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effective November 25, 1969, the unpaid City Obligation, as of
January 1, 1969, was to be paid 2 percent in 1969, 2 percent in
1970, 3 percent in 1971, 4 percent in 1972, and 5 percent per
annum beginning in 1973 and each year thereafter for 62 years.
This repayment schedule incorporated the payment of interest at a
rate of 4.25 percent, compounded semiannually. The City made
payments pursuant to the above schedule through 1993.
Under the State Fund pension system, both municipal
corporations and their employees who are police officers and
firefighters contribute a percentage of current wages to the
State Fund. The State Fund pays pensions in defined amounts to
retired police officers, firefighters, and surviving spouses and
dependents. It treats all participating municipal corporations
and their police officers and firefighters equally based on
current contributions. No consideration is given as to whether a
particular municipal corporation paid the principal amount of its
accrued unfunded pension liability in full or agreed to pay such
liability over time. Amounts in the State Fund are invested for
the equal benefit of all police officers and firefighters
throughout the State. The actuary for the State Fund has assumed
a rate of return on investments of the State Fund of 8.25
percent, compounded annually.
Approximately 304 municipalities transferred their assets
and accrued liabilities as of January 1, 1967, to the State Fund.
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Last modified: May 25, 2011