×

County to provide increased funding to Blair Pension fund

Policy to annually increase contribution

HOLLIDAYSBURG — Blair County’s current and future commissioners will be expected to annually increase contributions to the county’s underfunded pension fund, based on a policy approved Wednesday.

The retirement board, in a 3-1 vote, approved the policy indicating the county will annually increase its pension contribution by 5 percent or by $250,000, whichever is less.

Since commissioners designated a $4.75 million contribution to the pension fund in 2021, the new policy means 2022’s contribution will have to be $237,500 higher to meet the 5% percent threshold, for a total contribution of $4.987 million.

In 2023 and beyond, the policy indicates the county will keep increasing the annual contribution by $250,000.

For the practice to stop, the county’s total annual contribution to the pension fund will have to meet or exceed a calculation that generally comes in around $7 million.

Commissioner Bruce Erb, who chairs the retirement board and recommended the policy’s adoption, said it provides a way “to see the goalpost down the field as we work our way down to it.”

At last month’s retirement board meeting, a pension plan study identified the plan’s liabilities at $92.24 million, about $1.3 million more than the $90.74 million calculation based on projected retirement dates, life expectancy rates and investment returns.

“We are millions and millions, tens of millions underfunded on this plan,” Erb said in support of the policy. “We have to make this sort of commitment. This is money the county owes, legally and morally. We have little if any choice to do this.”

Commissioner Amy Webster, who sits on the retirement board and voted against the policy, said she questions how the county can commit to specific increases. She referenced the economic volatility generated by the coronavirus pandemic and new federal leadership.

“It’s not like you can ever tell the future, but I don’t think we’re in a comfortable position right now when there’s (no) lack of volatility,” she said.

Webster also spoke of budgeting concerns and asked: “Where is this money going to come from?”

Controller A.C. Stickel and Treasurer James Carothers, who also sit on the retirement board, acknowledged Webster’s concerns as valid but voted in favor of the policy.

“We’ve already made this commitment,” Stickel said. “The county commissioners, the salary board, the retirement board, over many decades they made a commitment to every retiree and every employee that their retirement would be there.”

Carothers pointed out that while the retirement board is adopting the policy, it’s the commissioners who decide, during the budgeting process, on an annual contribution to the pension plan.

When Carothers asked if the policy’s language should be worded so the retirement board recommends the increases to the commissioners, Erb said the policy is to be a reflection of the retirement board on behalf of the county.

So if the commissioners fail to follow through, Erb said, then the policy can be referenced and the commissioners can be accused of “rejecting sound financial advice.”

Erb also said the policy should also help the county secure more favorable interest rates on future borrowing. When borrowing through bond issues in prior years, the county was criticized for its pension fund liabilities, Erb said.

Stickel said he also sees the policy as beneficial over time. If the retirement fund, which now has about $33 million invested, reaches a point where it lacks enough money to cover monthly retirement checks and related expenses, then that obligation falls to the county’s general fund to cover.

“In all likelihood, (that would) virtually bankrupt the county and the taxpayers,” Stickel said.

“There’s nothing to bail us out,” Erb said. “And no one is going to bail us out.”

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

NEWSLETTER

Today's breaking news and more in your inbox

I'm interested in (please check all that apply)
   

Starting at $4.39/week.

Subscribe Today