A retirement benefit for Chattanooga police officers and firefighters will become “cost neutral” over the next seven to 10 years, a report shows.
The report, compiled by the Segal Co., a benefits consulting firm, states that half the city’s police officers and firefighters are now under an old pre-2008 plan in which they pay 9 percent of their salary into the city’s deferred retirement option plan, or DROP. The other half pay into an 8 percent plan.
The study, handed over to the City Council last week, shows those under the 9 percent plan are costing more money for the Police and Fire Pension Fund. As those under that plan retire in coming years, the DROP will become cost neutral, the report states.
“The DROP option will become a smaller and smaller component of [retirement] plan cost, and over the next seven to 10 years will become cost ‘neutral,'” wrote Leon “Rocky” Joyner, vice president and actuary for The Segal Co.
But the study didn’t detail exact numbers on the difference between the 9 percent and the 8 percent plans.