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Allowable Uses of Police and Fire Pre-1977 “Old System” Pension Funds

By Paige E. Sansone, CPA, Partner, August 09, 2017

Do you have healthy fund balances in your “Old System” Police (1925) and Fire (1937) Pension Funds and wonder if you can use the money for anything else besides paying pension and death benefits to members of the Old System Pensions?  The answer is yes, but there are limitations.  Additional uses of the funds include payments of the following:

  • Health insurance or other health benefits provided to members, survivors, and beneficiaries of the 1925 and 1937 Fund;
  • The City’s employer contributions to the 1977 Fund (usually paid from the General Fund); and
  • The 6% employee contribution to the 1977 Fund paid by the municipality on behalf of the employee (usually paid from the General Fund).

It may be possible to temporarily shift some pension related costs as noted above from the General Fund to the Old System Police and Fire Pension Funds; however, there is a limitation to the amount that may be used to pay for the above listed expenditures.  The maximum amount is equal to the sum of:

  1. The unencumbered balances of the 1925 and/or 1937 pension funds as of December 31, 2008; plus
  2. The amount of property taxes:
    • Imposed for an assessment date before January 16, 2008 for the 1925 and/or 1937 pension funds; and
    • Deposited in those funds after December 31, 2008.

If you have questions or need assistance with analyzing funding options for your budget, please contact us at .(JavaScript must be enabled to view this email address).

Information in this article was believed current as of the date of publication. As you know, changes occur frequently. The information presented is of a general educational nature. Before applying to your specific circumstances, please contact us at


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