6 ex-chairmen: County pension plan bad for taxpayers

Tue, 08/07/2007 - 4:48pm
By: John Munford

A group of former county commission chairmen have banded together to speak up against the possibility of the current county commission adopting a defined benefit pension plan.

The chairmen, in a letter to the editor on Page A4, said the plan is a bad idea that would cost taxpayers “millions of dollars” and questions how the plan would be funded.

The letter is signed by former commission chairmen Greg Dunn, Harold Bost, Rick Price, Steve Wallace, George Patton and Jerry Barronton. Most recently, these men co-authored a letter critical of the current commission parting ways with long-time County Attorney Bill McNally.

Payments under defined benefit plans usually are funded completely by the employer and the amount usually is linked to a percentage of the employee’s salary with other factors taken into account such as years of service, wages and/or age.

Dunn, in a phone interview Monday afternoon, said previous commissions have improved benefits for county employees over the years, but a defined benefit pension plan is far too expensive for a county the size of Fayette.

Dunn said the chairmen have resolved they would never agree to the county adopting any type of defined benefit pension program.

“It’ll put too much of a burden on the taxpayers,” Dunn said. “We will always oppose it.”

Dunn questions whether the taxpayers’ needs are being taken to heart since the committee that was set up to study the possibility of using a defined pension consists almost entirely of county employees who could take advantage of it immediately because of their long-standing employment with the county.

The committee includes attorney John Kimball along with Water Director Tony Parrott, Personnel Director Connie Boehnke, Sheriff Randall Johnson and Finance Director Mary Holland.

Dunn said when he was on the commission he got considerable pressure to adopt a defined benefit pension for employees.

Dunn said the county has built up a $40 million fund of cash that’s used to pay for capital projects instead of financing them, such as the nearly completed senior citizens center. The money is also available for use in case of emergencies, and although the damage was limited, Dunn noted that the county has been hit by two tornadoes in the past several years.

Dunn said said he’d hate to see that money used for a defined pension program, as the federal government would require the county to set aside funds to cover the pension benefits.

Dunn also said he didn’t see how the commission could adopt such a plan for county employees when Delta employees and others in the community have lost their defined benefit pension plans.

Dunn, along with the other chairmen, also question the involvement of former county commissioner Scott Burrell, who is also on the committee although he is president of Pacific General Financial in Fayetteville, an insurance and financial services firm.

Burrell told The Citizen recently that he is not looking to gain personally by participating on the committee.

“I don’t even do government pensions,” Burrell said. “I just want to make sure the county’s employees have the best benefits possible.”

Dunn pointed out that the county currently gives all employees a retirement contribution to a 401(k) plan equivalent to 4 percent of their salary, and by taking advantage of another tax deferment retirement plan by their own election, employees can save up to 16 percent of their annual salary for retirement purposes.

“It’s not a defined benefit plan, but it’s pretty generous,” Dunn said.

As to Burrell’s claim that the county is losing money due to employee turnover, Dunn said he looked at the turnover rates every year, and Fayette’s figures were similar to those of other jurisdictions. In fact, because many of Fayette’s employees have served so long, it creates a logjam that prevents other employees from advancing as quickly as they’d like. That need for career advancement is one of the many reasons an employee decides to leave Fayette, Dunn said.

Dunn said the chairmen’s stance on a possible defined benefit pension is not a rally against county employees, many of whom he said are “great.” Nor is it about sour grapes from being voted out of office, Dunn added.

“You’re going to hear from us only if we think it’s something outrageous,” Dunn said. “... We’re all concerned. We hope people will listen.”

In this case, the county commission is on the threshold of making a major mistake that will cost taxpayers dearly, Dunn said, noting that other governments have had major trouble due to their defined benefit pension plans. Some other governments, including the city of Atlanta, have had to use bond financing just to meet their pension payment obligations, Dunn added.

The chairmen, who have been meeting with each other, will speak up when necessary although they don’t plan to take issue with matters where they simply don’t agree with the decision of the current commission, Dunn added.

