Who is responsible for the City's pensions when it joins the County?

Specifically: "If the City of St. Louis rejoins St. Louis County, who is responsible for the unfunded liability in the City employees’ pension systems?"


Short Version: The City, if it remains the employer of its police, fire, and City employees.

Long Version by Polsinelli Lawyers:
"So long as the City of St. Louis remains the employer of its police, fire, and City employees, it would remain responsible for all pension costs including any unfunded liability in the City employees’ pension systems.  The act of the City of St. Louis re-entering St. Louis County as a municipality would not automatically change its status as the employer of these employees, nor change its responsibility as employer to those employees.

This would be no different than the situation of other St. Louis County municipalities that have their own retirement systems for certain employees.  St. Louis County is not responsible for any unfunded liability in these plans now, nor will they be in the future.

The City of St. Louis has three employee retirement plans covering substantially all full‑time employees.  The plans are the Employment Retirement System (“ERS”), the Firemen’s Retirement Systems (“FRS”) and the Police Retirement System (“PRS”).  Each has a different source of authority.  The ERS is established pursuant to City Ordinance[1]; the FRS pursuant to State Statute and City Ordinance[2], and the PRS pursuant to State Statute.   If the City were to rejoin St. Louis County, it should be noted that St. Louis County would have no authority to make any legal changes to the existing City of St. Louis plans.

While all of these plans vary as to the source of authority, benefit design, governance and employee contribution requirements, common to all of them is that the City of St. Louis, as employer, is required to make the actuarially required employer contribution.

In the fiscal year ending 2012, the City of St. Louis made total pension contributions totaling $79,070,000 to the three funds, and maintained funding ratios of 75.3% for ERS, 81.1% for FRS, and 77.9% for the PRS."

[1] The ERS system covers all non-uniformed employees of the City and certain other public entities that are funded by, and provide services to, the residents of the City of St. Louis, such as the St. Louis Public Library, the Zoo‑Museum District, and the City Mental Health Board.

[2] In an effort to gain greater control over its pension costs, the City is currently attempting to establish by Ordinance a new Firemen’s Retirement Plan to replace the FRS.  However, this effort is currently subject to litigation and has not yet been implemented.

    commented on pension_responsibility 2016-02-11 13:11:12 -0600
    It seems that many people erroneously believe that if the city reenters the county, the county will be “dragged down” by the city’s debts. I have seen people make these type of comments on social media as a reason to oppose any reunification. Great that you are addressing this and bringing some reality to the discussion!