By Ashley Hungerford
Marietta Daily Journal Staff Writer
MARIETTA - County employees could see some changes to their pension plans and retiree health-care plans - including longer tenure requirements.
The Cobb County Pension Plan Board told county employees via e-mail Thursday that they will present their recommendations on plan changes to the Board of Commissioners on Tuesday at the commissioners' 9 a.m. meeting.
The recommended changes do not impact current retires or county employees who are eligible to retire by the end of 2008.
If approved by the commission, the changes to the pension fund would go into effect Jan. 1, 2009.
The changes require that all new employees must work for 10 years, rather than the current seven, before they can become vested in the plan.
Cobb Chairman Sam Olens said this change is common in other businesses and governments.
Current county employees that are 65 years old must have seven years of employment rather than five.
In calculating pension benefits, overtime earnings will no longer be included in annual wages.
Olens said the business community made this change several years ago, and he frankly didn't know that overtime was included in benefit calculation.
"I know these employees who have significant overtime will not like these changes," he said. "But the pension board and I felt the pension benefits should be based on actual salary."
Virgil Moon, chairman of the Board of Trustees for the Cobb County Employee's Pension Fund, said the county pays an average of $6 million a year in overtime wages.
A five-year average salary will be used to calculate benefits instead of a three-year average. Moon said this change reduces benefits by 3.9 percent.
The recommendations also include changes in how much the county and employees contribute. Cobb will increase contributions by 0.5 percent for fiscal year 2009, and 0.25 percent each year for the following three years, increasing the county's contribution from 10.5 percent to 11.75 percent
For employees, their contributions would increase by 0.25 percent per year over the next five years - raising employee contributions from 5 percent to 6.25 percent.
Olens said the changes are a proactive step to ensure the stability of the county's pension plan.
"Cobb's seeking to make a decision so that we're better off down the road," he said. "Our position is not that the pension fund is in terrible shape. It's better off than other governments, but that's not good enough. We need to make these changes to ensure the pension is properly funded."
Moon said, "The changes are in response to funding concerns as the county's retirement program is 60 percent funded and needs to be at least 80 percent to be considered fiscally sound."
If the commission approves the changes, Moon said it would bring the pension funding to 80 percent over the next 20 years.Moon said the liabilities have been outgrowing the revenues contributed by county and employees into the pension plan. He said liabilities are growing because more employees are retiring, employees are retiring earlier, employees are retiring with better benefits than originally thought and employees are living longer.
Cobb currently has about 4,100 employees enrolled in the county's retirement system.
The recommendations were prompted following an April report on the pension fund showing the increase in liabilities. Moon said funding for the pension fund went down 7 percent in the last fiscal year.
Following the report, Moon said the Board of Trustees, along with actuarial, investment and legal advisors worked to come up with the recommendations.
The Board is comprised of Moon; Brad Bowers, Cobb's director of finance; Tony Hagler, Cobb Human Resources director; Bill Hutson, former Cobb sheriff; and Gary Bottoms, with the Bottoms Group insurance.
Moon said since the e-mail went out to county employees informing them of the possible changes, he's heard a lot of reaction from concerned employees.
"Any time you do something to potentially reduce benefits, it's not taken positive," he said. "But we want to get the pension plan in good financial shape."
Olens said he understands the recommended changes might not be a popular decision.
"But we need to ensure for our employees that when they retire, they'll receive the full benefits," he said. "What will make the employees happy is to have a pension guaranteed when they retire."
The recommended changes for the healthcare plan benefit would go into effect Jan. 1, 2010.
The county will contribute 2.5 percent of the health premium costs for each year of service, up to 30 years.
Employees who retire before the 55 with less than 35 years of serve will be required to pay a higher premium.
ahungerford@mdjonline.com
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Posted Comments
As a vested employee of Cobb County with nearly twenty years service, I thought that I was working for an honorable and fair employer. Through the years, my outlook and morale have been bolstered by the promise of a decent pension at the end of my career. I believed that if I worked hard and performed well the Board of Commissioners would honor their commitment to me. Morale is tanking over this issue. We really need a new tag line, "Expect the Best..." is a lie from the employees point of view.
As a vested employee of Cobb County with nearly twenty years service, I thought that I was working for an honorable and fair employer. Through the years, my outlook and morale have been bolstered by the promise of a decent pension at the end of my career. I believed that if I worked hard and performed well the Board of Commissioners would honor their commitment to me. Morale is tanking over this issue. We really need a new tag line, "Expect the Best..." is a lie from the employees point of view.
