Detroit — Detroit Fire and Police Retirement Systems officials say the pension fund "is on solid ground," despite a report from city consultants that claims the system is under-funded.
Board of Trustees Chairman Matt Gnatek released a statement Thursday taking issue with a report from Seattle-based actuary firm Milliman, which claimed the pension system was only 50 percent funded for the fiscal year that ended June, 30, 2010.
The pension fund's own reports shows it was funded at 102 percent that year and expects to be funded at 96.1 percent for the most recent fiscal year.
The difference is significant because under a new law that goes into effect March 28, the city's incoming emergency manager, Kevyn Orr, could appoint new members to the city's two pension systems if they are funded at less than 80 percent. Milliman estimated the General Retirement System was funded at 32 percent.
"Let me state emphatically that the pension fund is on solid ground and is projected to do very well — by any reliable measure — well into the next decade and beyond," said Gnatek, whose fund provides pensions to 12,000 active employees and retirees.
The board's response comes just days after it received copies of the report, which was previously provided to the city.
The General Retirement System also took issue with the Milliman report and contended its funding level is 83 percent.
"The Board of Trustees is concerned about the accuracy of the report, as it appears to be based upon preliminary reports and projections, not an actuarial report," pension fund chairman Tom Sheehan said in a statement. "The General Retirement System's number one priority is to protect the interest of the fund, its members and beneficiaries."
Milliman's report labeled its conclusions on the financial state of the Fire and Police and General retirement systems as "very rough preliminary guesstimates." A spokesman for Milliman could not be immediately reached Thursday.
Gnatek said Milliman's report was based on "wild assumptions, guesses as well as outdated information and data."
He said the Police and Fire Retirement System's funding level is among the top 10 percent of public systems with $1 billion or more in assets.
Gnatek's remarks were released hours after the board's actuary firm, Gabriel Roeder and Smith Company, presented a preliminary report on funding levels for the fiscal year ending June 30, 2012. The final document is expected to be published within two to four weeks and approved by the board.
Gnatek in the statement says the table Milliman used for its report is based on information that does not impact funding levels.
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