City leaders in Midland have reached a final agreement with local firefighters and the Midland Firemen’s Relief and Retirement Fund board to secure the retirement fund for both current and future firefighters. This deal comes after extensive discussions on how to address the fund's unfunded liability, which stood at $120.942 million as of Dec. 31, 2023.
The approved agreement includes several key measures: an increased employee contribution of 5% of annual pensionable payroll, a cash infusion from the City of Midland amounting to $54,442,231 towards the unfunded liability, and a shared adjustment in Actuarially Determined Contribution (ADC) between the city and fund members based on a 2:1 ratio. Mayor Blong notes that the ADC rate prevents pension leaks from occurring again. The fund will also undergo an actuarial valuation each year to determine future requirements.
Justin Graham, Chairman of the Midland Firemen’s Retirement and Relief Fund, provided an update on the pension fund at the Feb. 11 city council meeting.
“I’m here today to report that firefighters have taken the steps needed to honor the mutual resolutions that the pension board and the council made late last year,” Graham said during the meeting. “On Sunday the 9th, the preliminary results of the election by firefighters to reduce the liability by 5% of pay we received, and the firefighters overwhelmingly supported the change to fix their pension.” According to Graham, the preliminary report shows that 88% of 194 votes cast were in support of the fix of the pension.
In addition to the pension changes, Graham shared positive news regarding the fund’s performance. “In more good news, I’d like to report that the board’s quick action after receiving the forensic and governance audits and making the investment changes needed, have placed the pension fund at around a 12% return for 2024, which is well above the 7% that is expected. Also, ranking us 37 against 405 pension plans that compare us to, moving us into the top 10%,” Graham said.
The MFRRF board ratified the pension changes during a MFRRF committee board meeting on Feb. 13. A special city council meeting on Feb. 13 was also held to finalize the funding agreement, in which the council unanimously approved the agreement.
During the special meeting, Mayor Blong highlighted that the final agreement met between all parties is a cause for celebration, but also a day in which "we’re celebrating something [Midland firefighters] gave up.” Mayor Blong also explained the savings taxpayers get from the significant amounts in potential bond debt payments. She, as well as the rest of the city council and city officials, acknowledged the dedication and hard work shown by all parties involved in reaching this resolution.