Brownstown’s police chief wants his officers to be taken care of when they retire.
That’s why Tom Hanner
recently contacted Stanley Brown, vice president of
McCready and Keene, an actuarial and employee
benefits consulting firm
“We’ve got a good group
of guys here right now that are really dedicated to the job and serving the community, and I would like to see them get something out of it,” Hanner told the Brownstown Town Council during a recent meeting.
Hanner also hopes offering an attractive benefits package would draw talent to the police department.
“Not everyone can do this job,” he said. “Not that we’re better than anybody in any way, but we run into harm’s way fairly often. Out of all the years I’ve been on the road so far, we did it several times this year.”
Brown initially was asked to do an actuarial study to show the cost of adding a defined benefit plan for the police department. But the town council agreed to have it complete a study for all 13 full-time town employees.
Council President John Nolting asked Brown if it was feasible to have a plan for only 13 people. Brown said his company established a plan for a utility department of similar size and it also has done plans for county and state police and municipalities.
The town council voted to have him put together three retirement option scenarios for a cost of no more than $4,000. It will be paid for out of the penalty fund.
“We would put a report together that would show them side-by-side, describe what we did, what we looked at, and give you guys a feel for what you’re looking at going forward,” Brown said.
The scenarios will take into consideration employees’ earnings history, tenure of service and age.
“We would take the census information we have and run what’s called an actuarial valuation, and we would see what it’s going to take on a level, consistent basis from the town’s point of view to fund this thing so everybody has their projected benefits paid for by the time they start drawing,” Brown said. “That’s the million-dollar question that the study would show.”
To help fund the plan, employee contributions are an option. The maximum for that is 6 percent of an employee’s pay, Brown said.
“Most are around 3 (percent) that have them; so that way, everybody who is in this plan sort of has skin in the game, so to speak,” he said.
The town will eventually decide on one plan.
“If you adopt a plan, we do an evaluation report every year that shows the budget number that you need to put in the next year,” Brown said. “The state has some reporting requirements. The governmental accounting standards board has some reporting requirements on some calculations.”
Also necessary are a plan document and a trust arrangement with a bank or an investment group that will manage the money, he added.
“If you put a plan in, you’re going to fund it with town money, but you also want it to earn in excess of a certain benchmark on the interest because, going forward, that interest is going to reduce what you have to put in,” Brown said. “It’s not going to eliminate it unless you have a less-than-generous plan, but it helps reduce what contributions you have to put in.”
Brown said he would begin working on the town’s plan and send an invoice by the end of the month, and he could come to a town council meeting in January to explain the plan and answer any questions.