The Jacksonville City Council unanimously approved a bill closing the $2 billion Jacksonville (Fla.) City Retirement System and $1.8 billion Jacksonville Fire & Police Pension Fund.
The retirement systems will close Sept. 30 and employees hired on or after Oct. 1 will be automatically enrolled in the city's $24 million 401(a) plan. The city retirement system consists of the general employees' and corrections officers' pension funds.
Approval of the bill Monday marks the end of a process that began with an Aug. 31, 2016, city referendum when voters approved a half-cent tax intended to fully fund the pension funds by 2060. The pension funds currently have liabilities totaling $2.6 billion, according to a news release from Mayor Lenny Curry's office.
The tax will take effect once another half-cent sales tax used for infrastructure projects expires, and the new tax could take effect, according to state law, only if the pension funds were closed to new hires and the employee contribution rate was raised to at least 10%.
“This is historic, setting an example for our city and the country,” Mr. Curry said in the news release. “Pension reform is the biggest milestone for the city of Jacksonville since consolidation nearly 50 years ago. I thank our City Council, elected officials, citizens, business community, union leaders and membership whose support and contributions have helped us solve Jacksonville's pension crisis in a way that is good for taxpayers and the future of our city. Our city's financial future is now in our hands, under our control.”
The current half-cent tax that is folded into Jacksonville's 7% sales tax to pay for specific infrastructure projects is set to expire either Dec. 31, 2030, or when the projects are completed, whichever comes first, said Mike Weinstein, the city's chief financial officer, in an earlier interview. Upon the expiration of that half-cent tax, the new tax will replace it to be used exclusively for funding the pension plans, with the intention of bringing them all up to a 100% funding ratio in 30 years or earlier.