Thursday night the Fayette County Commission is expected to vote on offering a defined benefit pension retirement plan for county employees.

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 vote is expected to take place Thursday night at 7 p.m. during the commission meeting at the Stonewall Avenue county government complex in the large meeting room near the fountain.

While many local governments and private companies have had major trouble with underfunding their pension plans, supporters contend Fayette’s pension plan is different and will avoid those pitfalls.

Under the proposal, current county employees will not be credited for any time served before the plan goes into effect. Employees will be allowed to “buy back” credit for years of service with funds from their current retirement accounts. Employees would be vested in the program with five years of service, and there is also a possibility of having the benefits assigned to a spouse upon death.

Employees would earn a monthly retirement benefit equal to 1.5 percent of their salary for each year of county service with a maximum of 30 years. That means the most the program will pay an employee is 45 percent of their salary.

Employees will be required to contribute 2.5 percent of their salary to the plan, officials said, noting that the most the county would provide an employee is about 27 percent of an employee’s salary during retirement, with the remainder being from employee contributions.

The plan was also designed so that if the county’s contribution exceeds 4 percent of all salary for a given year, the county will shrink the amount of funds it contributes to employees’ individual retirement plans to cover the difference.

Fayette’s defined benefit pension plan does not include any cost of living adjustments, officials said.

County officials have contended the pension plan will help retain employees, as exit interviews from departing employees have cited the lack of a solid retirement plan as one reason they left.

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 8 percent.

There is also language in the plan that if the county’s defined benefits contributions eclipse 4 percent of payroll, a corresponding reduction will be made in the contributions toward employees’ 401 and 457 retirement accounts, Smith has said.

An actuarial study performed for the county determined that if the pension fund invested half in stocks and half in bonds, there is a 75 percent chance the county’s highest contribution over the next 20 years would be no more than 4.6 percent of payroll, and a 99 percent chance the average cost would be 3.8 percent of payroll or less.

That study was calculated based on “randomly selected annual returns” on stocks and bonds from 1905 through 2004, according to a letter from actuary Clark Weeks of WRS Benefits.

Public Safety Director Allen McCullough, who served on an employee committee that studied the issue, told the commission last week 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.