Tuesday, March 26, 2013

Pension News

We are glad to see the pension on the front burner again. Ken C, spoke with Robbie Robertson, retiree representative on the pension board. Following Ken's report, is a response by Ed Wall, chairman of the pension board.

Once again, we can count on Ed to respond to our questions.

Comment by Ken C:
I spoke to the retiree pension rep, “Robbie” Robertson about my concerns regarding the county's pension contributions, Robbie patiently explained the situation and answered my questions fully. Robbie lives in Chicago, Ill. and attends most of the board meetings by teleconference. I would rather have him physically at the meetings, however he is just too good at representing the retirees currently to give up. Now lets get to the core issue. 

I'll be blunt. 

The employees and retirees are screwed. 

Specifically DeKalb government has rigged the game against the employees. The bad news first. The pension fund is at 1.1 billion, the highest since the recession. The bad news is the pension is only funded to 60 percent. When I retired three years ago, the pension was funded at about 68 percent. Most of the loss can be attributed to the loss of investment and stock value and the continued outlays to the retirees. While the market has recovered, the outlays drew down the funded pension plan down to 60 percent. The BOC is playing games with the employees over employer/employee pension contributions. The game is rigged and its called “Comparing apples to oranges”, then lying about it.. 

Let me lay down some background information on this so everyone understands the situation perfectly. 

Yearly contributions to the pension fund is determined by actuarial accountants, (financial wizards of analysis) The amount needed to fund the pension for the year is then paid for by the employees/employer contributions. This is where we get to the “apples to oranges” game. 

Employee contributions are fixed at 8.5 percent. The counties only obligation is to make up for the difference between the employees fixed contributions and the amount the actuarial accountants report needed for the year. In this year the 8.5 percent employee contributions required the county to only pay 12.8 percent of the employees salary to meet their legal obligation to the pension fund, not the 17 percent the BOC claimed is breaking the budget. 

 Historically the DeKalb pension plan has been funded on 33 percent of the contributions paid by the employees, 66 percent paid by the county. In June the county reduced their contribution and the ratio changed to approximately 42/58% paid respectively by both. Of course the employees received no notice of the change from the Finance department or BOC. 

The employees fixed rate of 8.5 percent is the “orange”, the county's floating rate is the “apple”. 

Something to recognize is the actuarial accountants are low-balling the total contributions necessary to maintain the pension fund at an adequate level. 

Does anyone believe 60 percent funding of the pension systems obligations as adequate? The BOC is lying to the employees on the county's percentage of contributions to the pension fund. 

 Robbie reports that theoretically the county BOC could elect to pay nothing into the pension system and require the employees to fund it 100 percent. Robbie believes that is unlikely due to the politics. My belief is that if the DeKalb politicians thought they could get away with it they would. A couple of items I was asked to emphasize. Robbie and the pension board is fighting hard to restore the 33/66 percent ratio of contributions to the pension fund, if the county had maintained the agreed fixed 17 percent pension contribution, the pension system could afford a COLA increase for the retirees. 

 My opinion is the DeKalb BOC will only meeting their legal obligation and attempting to raise the employees ratio of contributions while reducing the county's percentage of pension contributions. I see this trend continuing and evolving as DeKalb politicians chip away at employee benefits to gain more revenue for unimportant services and projects that get them reelected 

 Considering that five out of seven of the commissioners are Democrats and claim they stand for the “little-guy”, (blue collar workers) I find their stance towards DeKalb employees breathtakingly hypocritical and arrogant. The CEO/BOC and staffers are highly paid and compensated, they then turn around and screw every other county employee in salary and benefits. Gale Waldorf is the only commissioner I respect. Gale is against us also but at least she is up-front and doesn't lie about it. 

You gotta love this place! 
Stay safe guys and gals! 
KenC

Comment by Ed Wall:

