A decision to fund the county employees’ pension plan at less than the recommended level this year will not have a significant impact on the plan, County Administrator Bryan Shuler said.
Colquitt County Commission voted Monday to fund the plan for 2010 by an amount of $497,888. The payment is due at the end of the month.
The amount recommended by GEBCorp, which manages the county’s pension plan, was $929,654 and the minimum contribution would have been $860,918.
Because the county has over the years made the recommended contribution it had accrued credits resulting in a credit balance of $336,919, Shuler wrote commissioners in a memorandum dated March 11. Ordinarily a county whose plan’s funding ratio is less than 80 percent, as is the case with the county, cannot use those credits to reduce a yearly payment, but an exception was granted this year.
Because of the poor year county governments suffered in 2009, an opportunity was given to use the credits in 2010, Shuler said Wednesday.
The roughly $275,000 the county will save by paying the lesser amount will be banked toward making the larger payments in coming years, Shuler said.
The $497,888 will pay the county’s normal costs for maintaining retirement benefits accrued in 2009 and also fund the annual amortization payment for the county’s unfunded liability associated with previous benefits accrued, Shuler said in his memorandum.
The county had budgeted about $800,000 this year for its contribution to the plan and would have had to come up with nearly another $130,000 in a tight budget year to make the minimum payment.
“This is a one-shot deal,” Shuler said of paying the required contribution of $497,888. “Next year it will go up to whatever amount actuarial tables show, which will probably be closer to that recommended amount.”
The county had a plan funding ratio of 81.5 percent in 2009 -- meaning that if every plan-eligible employee retired today there would be sufficient money to fund 81.5 percent of plan liabilities. The funding ratio has fallen under 80 percent in 2010.
“This action the commission took, in and of itself, is not going to adversely affect that percentage,” Shuler said.
Many counties have plans that are funded at lower ratios, he said.
In 2008 GEBCorp told the county that it was $893,000 short of a 100 percent funding ratio.
Commissioners have discussed the pension issue in recent years, and some changes made be made to the program in the future.
Any changes made would not affect the currently accrued benefits of those in the plan, Shuler said.
“I think you’ll hear it discussed a lot as we go through this budget process,” he said. “Retirement benefits, in general, area a major part of our budget. The decisions we make relative to those play a major role on other spending decisions and providing services.”
County department heads are scheduled to present budget information to Shuler by the end of the week. After that he plans to have department heads meet with commissioners prior to holding commission budget sessions.