Poore also disputed Fiorentini’s opinion that the retirement board would not hit its projection that it will generate 8 percent returns on its investments over the next 20 years. Poore said the board has experienced a 10.15 percent return on investments over the prior 20 years and 8.3 percent over the last decade.
One of the main reasons the board is advocating for the increased payments to pensioners, Poore said, is that the city recently made changes to retirees’ health insurance that has lead to increased premiums and out-of-pocket expenses for pensioners.
“Four hundred retirees are getting 70 percent increases in their health care next year,” Poore said. “That’s why we brought this forward.”
Information provided by the retirement board shows the median pension for city retirees is $16,600.
Fiorentini said the city pays about $15 million into the retirement system each year and that the subsidy is projected to increase to $32 million by 2033.
“Pensions are a huge cost for us,” the mayor told councilors. “Our liability is going to go up no matter what you do. But if you approve this, it’s going to be even worse.”
There are 1,067 retirees in the Haverhill system and 894 current city workers paying into it. Haverhill is one of only two communities in Massachusetts with more retirees that workers, mainly because of retirees from the former city-owned Hale Hospital that closed in 2001.
Councilor Mayor Ellen Daly O’Brien, a nurse who worked at the hospital, said many of her friends and former colleagues contacted her and asked her to support the pension increase.
“These retirees are mostly women who don’t get social security and rely on their retirement to live,” she said. “I know many of them and I know how hard they worked for the city and how dedicated they were. I want to advocate for them, but it’s a difficult decision based on the figures the mayor has presented.”