The State of Georgia Constitution does NOT provide for bankruptcy for Georgia cities and counties.
Your Pension Plan is secured by $1.1 billion in the bank and future contributions from the County and the employees.
The County and the employees have always contributed to the plan the amount that the actuaries recommend. At least I can guarantee that for the last 20 years or so I have been on the Board.
If at any time, the County doesn't contribute the recommended amount, the penalty is the State of Georgia will stop paying any grant funds to which the county may be entitled. You and your Pension Board would additionally file a lawsuit to ask a Superior Court Judge to force the levy of a property tax to make the annual contribution.
Your plan has declined in the percentage funded. The latest actuarial report has your fund at 59% funded.
Your Pension Board would like to see it funded at 75% or better.
The reason it isn't at that level is the following:
investment returns over the last 5 years have been on average about 5% annually. The plan is currently designed to earn at least 7.75% annually. The two big reasons are the interment bubble bust in 2002 and the Great Recession bust in 2008.
The second reason is that the plan has more retirees and more employees.
Your Board has currently engaged the Actuary to look at the assumptions to determine if some of them are incorrect. For example, the actuaries assume the payroll increases 3% annually. Based on info we have, employees haven't been receiving 3% annual increase in pay in a long time. The funding status would increase if we determine that the actual liabilities over the next 30 years are less than have been assumed.
The Board of Commissioners are talking about a new 3rd tier plan for new hires that will reduce the multiplier from 2.25% to 1.50%. The savings would be paid into the plan as an extra contribution to increase the funding.
I know there are a lot of rumors out there and for most of you there are few things more important to you than the assurance that your retirement will be there when you need it.
A lot of you have been attending the Pension Board meetings and that is great. Please reach out to me or any of your Board members and those who have been attending the meetings and ask any questions you may have.
Ed Wall
DeKalb Pension Board

8 comments:

Anonymous said...

Folks, we need to quit bitching about what shirt to wear with what patch and make this subject the priority!!

The County/BOC is robbing you of your EARNED retirement. Do not let these thieves get away unscathed. Focus people! The pension fund is the most valuable possession you own and they are bankrupting it.

Anonymous said...

In plain speak you (the employee) will continue to pay more, the county less, and your return remains the same while your take home continues to dwindle. Most agencies pay it all folks and you are vested after 5 years. Move on if you value yourself or family at all.

Anonymous said...

If Robertson is such a great rep, why the hell does someone always have to pry the real scoop out of him and the only time we get the real scoop from anyone of the pension is when we raise hell on this blog. We appreciate FINALLY getting the information but why do we have to beg all of the time. If the pension board knows that the county is cheating us, why didn't we know before? Why does it take so long to get rid of non performing financial advisors and why do we need so many of them? I think we need to hire a lawyer to attend the pension board meetings of our behalf.Also we need to stop fighting each other and identify the real enemy. Our BOC ! Never allow another county rep on the pension board.

Anonymous said...

The arrogance of the Dekalb BOC and the CEO's office over the past 15yrs is clearly showing just how inept they truly are. Everything that's taking place could've been avoided but its the liberal, democrat mindset that has destroyed a once great county....It's amazing at how you take a look at the other counties around us and the ones falling into the abyss are Dekalb, Clayton, Fulton, & now Henry. The others like Gwinnett, Cobb, Cherokee, Forsyth seem to be growing and attracting quality people and businesses.

Can anyone see the picture that is blatantly obvious....those counties are not Liberal. It's not just on the county level...take a look at the cities around us as well. It seems that the new cities of Sandy Springs, Dunwoody, Johns Creek, Milton along with others that are not controlled by the democrats are prospering.

Ummmmmmmmm I really wonder what the hell that's all about. Could it be that these conservative neighborhoods are tired of supporting the liberal agendas...taking from those who take pride in their neighborhoods and giving it to those who want to rob from the neighborhood....

If this truly doesn't wake up the residence of Dekalb County then all that can be said is you made that bed so it's time to lay in it.

Maybe if you would stop electing people based on what they look like instead of who is the most qualified for the job then things could improve for this county. The unfortunate reality is it will never happen. People in this county are to use to what can you give or do for me and mine's instead OF WHAT CAN I DO FOR MY COMMUNITY.

Anonymous said...

THIS is what you get when you elect a bunch of DEMOCRAT THIEVES to take care of your county government, and YOUR fathers, mothers, and children who work for YOU every day in Dekalb trying to protect you. I truly hope that you werent expecting anything other than this from these fools. In my opinion its not just the BOC that doesn't care about us and would prefer we die destitute, its the citizens in DeKalb County that continue to elect these criminals that WANT this future for us! The sad thing is...the poor fools who voted them into office will die just as destitute as we will. By screwing us, they screwed themselves!
I suspected it for years. Now I am too old to work any where else and am physically disabled. Dekalb didnt used to be this way. This isnt what I would call progress.

Anonymous said...

That's why I left and took my $$$..Good luck to those who do the job that needs to be done for DKPD!

best annuity rates said...

Thanks for keeping us update. We need more positive pension news.

Anonymous said...

Amazing how incredibly stupid some of the readers of this blog really are.
Fixed benefit pesions are dinosaurs and can not be sustained. Not just in DeKalb, but everywhere around the Country ( can you say Stockton CA ?)
But then what can you say for a group that believe Ken C is the wizard.