Lynn retirees receive first pension boost in 15 years

LYNN – Retired city workers are getting a boost in their cost of living allowance for the first time in years.Lynn Retirement Board Director Gary Brenner said that, under a plan approved by the board and the Lynn Council, the change adjusts the minimum pension amounts for the city’s 1,200 retirees from $12,000 to $14,000. The increase for each retiree ranges from $360 to $420.”Retirees have been getting that for at least the last 15 years. The board figured the $12,000 minimum (pension) was way outdated – the average pension is $16,000 to $18,000,” Brenner said.Brenner said the city can cover the increased allowance cost through adjustments in the annual city appropriation it receives to pay pensions or by extending the state-approved schedule for fully funding Lynn’s municipal pension liability.The city budget includes about $24 million a year to pay pensions. Brenner said pension payments to retirees total about $2.7 million a month, and the payment amount not covered by city tax dollars is covered by income from retirement investments.Local pension investments total $226 million, with about 90 percent of that amount invested in the state retirement system. Brenner and Board Chairman Michael Marks on Tuesday said that amount represents a $3 million gain over the January investment total.The city’s pension investments have increased by $25 million over the past year, but Brenner said the investment portfolio – like portfolios held by retirement boards across the state – are building investments back up from massive losses that began during the 2008 economic downturn.”We are still recovering. Last year was a good year,” Brenner said.State actuary James Lamenzo warned board members in a May letter forwarded to the council that the Retirement Board’s schedule for fully funding the city’s pension liability will probably have to be extended past 2031 to recover losses from the 2008 downturn and the added cost associated with the cost-of-living-allowance.All pension systems tied to the state system are required to fully fund pension liabilities for current retirees and active workers, including 1,200 current municipal employees, who will retire over ensuing decades.Lynn, said Brenner, has a total funding liability of $500 million with about 50 percent of that amount currently funded, with the rest to be built into annual retirement appropriations budgeted over the next 18 years.”It’s all based on projected contributions from members and projected earnings versus expenses paid out. Of course, years like 2008, when investments tank, throw a wrench into it,” Brenner said.In other board news, member Richard Biagiotti was reelected Tuesday to the five-member board, receiving 696 retirees’ votes compared to 230 for city employee Steven Tansey.Thor Jourgensen can be reached at [email protected].