Blair pension liability at $92M

County urged to increase general fund dollars for retirement plan

HOLLIDAYSBURG -- A study of Blair County's pension plan has identified liabilities of $92.24 million based on a closer examination of contributing factors.

The calculation came in $1.26 million higher than a previous amount based on estimated retirement dates, life expectancy rates, investment income and related factors.

"It's not what we wanted to see, but maybe it's what we needed to see," retirement board Chairman Bruce Erb said Wednesday in a review of the study.

Based on the results, Erb is recommending the county adopt a policy of increasing the general fund dollars set aside annually to fund the pension plan.

A few years ago, county leaders initiated the practice of increasing general fund dollars in support of the underfunded pension plan. Since 2016 when the general fund provided $1 million toward the general fund, the allocation has increased annually and is expected to reach $4.75 million in 2021.

During that five-year time frame, real estate taxes increased by almost 40% with the pension contributions named a major reason.

CBIZ Retirement Plan Services actuary David Reid, who reviewed the study results with the retirement board, said the study was based on five years of data specific to county employees and its retirees.

From that data, the company learned that Blair County has few retirees electing spousal benefits, a factor affecting pension liability calculations.

The study also found that county retirements are occurring at earlier ages than previously assumed, leading to more pension payments.

Another finding was that the county has lower amounts of people who end their plan participation because of job changes or other reasons.

Reid said he had no information on when Blair County last commissioned this kind of study. Retirement board members had no recollection of one being done.

"What we're trying to do here is give our best guess of what this (pension) plan is going to cost," Reid said.

Meanwhile, a review of the pension plan's 2020 performance showed a $3.1 million gain in assets to about $35 million, based on an investment return of almost 12%.

After a downturn in early 2020, the plan made a huge comeback in the third quarter and experienced strong growth in the fourth quarter, investment adviser Pat Wing of Marquette Associates told the retirement board members.

In 2021, Wing told the board that consumer spending will be an influential factor in investment performance. He's also recommending that the county consider allocating a minimum of $1 million in pension fund assets to private debt typically offered by non-bank institutions that have made loans to private companies.

Erb said that he and Wing reviewed other possible investment alternatives and settled on private debt. It's clear that fixed-income investments returns are going to remain at less than 1%, Erb said.

Based on the recommendation, Wing was directed to prepare an amendment for the county retirement board that would allow private debt to be added as an investment option. A vote will likely be taken during the retirement board's March 3 meeting.

Mirror Staff Writer Kay Stephens is at 814-946-7456.