The Financial Oversight and Audit Committee of El Paso convened on July 28, 2025, to address critical issues surrounding the city's retirement fund, revealing significant concerns about the sustainability of benefit payments versus contributions. The meeting highlighted a stark disparity: benefit payments reached $81.4 million, while contributions totaled only $55.9 million, raising alarms about the fund's long-term viability.

Executive Director Robert Asch noted that the gap between these figures is expected to widen as the number of retirees increases, coupled with rising benefit payouts. This trend is typical for mature pension plans, which often experience negative cash flow. Asch emphasized the need for more participants in the plan to help mitigate this issue, suggesting that hiring more employees could bolster contributions. However, he cautioned that even doubling contributions would be a significant challenge to achieve balance.

Currently, employee contributions are set at 8.95%, a rate that has seen only one increase in the past 40 years. Asch pointed out that this stability has allowed the fund to manage its obligations effectively, despite the negative cash flow that does not account for investment returns. The committee acknowledged the volatility of market conditions, which can impact the fund's performance, but noted that the long-term returns have generally met or exceeded the assumed rate of 7.25%.

The meeting also touched on the fund's amortization period, which stands at 16 years, aligning with state recommendations. While there are no immediate plans to increase contributions, the committee expressed a willingness to collaborate with the city should the need arise in the future.

In conclusion, the discussions underscored the importance of proactive measures to ensure the sustainability of El Paso's retirement fund. As the city navigates these financial challenges, the committee's ongoing oversight will be crucial in addressing potential shortfalls and maintaining the health of the retirement system for current and future employees.