Despite a slight increase in investment income and assets, the underfunded liability for the Baltimore City Employees Retirement System continued to grow in 2006, prompting questions from council members during an annual review at City Hall on Wednesday.
“When is the bleeding going to end?” Council Vice President Robert Curran asked.
Council members peppered the board with questions as officials explained that several years of poor investment performance continue to put pressure on pension finances.
“The city contribution to the fund is up significantly this year ? nearly 30 percent ? are we looking at a trend?” asked City Councilwoman Helen Holton, chairwoman of the Taxation and Finance Committee, which oversees city pension funds.
Kenneth Kent, an actuarial advisor for the city, said the growth in the city?s underfunded liability ? $119 million in 2006, up from $63 million in 2005 ? was the result of several years of investment losses, as well as an increase in the number of city employees living longer. Still, officials said, the city?s contributions will continue to rise.
“We are probably going to have to continue to contribute more money,” said Raymond Wackes, city budget director.
Payments to all city pension funds, including firefighters and police, are slated to rise 17 percent to $118 million in fiscal 2008.
The report said ERS? net assets increased $45 million in 2006. The fund also increased payments to retirees by $2.5 million.
ERS Chairwoman Roselyn Spencer said the fund is on solid footing compared to other pension funds.
“Pension funds all over the country are struggling; in the scheme of things we are doing well,” she said.
Despite the shortfalls, Spencer said her investment strategy would remain conservative. “We?re trying to hit singles and doubles ? not home runs,” she said.
