension fund website.
Ten percent of plan participants' earnings are invested in the plan. The participants' employers contribute the appropriate percent of payroll necessary to fund current service costs. This is in addition to the more than $20 million annual contributions for past service liability (accrued prior to 1967) made by employers.
Money deducted from participants' salaries is placed in their own separate accounts much like a savings bank. Each month as the employers' reports of employee contributions arrive, participants' contributions are posted to their respective accounts.