One of the defining issues resonating through this year’s County Commission races seems to be the county’s proposed defined benefits program.
In questions submitted by Citizen, there are marked differences in the candidates’ responses. In the Post 1 race, former County Commission Chairman Greg Dunn is vehemently opposed to changing retirement plans.

“Nationally most corporations have abandoned them and more and more governments are abandoning defined benefit plans in favor of the more flexible and affordable defined contribution model. The failure of private corporations and increasing numbers of governments to properly fund their defined benefit plan has bankrupted many private companies and driven the unfunded liability in an ever increasing number of government plans to astronomical figures.

I believe it is a mistake to place the burden of managing retirement accounts on the county (and by extension the taxpayer) by removing responsibility from the employee. I believe that as a matter of principle but in our current economic situation it is unconscionable.”
But current Commissioner Robert Horgan has a different take on the situation.

“The defined benefit plan is expected to save the county taxpayer around $550,000 per year in retirement plan payments, while giving the county employees a guaranteed retirement payment of a maximum of 45 percent of their salary each year during retirement. This plan was specifically designed to result in the County’s payment to the defined benefit plan being no more than the 4 percent the county is currently paying into the defined contribution retirement plan. The County’s part of the proposed DB plan contribution is 3.8 percent of employee compensation per year, which is slightly less than the 4 percent that it is now committed and contributed to the defined contribution retirement plan,” Horgan said.

In the Post 2 race, both candidates seem to be in agreement on the issue. Challenger Bob Fuhrman answered the question from his own personal experience.

“I am against a defined benefit retirement plan for the Fayette County employees. My answer is one that has been learned from experience. My wife and I lost most of our defined benefit retirement plans from Eastern Airlines. She will also experience a major reduction in her future retirement benefits due to a suspension of a defined benefit retirement plan at her current place of employment. I am now facing the possible loss of my defined benefit retirement plan at the former Airborne Express, now ABX Air in Wilmington, Ohio due to the situation with ABX Air, DHL and UPS.

An employee does not own his or her defined benefit retirement plan; it is subject to the courts,” said Fuhrman.

Incumbent Herb Frady said he is also against the plan.

“I was the only candidate to vote against the defined benefit plan that was presented on April 2, 2008. I feel that our current defined contribution plan is much better. Our employees are presently receiving a 4 percent of salary pension plan. In addition they may put 8 percent of salary in the contribution play and receive a match of 4 percent for a total package of 16 percent savings. This savings plan, in my opinion, would not be found in many firms.

The 401-k has more flexibility for our employees. I am also very concerned about possible future liabilities,” said Frady.
In the Post 3 race, challenger Stuart Kouragian also expresses worries about the plan.

“Nearly 80 percent of defined-benefit private company pension plans across the country are underfunded and pension funding problems are also hitting state and municipal governments. This doesn’t make them bad plans it’s just that during these economic times they are much riskier than defined-contribution plans (e.g., 401K). It’s also important to realize that many of the private companies and government entities are heavily unionized and they have a much more lucrative pension plan than the Fayette County plan. But regardless of the payout, defined-benefit plans are a gamble for both sides – employer and employee,” said Kouragian.

Incumbent Peter Pfeifer explained his votes on the issue.

“The motion, made by Eric Maxwell and seconded by Robert Horgan on December 5, 2007 was as follows: ‘To change the county’s retirement from a single defined contribution plan to a hybrid plan that includes a defined benefits plan and a defined contribution plan, and to further authorize the chairman and the county administrator to develop a contract to be voted on by the full board for the new retirement plan, and a committee be formed to review this plan on a quarterly basis to determine the status with said plan becoming effective July 1, 2008, or as soon as possible thereafter. The motion passed 4-1 with Commissioner Pfeifer voting in opposition.”.

Then on April 2, 2008 Mr. Maxwell motioned to hire Mr. Clark Weeks to develop a “legal plan” and to authorize the Interim County Administrator to negotiate the fee for a 1.5% retirement plan. Horgan second. ‘Commissioner Pfeifer stated he had philosophical disagreements with implementing a defined benefits plan, but since it was clear to him a defined benefits plan was coming, he wanted to have the best plan possible. Commissioner Frady also expressed his concerns and said he would not vote in favor of the motion. The motion passed 4-1 with Commissioner Frady voting in opposition.

Since my vote on that motion has been portrayed as my ‘voting for a defined benefit plan’, and Commissioner Frady’s vote is portrayed as “voting against a defined benefit plan”, I have made a decision to never again vote for any motion that has the words defined and benefit in the same sentence! I don’t support defined benefits period.

Challenger Lee Hearn did not respond to the questions. For a full list of the questions and answers, visit thecitizen.com.