County to vote on defined benefit plan

Thu, 04/02/2009 - 9:45am
By: John Munford

The Fayette County Commission is expected to vote next week to implement a defined benefit pension plan that would provide employees with up to 45 percent of their salary paid monthly upon retirement.

Although the news has been littered with local governments and private companies whose defined benefit plans have become extremely costly and even gone under, county officials contend this plan will save the taxpayers money. A defined benefit pension pays out a certain amount per month to retired employees until their death, unlike other retirement accounts which are restricted to the amount of money in the account upon retirement.

The county is expected to vote on adopting the defined benefit pension plan at its meeting Thursday, April 9 at 7 p.m.

Commission Chairman Jack Smith previously has said the plan reduces the county’s total commitment for retirement by more than $500,000 because the county will be paying 6.3 percent of payroll towards retirement instead of eight percent. There is also language in the plan that if the county’s defined benefits contributions eclipse four percent of payroll, a corresponding reduction will be made in the contributions toward employees’ 401 and 457 retirement accounts, Smith has said.

County employees will be contributing toward the plan along with the county. Employees will not get credit in the plan for previous years of service. That clock would start ticking upon adoption of the plan, which is up for a vote at Thursday night’s county commission meeting.

Public Safety Director Allen McCullough, who served on an employee committee that studied the issue, told the commission Wednesday that Fayette’s plan is not as aggressive as other defined benefits plans offered by other local governments. But the hope is by offering defined benefits the county will be able to retain employees particularly in areas such as public safety, which have recently had relatively high turnover rates, McCullough said.

The committee is recommending that Fayette offer its defined benefit pension through Governmental Employees Benefits Corporation, a subsidiary of the Association County Commissioners of Georgia.

Reasons for going with GEBC include lower asset management fees, and the corporation will handle all actuarial, administrative, fiduciary and legal services so the burden will not be placed on county employees, McCullough noted.

Under Fayette’s proposal, an employee will receive a monthly pension equal to 1.5 percent of their monthly salary multiplied by the number of years worked for the county with a maximum total of 45 percent. There is also no cost of living provision in the pension plan.

According to county officials, other details of the defined benefits plan include:
• Full vesting after five full years of employment with the county ... if the employee doesn’t make it five years they forfeit the rights to any retirement benefit; and retirement eligibility is reached at 65 years old;
• The monthly retirement benefit is equal to 1.5 percent of their salary for each year of county service with a maximum of 30 years;
• The maximum retirement benefit is 45 percent of an employee’s pre-retirement salary;
• The county will only be contributing 3.8 percent of salaries to the defined benefits plan as opposed to 4 percent under the current retirement plan structure;
• If for some reason the county’s contribution to the defined benefits plan increases, the county will reduce by that amount the contributions to the defined contribution plan that will remain; and
• The funds are required to be audited annually.

The county also will continue to offer its traditional 401 and 457 retirement programs as well.

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Submitted by BOLO on Fri, 04/03/2009 - 1:37pm.

Same old argument from the same OLD county employees who are drooling at the opportunity to take the money and RUN. You just wait and see. If this goes through, all the old timers will start retiring the second they vest in 5 years. At that point, it actually becomes a disincentive for the "experienced" employees to stay.

Yup. More greedy government slackers with their hands out.

sniffles5's picture
Submitted by sniffles5 on Thu, 04/02/2009 - 10:47am.

I had a glimmer of hope when I read that headline....when you said "County to vote..." I thought we citizens would have a chance to go to the ballot box to have our voices heard on this pension debacle.

Alas, "County" in this case simply means Herb Frady and his cronies on the county commission.

Talk about getting a guy's hopes up! Sad

cmc865's picture
Submitted by cmc865 on Thu, 04/02/2009 - 9:55am.

This is the right thing to do. Take care of the employees who have dedicated their profession and their lives to the upkeep and safe keep of Fayette County. Stop losing good employees who have gone on to find a city or county that is doing the right thing.

Submitted by BOLO on Fri, 04/03/2009 - 1:52pm.

... a little bit louder and (in this economy) a whole lot worse.

We keep hearing this boogey man that good employees have gone where there are pensions. Okay. Let's play this stupid game. Name names. Who left Fayette County that was so unreplaceable? Whose departure left such a hole that the county is about to fall apart if we don't get a pension plan this minute? With all the layoffs and furloughs (even in public safety), who cannot be replaced?

Or, cmc (and, by the way, would that be Chief McCullough?), is it just that you don't want to have to work like the rest of the taxpayers in this county?

Submitted by AtHomeGym on Fri, 04/03/2009 - 7:22pm.

I've never met Chris, but my bet is that if you have a medical emergency in PTC, he may be one of the responders who comes to help you.Before he takes your BP, will you ask him "What am I paying for your retirement plan?" I doubt it. I bet you haven't been to commission meetings and listened to debate about the plans and asked questions. No, you're the typical citizen ingrate who will sit on the sidelines and throw rocks without any facts, all because you fear some county employees may wind up with a better deal than you have or ever hope to have. I bet you don't support our military either.

cmc865's picture
Submitted by cmc865 on Fri, 04/03/2009 - 2:29pm.

NO, it is simple my name is Chris M Campbell,, I am a taypayer and want the county to do the right thing. Look around at other surrounding public safety agencies...Its nothing new. I know several names of folks who have left. I wont hide, call me. 6785573304.
Its not the who cant we replace its losing all your senior and expirernce. Having to constantly retrain new people costs alot of time and money.

SPQR's picture
Submitted by SPQR on Thu, 04/02/2009 - 12:02pm.

has a ring to it. can you say tennis center?

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