Defined benefits is ‘feasible’, says committee

Tue, 09/11/2007 - 3:47pm
By: John Thompson

Fayette County’s workers could soon be seeing a major change in how their benefits are figured.

During last week’s County Commission workshop meeting, the commissioners heard a report from attorney John Kimball. Kimball is part of a study committee, including former Commissioner Scott Burrell, that is examining whether it would makes sense to switch from the county’s current retirement benefit to a defined benefits package, where each employee would receive a “defined” monthly amount.

“The question was asked if this plan is feasible, and the answer is yes,” Kimball said.

Currently, the county has a 401K system that employees and employers contribute to every pay period. Kimball said a defined benefits package would end up costing the county the same amount of money or even less than it currently contributes to the existing retirement accounts.

One of the issues that would have to be addressed is the credit for past years of service. Kimball suggested county employees could be credited with their years of service by buying into the plan with their current 401k money.

One of the big motivators in the discussion of changing benefit plans is the amount of turnover in the public safety departments.

“In five years, there has been 190 employees leave the Sheriff’s Department,” Kimball said.

Many of the employees are leaving for other counties that have defined benefits, he added. He also said the county is not aiming to replace 100 percent of the employee’s salary, but rather 50 or 60 percent that combined with Social Security would come close to replacing the total salary.

“This would require no additional funding from the county, and there’s $20 million in the 401K money to fully fund the plan,” said Commissioner Eric Maxwell.

Chairman Jack Smith said he wanted more time to look over the specifics, but said he was pleased with the initial assessment.

“It would be their (employee’s) money that would fund past service,” he said.

The County Commission agreed to defer any decisions on the matter until more study could be done on the plan by the commissioners and the public.

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