KIMBALL, Tenn. - The Kimball Board of Mayor and Aldermen decided last month to examine further the Tennessee Consolidated Retirement System's recommended municipal contribution of 4.45 percent for the next fiscal year.
Mayor Rex Pesnell proposed in April a 5.5 percent rate to keep Kimball one percent above the TCRS recommendation, but some board members argued that the rate should remain at 6 percent.
Pesnell said he just thought it made sense to keep the town's contribution at one percent above the TCRS rate.
At the board's May meeting, Pesnell said he was "OK, either way."
"I have no problem if [the board] decides to go with 6 [percent]," he said.
Kimball is in "good standing" with the TCRS, officials said, and has traditionally contributed more to employees' retirement pool than the amount required.
The town's contribution goes into a pool of money from which retired employees draw.
It does not go into individual employees' retirement accounts, but that's what most board members thought before they investigated more about how the system works.
After hearing the explanation of how TCRS operates, Vice Mayor Jerry Don Case said there's no reason for Kimball to maintain its current rate of 6 percent.
"If we put more in, we're actually putting more into a pool, not into the employees' pockets," Alderman Mark Payne said. "If it was direct benefit to our employees, I'd be 100 percent [for keeping the current rate]."
Case made the motion to lower the town's contribution to 5.5 percent, which maintains a one percent contribution above the TCRS recommended rate, and the board approved the motion in a unanimous vote.
Officials said the retirement pool is just for Kimball employees, and the amount those former employees may draw is determined by their highest five years of pay.
If the pool of money is robust, like Kimball's, the required TCRS rate remains lower each year.
"It's a gamble either way," City Recorder Tonia May said. "You have to make sure the [stock] market does well with the investments that they do, and [TCRS] takes a small percentage for administering it."
The town only has two retirees drawing from the pool right now.
"I think it does show how strong [our retirement system] is and how strong it has been," Alderman John Matthews said.
Ryan Lewis is based in Marion County. Contact him at ryanlewis34@gmail.com.