Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, July 17, 1990 TAG: 9007170418
SECTION: VIRGINIA PAGE: B-1 EDITION: EVENING
SOURCE: JOEL TURNER MUNICIPAL WRITER
DATELINE: LENGTH: Medium
City Finance Director Joel Schlanger told the fund's board of trustees recently that the value has reached $112 million, the largest amount in its history.
After the market collapse in October 1987, the fund's market value dropped to $75 million in November 1987. In September of that year before the collapse, the value stood at $87 million.
Schlanger said the rise in the fund's value has helped save money for Roanoke taxpayers because it has meant that a smaller appropriation of tax money is required annually to keep the fund financially sound.
The city contributes about $4 million in tax money to the fund each year, based on a percentage of payroll costs. The contribution was based on 12.6 percent of payroll costs in the past fiscal year, but dropped to 12.1 percent in the current year because of the rise in the value.
The market value is the amount of money the fund would have if all of its stocks and other assets were sold, based on their current values.
Three professional money-management firms handle the fund's investments after consulting with an investment committee that includes Schlanger and several members of the board of trustees.
"The money managers have done very well. We are pleased with them," Schlanger said.
The three firms are Invesco of Atlanta; Wolf, Webb, Campbell and Burke of Philadelphia; and WEDGE of Charlotte, N.C.
"The excellence of their work speaks for itself," said Mayor Noel Taylor, a trustee for the fund.
Roanoke is one of 11 cities and counties in the state with their own pension systems, separate from the Virginia Supplemental Retirement System. Most cities and counties participate in the state pension system.
Schlanger recalled that the fund's market value stood at $26 million when he became finance director in 1977. The investments were handled by a Roanoke bank until 1982 when two professional money-management firms were hired. The fund's value was $32 million when the managers were hired and the assets were split between them.
A third firm was hired several years ago to provide diversity to the investment strategy, Schlanger said.
Despite the steady rise in the fund's value in recent years, Schlanger said the city will probably have to continue making a contribution of tax money to the system because more municipal workers are retiring and salaries are increasing.
"The benefits are increasing every year and there are more demands on the system. Whenever there is a cost-of-living increase in benefits, that adds costs," he said.
Schlanger said city officials are also studying the possibility of providing some assistance to retired workers for hospitalization insurance coverage. Currently, retirees pay the full cost of their coverage.
Several years ago, the city lowered the retirement age for police officers and firefighters to 55. But Schlanger said some officers and firefighters can't afford to retire at 55 because the cost of their hospitalization insurance is so high.
by CNB