We fully expect the Governor to sign the bill to increase the defined contribution (DC) amount from $700 to $1,200 into law at some point before the end of the year. For the sake of many fire districts that would like to amend the program at the upcoming commissioner election in December, we hope it is sooner rather than later!
Although we would prefer to have had the contribution amount increased to $2,100, which was the original version of the bill, the $1,200 amount at least increases the contribution by close to 70%, and makes the DC plan a bit more competitive to the benefits that can be provided from the DB plan. But by how much?
Over the next few posts we'll take a look at that. There are many assumptions that go into the calculation, and any changes to those assumptions will create different results.