Life insurance pitched as part of pension solution
Death and taxes.
The two items often cited as being life's only certainties also have been discussed as possible solutions to Jacksonville's pension issues.
A task force charged with making recommendations to help solve the city's rising annual contribution and $1.7 billion in unfunded liability has kept a possible tax increase on the table to chip away at the problem.
Now, a group is pitching another idea: purchasing life insurance policies on groups of people within the police and fire pension plan and using the payouts to pay off benefits and other associated costs.
City Council President Bill Gulliford held a public meeting Thursday with members of the Jacksonville Retirement Reform Task Force to hear an overview of the idea from Sandy Enos of MAF Companies and Grant Markuson of the Markuson Law Group.
Markuson said a managed life insurance portfolio is designed as a low-cost model that has benefits later by using assumptions based on mortality rates instead of the investment market.
Depending on ages, investment into a plan could start low and gradually increase with the eventual gains being used to pay off survivor benefits and the excess used elsewhere toward the plan.
Markuson said that currently six or seven of the country's top life insurance carriers have policy formats that could work.
No municipality has used the option before, both Markuson and Enos told the more than dozen who were in attendance.
Whether the long-term return is more beneficial than a market investment was questioned by many in attendance, several of whom wanted a more detailed analysis of how the plan worked.
Gulliford said he called the meeting to hear about the idea, which "has a place" in the discussion of ways to help the pension situation.
Bill Scheu, task force chairman, attended the presentation.
"It's got to be evaluated," he said. "It's just another proposal before us."