SANATOGA PA – Some of the gap between what Lower Pottsgrove (PA) Township owes its employees in unfunded pension liabilities, and what it has saved so far to pay them, will be bridged by a series of installment payments the municipality plans make during a four-year period, the Board of Commissioners agreed Thursday (Aug. 19, 2010).
The township intends to take advantage of repayment options offered by the state under Act 44 of 2009. That’s the same legislation under which Lower Pottsgrove pensions were identified by recent a Pennsylvania Public Employee Retirement Commission (PERC) report as being “moderately distressed,” because the calculated ratio of township assets to liabilities is only 69 percent.
Pension consultant Joe Duda of Flourtown PA-based Duda Actuarial Consultants described for commissioners the installment plan and the amounts they’ll need to budget in 2011. “It’s not like Harrisburg is giving you money,” Duda told board members. “It’s just giving you some relief, and letting you stretch out the payments.”
Lower Pottsgrove holds two pension plans: one for uniformed employees – the members of its police department covered by labor contracts – and one for non-uniformed workers like clerks, secretaries and others not in a union. Through the period reviewed by PERC, the township owed a total of $4,716,009 under both plans but had saved only $3,255,494. The $1.46 million difference represents its unfunded liability.
Next year, Duda noted, Lower Pottsgrove will be charged about $163,000 for non-uniformed pension costs; and $213,000 for its uniformed costs, some of which will be offset by outside revenue from the state. Both sums include the proposed extra payments.
The state is not demanding Lower Pottsgrove pay all that’s unfunded, Duda noted. The PERC report indicated an additional payment of only 1 percent, less than $50,000, would favorably change the township’s unfunded status from “moderately” to “minimally” distressed. Under the plan presented by Duda and unanimously selected by commissioners, the installment payments would amount to considerably more.
Although the extra savings won’t put Lower Pottsgrove pensions into the “not distressed” category, where it has saved 90 percent or more of what it owes employees, it moves the township closer to that mark, Duda said.
Related:
Related (to the Lower Pottsgrove Board of Commissioners’ Aug. 19 meeting):
- Lower Pottsgrove Adds To Pensions On Installment Plan
- Bottom Dollar Market Wins Lower Pottsgrove Approval
- Sanatoga Bridge Open In 11 Days, PennDOT Promises
- Commissioners Support Pottstown’s Grant Request
- Bridge Repair Schedule Likely On Tonight’s Agenda
Photo from Clipart.com
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Who’s the finance person responsible for the underfunding and was it a concious decision. If it was a decision who made it? Let’s get rid of that person as they are a liability to the fiscal solvency of the township. All we need is some act where we suddenly have retiree’s we did not expect and we’d be in trouble.