Alton Police Pension Fund sues city for under-funding account

Kelly Holleran Sep. 22, 2008, 11:40am

Trustees of the Alton Police Pension Fund have filed suit against the city, the mayor and the City Council, alleging they have consistently under-funded the account.

The municipality is responsible for taxing properties, according to the complaint filed Sept. 18 in Madison County.

But the trustees of the APPF claim Donald E. Sandidge, the city's mayor, and the City Council have not collected enough taxes to be able to adequately pay into the fund.

"As a result of the City of Alton's past failure to fund and as a result of this City Council and prior City Council's failure to properly levy taxes in accordance with statutes, APPF is now significantly underfunded," the suit states.

The amount the City Council is supposed to pay into the fund is different every year and is determined by an actuary, who is hired to predict the costs of anticipated benefits and to decrease the unfunded actuarial liability, according to the complaint.

The sum of the anticipated benefits plus the sum of the unfunded liability is equal to the amount that needs to be raised by a tax levy, the suit states.

Because Alton failed to issue a tax rate that was sufficient to fund the requirements, it failed to transfer money into the APPF, the trustees state.

"This does not involve a hypothetical question or a theoretical proposition, but rather a serious, ongoing dispute that has resulted in severe underfunding of the APPF, jeopardizing the constitutionally guaranteed right of APPF participants and beneficiaries and their widows and minor children to receive pension and other benefits in the future from the APPF, in accordance with applicable laws," the suit states.

In the three-count, the six trustees are seeking a judgment in excess of $50,000, plus prejudgment interest.

If they are not granted the pre-judgment interest, they seek the difference between the amounts required to be paid into the fund minus versus the city's actual contributions.

The trustees also seek an order that requires the city to levy taxes on municipal property or to make transfers of funds to the APPR each year in accordance with the actuarial estimates.

Steve Selby of Alton will be representing them.

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