Grand Island uncovers significant pension problem

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Story Created: Dec 12, 2012 at 7:31 PM CDT

Story Updated: Dec 12, 2012 at 7:46 PM CDT

It seems like Grand Island is facing one problem after another. The latest issue involves thousands of dollars. City Councilman Chuck Haase discovered the city has been over paying retired police officers.

So far, nobody's taking the blame for the error.

In 2005, the city suddenly started paying officer retirement funds based on joint fund annuity.

They were formerly paid based on straight line annuity. Joint fund takes the life expectancy of the spouse into account.

Straight line is based on just the employee's life expectancy. .
It's unclear why the change was made.

"The city can go ahead and pay beyond that if they choose, so I was determined to try to find some documentation to place where it was approved by council or there was minutes of the pension committee meetings and again I could not find any documentation of where that change or if that change had come to council," said City Finance Director Jaye Monter.

City Council has to approve any changes like this.

Council member Haase said he thinks it's unbelievable that it has taken years for someone to notice the mistake. He noticed a claim in early November to Sargeant Kerry Cole seemed too large.

The difference between the joint fund and straight line annuity is $380,000.

Fire department employees are paid under a joint annuity fund though. So, some people say it's only fair that police officers are paid the same way.

The issue is that the change was done without approval. And so far, nobody knows how the change even came about.

The next step is council members will have to decide three things at city council meeting on December 18th.

One, they have to decide if Sergeant Cole will have to pay back that recent payment. Next, If the city will pay officers under the straight line annuity or joint fund annuity. And also where this funding will come from.

The Fire reserve has excess funds that could go towards the police reserve.

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