FAYETTEVILLE, Ark. --
The slumping economy is taking a hit on retirement plans everywhere, including pension funds for many local retired firefighters and police officers.
The Fayetteville Police and Firefighter Retirement Board funds are facing very steep declines.
City leaders said the pension fund could dry up within 10 years and that will affect more than 100 retired firefighters and police officers in Fayetteville.
If something isn't done soon, that money is likely to run out.
Firefighters and police officers under the old pension plans will have to make tough decisions this year, as the stock market has taken a bite out of their investments.
With the only source of revenue coming in now being property tax levies and insurance turnbacks, the pension fund's payouts are more that they can afford.
It's something city attorney Kit Williams said he's warned about for years.
"With so much money going out, the earnings from their income, their investments and from the millage is just too much and so they've been losing money every year for several years now, said Williams.
The pension board have two options to keep the money from running out.
One is joining a statewide plan.
"But to do that then the city and the taxpayers would be on the hook for many millions of dollars to make these funds solvent again, said Williams.
The other is making a benefit cut.
The current benefit payout to retirees is at almost 100 percent of their pre-retirement salaries.
And city leaders are suggesting to cut it back by about 10 percent.
"They were only promised 50 percent whenever they retired and they're at a higher level than that, so I would hope that we could step back a bit," said Sondra Smith, city clerk and a member of the Fayetteville Police and Firefighter Retirement Boards.
Several retired police officers and firefighters on the pension plans said they arent in favor of any sort of benefit reduction.
But they said they will wait and see what financial experts will recommend, and if need be, they'll accept a pay cut to keep the pension fund afloat.
The retirement boards will meet later this month to discuss the issue.
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