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Submitted by CRAZY on Sun, 08/19/2007 - 8:30pm.

Fayette County Residence should not have a problem paying for the county employees to have some of the very same benifits they demand in there employment, county employees might have a little more pride in thier work or sympathy for those taxpayers with 500,000+ mortgages if they could afford to live in fayette county themselves.

Cyclist's picture
Submitted by Cyclist on Sun, 08/19/2007 - 8:36pm.

I don't know what rock you have been under but a lot of us lost these benefits and we had no say in the matter. A $500,000 mortgage? Not

Twenty six miles across the sea......

Submitted by too bad on Sun, 08/19/2007 - 9:21pm.

Most people who live here are Delta employees, they got the rug pulled out from under them...Greg Dunn knows that, the Dream team walked off with what Ron Allen didn't screw them out of. Greg Dunn has done a lot for the county.....

fayettesnob's picture
Submitted by fayettesnob on Fri, 08/10/2007 - 1:46pm.

It would be nice if Dunn had his facts straight. The county is losing good people to surrounding counties and cities directly due to the lack of a pension plan (at a much higher rate than others). From what I understand, one large public safety entity in the county has half of its work force with less than 5 years of experience due to turnover! That's downright DANGEROUS!

Also, isn't this the same man collecting a government pension from his Army retirement? If it's so wasteful of taxpayer money, he should put his wallet where his mouth is and stop collecting today.

Submitted by Vernon on Mon, 08/13/2007 - 2:02pm.

That is a very good point, hope Dunn reads it.

Submitted by Vernon on Wed, 08/08/2007 - 3:36pm.

Didn't Dunn cost the county a little chunk of change in his personal vendetta against Sheriff Johnson? Dunn has screwed over the employees and citizens of the county for too long, that's why he (along with others) were voted out. My advice to Dunn is to get over it, you are not in power any more. These FORMER officials need to move out of the way and allow the county to move forward. The county keeps losing people with senority and lots of experience in their jobs. I would rather have employees that had experience and could keep my water running, keep the roads in good driving condition, fix the broken county vehicles & equipment correctly & in a timely matter, provide protection without harrassment due to a "rookie cop attitude", provide medical care that would make me feel better or save my life, put out a fire at my home if it was burning. Inexperienced employees can cost the county more due to mistakes and can harm the citizens due to lack of experience. Dunn, please shut-up!

mapleleaf's picture
Submitted by mapleleaf on Wed, 08/08/2007 - 8:13am.

Allow me to shed a little light on this defined benefit pension plan idea for county employees.

Defined benefit plans provide pensions in a definite amount each month for the remaining lifetime of the beneficiary. The pension amount is often arrived at through a formula which takes into account the pensioner’s salary and length of service. The salary can be the final annual salary, the average of the final five years’ salary, the average of all years’ salary, or some other formula.

Because these pensions are paid for years and years after the services were rendered, there is a timing mismatch between the work that earns them and the time of receipt. From the perspective of somebody who pays the pension, you’re paying and not getting anything in return.

To prevent abuses where folks promise pensions whose cost is to be cast upon future generations, we now have laws (federal and state) requiring that an actuary determine the value of the pension benefits as they are earned so that amount may be charged against current revenues and set aside in a trust fund for later disbursements.

All of that is quite complicated and causes quite a bit of expense. It is also subject to abuse as some people invent gimmicks to boost pensions of people about to retire, like by boosting the worker’s pay in his final years so the average pay figure used to calculate his pension will be higher. Sometimes that’s done by allowing compensated overtime. That can distort the actuary’s and accountant’s figures quite a bit.

The pension fund also needs to be invested. That leads to more expense and complaints about how well the money is invested.

With inflation, pensions that seem adequate at the beginning can end up looking paltry. That creates political pressure for catch-up giveaways, at taxpayer expense.

There are a lot of good reasons for not liking defined benefit pension plans. It’s hard to understand why anybody would push for one.

