HOLLIDAYSBURG – The latest report on the Underfunded Blair County Pension Plan shows significant improvement and no projection of the cash strapped plan.
“We are on the road to full solvency” County pension board chairman Bruce Erb told other board members on Wednesday before tempering his statement with: “We are still the worst funded plan in Pennsylvania. “
Erb’s findings were based on a report that David B. Reid Sr., vice president of CBIZ Retirement Plan Services, presented to the county retirement board.
In preparing the report, Reid looked at the assets, liabilities and related factors of the pension plan to calculate how much the county general fund is expected to contribute to the plan in 2022 to meet obligations for the next 30 years.
His recommendation was $ 5.2 million, an amount the county should be close to hitting based on current trends.
For 2021, the county has budgeted $ 4.75 million for the pension plan, an amount expected to be reached in December.
For 2022, the contribution is expected to be around $ 5 million, according to a policy approved earlier this year.
Comptroller AC Stickel, who sits on the pension board with Commissioners Erb, Laura Burke, Amy Webster and Treasurer Jim Carothers, called Reid’s report on pension plan improvements as “Best news for decades. “
Erb recalled that when he and Stickel joined the pension board in 2016, actuarial reports predicted the fund would run out of cash in 2025.
In February 2016, CBIZ actuary Alvin Winters acknowledged that the forecasts were correct until 2014, when the Commissioners began setting aside $ 2 million per year for the pension, using the proceeds of the pension. sale of Valley View Home.
As commissioners continued to increase contributions to pension funds, the predicted year for the lack of money was pushed back into the 2030s and 2040s.
Reid said his calculation for the 2022 contribution, without an insolvency year, was based on projections spanning 30 years.
The calculation reflects a 7% return on investment, which investment adviser Pat Wing acknowledged as a bit conservative.
Reid’s report showed that pension plan investments returned 11.2% in 2020 and 19% in 2019.
In the early 2000s, when the commissioners let several years go by without contributing to the general pension fund, they spoke of depending on investment returns to maintain the solvency of the plan.
Stickel criticized this tactic and showed no interest in revisiting it.
“Yes, the report showed we’ve had a good two years, but the reality is we won’t always have that. “ said Stickel.
Reid’s report showed that the plan’s investments suffered a 4.3% loss in 2018 and a historic loss of over 26% in the 2008 stock market crash.
Reid’s report also showed total pension plan liabilities to be $ 69 million, down from $ 94 million last calculated, reflecting pension payments owed to current and future retirees.
This calculation also reflects the adoption of the policy adopted earlier this year, encouraging the county to increase its annual contribution to the pension plan by 5% or $ 250,000, whichever is less, in order to reach the level of. recommended contribution.
Erb said the county must follow this policy and current practices to safeguard the future of its pension plan.
“We’re not going to run out of money if we stay the course. “ said Erb.
Mirror staff editor Kay Stephens is at 814-946-7456.