Ex-commissioner warns of county pension failure

Tue, 12/04/2007 - 4:52pm
By: John Thompson

Former County Commissioner Rick Price hopes the current County Commission doesn’t move too quickly on deciding on a defined benefits retirement package.

Price took his concerns to the County Commission on Thursday and urged them to think carefully before making such a huge change.

“This could create a financial catastrophe,” Price said.

He alluded to the fact that the state’s defined benefits package is in financial straits, and also said Henry County, which just started its defined plan four years ago, is already underfunded.

“There should be public hearings before this is voted on,” he said.

For the last three months, the county has wrestled whether to convert its retirement plan to a defined benefits package.

Consultant Steve Vaughn has appeared at two workshop meetings and tried to assist the county in making its decision.

“This is part of having a competitive benefit to help aid recruitment and provide a livable retirement,” Vaughn said in November.

He added the county’s current retirement plan, which is based on contributing to a 401K and 457 plan, does not meet the goal of providing a quality of life upon retirement.

If the county decides to go to a defined benefits proposal that would provide retirees with a guaranteed income of 90 percent or 100 percent of their current income, employees would be mandated to contribute to the plan.

The county’s portion of the retirement income would amount to 50 or 60 percent, while Social Security would provide 40 percent and the individual’s saving would cover the remaining 15 percent.

The county is currently paying just over 6 percent in matching funds towards an employee’s retirement plan, and Vaughn said a defined benefits would not cost the county any additional funding.

But some of the commissioners were not convinced.

The commissioners are set to further discuss the issue today at 3:30 p.m. in the conference room at the Fayette County Administrative Complex in Fayetteville.

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