Fully funded annual pension liability
The City maintains an adequate pension funding level where net pension liability and asset value is 80% or greater. Pension liability is the difference between the total amount due to retirees and the actual amount of money the City has on hand to make those payments. Germantown is fully funded in all its pension liabilities, however, the City will be responsible for increasing fund contributions or adjusting investment strategies if the funding level falls below 80%.
As of July 1, 2017 the City achieved a funding status of 72.69% while reducing the assumed rate of return to 7.5% from 8%. This reduction in the assumed rate of return was to provide for a more realistic rate of return going forward and to ensure the City was contributing a sufficient amount of annual required contribution to reach the 80% benchmark in future years. The investment return for this period was 11.9% which offset the reduced rate of return impact.
ImpactThe City has a high impact on this measure.