Fire & Police Disability & Retirement Fund

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Breadcrumb: Fund Summaries > City Operations. > Fire & Police Disability & Retirement Fund

City of Portland Fiscal Year 2026-27 Proposed Budget City Operations> Fire & Police Disability & Retirement Fund Fire & Police Disability & Retirement Fund Fund Summary 2024-25 Actuals 2023-24 Actuals 2025-26 Revised Budget 2026-27 Proposed Expense $289,089,187 $254,976,778 $308,769,063 $353,002,332 Bureau Expense $218,866,343 $205,009,802 $241,015,382 $258,672,645 Fund Expense $45,784,891 $33,262,192 $67,753,681 $94,329,687 Contingency $0 $0 $15,970,653 $17,212,801 Debt Service $45,607,769 $33,110,519 $50,727,961 $76,043,573 Fund Transfers - $177,122 $151,673 $1,055,067 $1,073,313 Expense Unappropriated $24,437,953 $16,704,784 $0 $0 Ending Fund Balance $24,437,953 $16,704,784 $0 $0 Revenue $289,088,728 $254,976,336 $308,769,063 $353,002,332 External Revenues $271,873,403 $228,145,437 $282,996,532 $332,015,263 Bond & Note $45,000,000 $32,565,839 $50,000,000 $75,000,000 Proceeds Charges for Services $32 $31 $0 $0 Miscellaneous $2,747,912 $2,101,533 $3,106,800 $3,352,400 Taxes $224,125,459 $193,478,035 $229,889,732 $253,662,863 Internal Revenues $17,215,324 $26,830,899 $25,772,531 $20,987,069 Beginning Fund $16,704,784 $26,311,813 $24,178,490 $19,488,769 Balance Fund Transfers - $0 $0 $750,000 $750,000 Revenue Interagency Revenue $510,540 $519,086 $844,041 $748,300 Fund Overview Chapter 5 of the Portland City Charter establishes the Fire & Police Disability & Retirement (FPDR) Fund for the benefit of the sworn employees of Portland Fire & Rescue and the Portland Police Bureau, their surviving spouses, and their dependent minor children. The purpose of the fund is to finance the pension and disability expenses of the City’s sworn workforce. Direct, pay-as- you-go pension payments are made from the fund to retirees hired before January 1, 2007 (FPDR One and Two members), who are enrolled in the now closed FPDR pension plan. The FPDR Fund also pays contributions to the Oregon Public Employees Retirement System (PERS) to pre-fund the pensions of active employees hired January 1, 2007 and later (FPDR Three members), who are enrolled in the PERS pension plan. Direct, pay-as-you-go disability benefit and medical payments are also made from the fund to all FPDR members with a qualifying illness or injury and at least six months of service. Finally, the administrative costs of governing the FPDR Plan and operating the FPDR Bureau are borne by the fund. The FPDR Fund is supported primarily through a 1052

City of Portland Fiscal Year 2026-27 Proposed Budget dedicated property tax levy originally authorized by Portland voters in 1948. The levy is a rate-based levy, providing a maximum rate of $2.80 per $1,000 of real market value (RMV). Managing Agency Bureau of Fire & Police Disability & Retirement Significant Changes from Prior Year Total fund requirements are increasing by $44.2 million (14%) for FY 2026-27. Net of borrowing for cash flow management, requirements are growing by a more modest $19.2 million (7%). FPDR began making PERS contribution payments on a monthly rather than quarterly basis in the fall of 2025. This change requires a higher cash balance – and hence more borrowing to prevent a negative cash position – between the start of the fiscal year in July and receipt of property tax revenues in November or December. In addition, FPDR Fund expenditures have been increasing exponentially as the fund bears the cost of financing two generations of retirees simultaneously: pay-as-you-go FPDR pension benefits for FPDR One and Two members during retirement, and prefunded contributions to PERS for FPDR Three members during their working lives. Fund expenses are projected to peak in the mid- to late- 2030s. At that point all FPDR Two members will likely be retired and receiving direct pension benefits, while the entire active workforce will probably be comprised of FPDR Three members for whom the fund is making PERS contributions. After that, mortality in the retired FPDR Two population will begin to reduce fund costs. PERS contributions for FPDR Three members (part of internal materials and services in the table above) are the fastest growing component of fund expenditures. PERS contributions are expected to increase $5.6 million (10%) for FY 2026-27. This growth reflects the expanding number of FPDR Three members (who are now approximately 65% of the active workforce) and sworn wage increases. Direct pension benefits paid to FPDR One and Two members (the largest component of external materials and services in the table above) are the fund’s greatest expense. Pension costs are budgeted to increase by 7% for FY 2026-27, to $180.3 million. This growth rate is higher than typical and is primarily due to the abnormally large number of retirements expected in May 2026, the next 27 pay date month. Most retirements occur during 27 pay date months, which produce higher pension calculations. However, even more retirements than usual are expected for May 2026, given the long gaps between the last (November 2024) and next (October 2027) 27 pay date months. In addition, the May timing results in a full year of pension costs for all May retirees in FY 2026-27. As fund expenditures increase so too must the fund’s revenue source, the FPDR property tax levy. The fund will require $250.9 million from the property tax levy in FY 2026-27 compared with $227.3 million in FY 2025-26, an increase of $23.5 million or 10%. 1053

Parent: City Operations. · PDF: pp. 1052-1053 ↗