Blair County pension fund assets sold
HOLLIDAYSBURG — Blair County sold about $1 million of its pension fund investments to cover monthly pension payments and other pension obligations reported in January.
While the county’s 2020 budget calls for the general fund to provide $4.5 million to the pension plan, the transfer of that money, typically in monthly payments, is on hold pending receipt of 2020 real estate tax revenue.
So to cover expenses in January, the retirement board reviewed and approved a report on Thursday, showing pension fund assets dropping from $33.8 million to $32.8 million, based on Feb. 4 market values.
After real estate tax revenue starts arriving in March, Controller A.C. Stickel said he anticipates making larger transfers from the general fund to the pension fund to make up for the lack of payments in January and probably again in February.
By delaying those transfers, the county saves the expense associated with using more borrowed money provided by its tax anticipation note to cover current expenses, pending receipt of tax revenue. Once the county’s tax revenue arrives, it’s expected to generate enough money so the county can pay back the borrowed money and meet this year’s budgeted contribution of $4.5 million to the pension fund.
In a presentation Thursday before the county’s retirement board, pension fund adviser Patrick Wing of Marquette Associates reported the sale of about
$1 million in invested funds.
He also reported the subsequent rebalancing of the county pension fund assets, so it retains:
— About 41 percent in U.S. equity funds.
— About 27 percent in fixed income funds.
— About 18 percent in non-U.S. equity funds.
— About 10 percent in real estate funds.
— About 3 percent in global infrastructure funds.
— About 1 percent in cash.
As for January’s expenses, Stickel’s monthly report to the retirement board showed $643,342 in pension payments, about $88,000 in refunds and rollovers requested by plan participants and $1,800 in administrative fees.
Wing’s report also identified a 5.2 percent return on investments in the fourth quarter, which contributed to an 18.9 percent return for the year. The year’s return was an improvement, Wing said, over the 4.1 percent drop in net return for 2018. It was better than 2017’s net return of 14.7 percent, the report showed.
The report also offered a 6.8 percent net return for Blair County’s plan from December 2014 through December 2019, just shy of the county’s 7 percent over five years desired rate of return.
Wing also advised the retirement board — made up of commissioners Bruce Erb, Laura Burke and Amy Webster, Stickel and Treasurer James Carothers — that he would keep the county’s targeted rate of return at 7 percent. He also said the investment market is expected to remain “challenging” in the coming years while bonds, typically paying less than 2 percent, show no sign of changing and offering greater returns.
We deal in a market of probabilities, not certainties,” Wing said.
Mirror Staff Writer Kay Stephens is at 946-7456.