Submitted by lawaboveall on Wed, 08/08/2007 - 8:37am.


Thanks for your analysis. Instead of lambasting the people delivering the message, it is certainly more helpful to analyze the information.
Just because the information is delivered by people that you did not vote for, does not mean that it is wrong.

This plan will be an unreasonable burden on the taxpayers of this county. The county tax base, as good as it is, cannot support this type of long term financial committment. This board has already given the taxpayers a tax increase after only 8 months in office. Following through on this plan would virtually guarantee additional tax increases in the future to fund the plan. Then these very same people who are railing against these six former chairmen will be the same people complaining about the unreasonable tax burden place on them.

By the way, at least two of the people on the committee were told to participate. They both have said, if it were not for Jack Krakeel pushing it and Eric Maxwell trying to make good on his pre-election back room deal with Krakeel, this issue would not even come up for serious consideration.

Let's just drop it now, and save all the ranting and raving that will come when the taxes go up to support it.

mapleleaf's picture
Submitted by mapleleaf on Wed, 08/08/2007 - 4:43pm.

There are additional reasons worth mentioning for shying away from maintaining a defined benefit pension plan for county employees.

One big reason is lack of portability. Very few people now spend their entire career with one employer. The reasons are many and don’t really matter. The reality of the situation is that few employees end up collecting meaningful amounts from defined benefit pension plans. The long-tenured employees that do can often be people that the employer wishes had moved on. An employee who hangs on just because of his pension plan may end up resentful of being tied to an employer or a job he no longer likes and his performance will reflect it.

The other big reason is a lack of appreciation of the plan’s cost and value. Employees simply don’t realize the value of what they’re getting, and the employer quite often fails to appreciate the real cost.

Let me give you two examples. Look at Social Security recipients. When he turned 65, an acquaintance of mine had the value of his Social Security retirement income determined by an actuary. Ordinary fellow, with good income but not the very top under Social Security. The value of his benefits: $405,603. That’s not counting the value of his and his wife’s Medicare benefits. How many people do you think appreciate the value of their Social Security benefits?

My other example involves teachers. The generosity of their defined benefit pension plan comes from their ability to retire after 25 years of service (under section 47-3-101(a) of the Georgia Code). Quite often there are complaints that teachers are underpaid. When these complaints are made, people look only at current salaries and no one ever mentions pensions.

Employees, especially the younger ones, simply don’t appreciate pension benefits. They have a “show me the money and tell me it’s mine” attitude. Defined contribution plans allow an employer to show employees the money that’s theirs, but defined benefit pension plans simply don’t. Thus defined benefit pension plans are not effective in motivating employees.

So why would a rational employer start one?

Submitted by dollaradayandfound on Wed, 08/08/2007 - 6:20pm.

The military works the same way. 37 years old, 20 years in the military, you get half of what you were making at retirement, or much more at 47! Then start triple dipping! You ca even do it in the reserves or guards...takes longer.
What kind of leaders does that produce? Some but few.

Submitted by tonto707 on Tue, 08/07/2007 - 8:35pm.

that every one of these 6 chairmen at one time or another tried to jerk Randall around or bully some other constitutional officer and learned that didn't work.

As I recall, former probate judge White told George Patton where to put a certain letter. And I believe the tax commissioner did the
same for Rick Price.

And didn't Dunn lose several lawsuits against Randall Johnson and others?

Yep, time for these dudes to shut up and move on.

Submitted by IMNSHO on Tue, 08/07/2007 - 7:22pm.

The voters don't want to hear from Dunn or any of the rest of them. The voters did not like what they were doing as County Commissioners, so what makes them think we want to hear from them now? All they want to do is criticize, and frankly, I'm ready for them to shut up.

Git Real's picture
Submitted by Git Real on Tue, 08/07/2007 - 9:01pm.

Thanks dear lady for your accurate assessment.


"That man was Griffin Judicial Circuit District Attorney Scott Ballard".


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