by Matt Marquardt –
MASON CITY – A retirement plan for policemen and firefighters will cost Mason City over $1.3 million in 2013, according to the city’s 2013 budget.
The city must contribute 26.12% of annual payroll of active employees for the period of July 1, 2012 through June 30, 2013. That is up from 24.76% from the same period a year earlier. The minimum rate is 17%.
Police and fire employees currently contribute 9.4% of their wages to the plan. In 2010 the contribution rate was adjusted to 9.40% to establish the presumption that cancer and infectious diseases are considered work-related for purposes of disability and death benefits of active members.
The retirement plan Mason City participates in is called the Municipal Fire and Police Retirement System of Iowa, a statewide retirement system for fire fighters and police officer personnel employed in Iowa’s largest cities. The system was created on January 1, 1992 by the Iowa Legislature. It consolidated eighty-seven local retirement systems previously administered in forty-nine cities. The system is a benefit plan, maintained to provide income to employees upon their retirement. The system also provides benefits in the event of an employee’s death or disability, or in the event of a vested employee’s termination of employment prior to normal retirement.
The plan is governed by a nine-member Board of Trustees who are appointed to the Board by police and fire associations and by the Iowa League of Cities. The eight voting members select a private citizen to serve as the ninth voting member. The Board is authorized by the state legislature to make investments, pay benefits, set contributions rates, hire staff and consultants and perform all necessary functions to carry out the provisions of the Code of Iowa. The System is separate and apart from state government and is not included in the state’s financial statements.
According to this report, there are currently 3,908 members statewide in the plan with an average age of 40.7 years. Current benefit amounts are based upon a percentage of the member’s average monthly earnable compensation. The average monthly earnable compensation is calculated by adding the member’s earnable compensation for the highest three years of service and dividing it by 36. The percentage multiplier varies by type of retirement and the length of the member’s service. The benefit percentage for a service retirement is 66% with 22 years of service and 82% with 30 year of service.