Am I the only one to still notice that Goverment, (especially county and city Goverment)Are the only ones still offering pensions, while the rest of us get 401k plans? Why is this happening?Someone, Anyone?. I will tell you why. Because goverment can get away with it. They are a Monopoly and do not have to be competitive in the open market. They just raise your taxes and all is well...
Call it what you like, this is not a pension plan.
The story indicates that they have known the results of the study since April but they only notify the employees of the proposed changes two work days before the vote to make the changes permanent. They also did not indicate truly why the fund is so underfunded. Could the reason for the shortfall be the slacking economy or mismanagement of the fund. I know a lot of employees with Cobb County who were concerned that there were a lot of people who retired when the current plan was put in place that had only paid into the plan for a year before they began drawing nearly full benefits from it. There appear to be more questions than answers on this issue. Unfortunately, there is little time for the employees who will be affected to get any answers from a process that appeared to be very secretive.
Thank you Sam Olens, you are a responsible leader who realizes how to run a county like a business. Keep up the good work.
Cobb County...Expect the Best Cobb County employees....Expect Less
As another vested Cobb County employee with over 27 years service, I think it's a shame to let someone who is 3 years away from retirement find out that their retirement may be lowered thousands of dollars a year with a stroke of a pen. Yes employees were notified via email on Thursday, but only because the media outlets found out and started asking questions. The plan was to "quietly" approve it Tuesday morning and then pass the word on. All I can say is SHAME ON YOU if you vote to approve these changes. Current employees who have many years invested should be grandfathered in as it is a little late now to learn that your future is at stake!
I would just like everyone to know that the people on this board who say they are trying to make the county pension plan fiscally sound aren't even on the same plan. I haven't seen any announcements to reduce the benefits from the plan they fall under.
Virgil Moon only sent the email after WSB started asking questions. Otherwise, employees would not have known of the changes until AFTER the vote on 09/09. The Board recommending the changes all make about 100K per year pensions, never worked evenings, or morning watch, never fought fires or sustained injuries making arrests. Cobb Gov't brags about the AAA bond rating, millions of dollars in emergency funds reserved, but forgets the retirees and current employees have made the county what it is. These changes mean lower quality new employees in the future, and the citizens of Cobb deserve better. They've benefitted from THE CONTRACT I signed in 1998, by taking a percentage of my base, my overtime, my on call, and my court pay. Now they want to take it away and give me a pension calculated by my base pay, reducing my pension by about 15K per year, taking it from reasonable, to poverty level. The morale was already bad enough, with a county manager who needs to retire, and with a chief who sees nothing more to law enforcement than traffic tickets (The word quota is changed to "performance objectives"). We've worked ourselves beyond the call of duty, and deserve at least what we were promised in "CONTRACT" form. If they make these changes, they'll make more. Cobb Govt pays for everything on the backs of its' employees. Any citizen who appreciates a county employee should be at the commission meeting 09/09.
Maybe "Mike Jones" is right. Olens should give non-vested and new employees a 401 since he is such a businessman. But honor the contracts of the vested!
Virgil failed to mention that another reason for the pension fund's present condition is the fact that it lost $460,537.00 due to a security fraud scandal. He only expects to recover $20,000 to $25,000 dollars in a law suit. With the secrecy around the pension fund, who knows how many such bad investments have occured. Mismanagement is a likely reason why Cobb's pension fund is in the same category as Atlanta and Clayton county. I'd love an investigative reporter to check into this board of "trustees"
I can see the future now... the employees will "retire in place" by not going the extra mile or putting in the extra service. The police and fire departments will soon be like Dekalb, Fulton and Atlanta. And, Mr. Jones, government employees typically make less than the private sector and they ALSO pay taxes, plus the article indicates they pay into their pensions as well. Mr. Olens, you can't run a government like a business because it IS NOT a business - there is no competition, so you have a monopoly. I for one say help the employees becuase they keep my water coming, my parks clean, my roads in good shape,and my home and my family safe.
I feel for Ron and the other county employees. I know a few county employees and they feel very dejected and discouraged. It doesn't seem fair that they give much of their lives and have a belief about what is to come and a few folks can suddenly change it. As a Cobb County voter, I will remember this and I will make sure my church, friends, and folks I work with remember it as well. We voted for a SPLOST to build a better jail, but what about helping the good guys?
As a taxpayer and voter, I want to know how the fund got into terrible shape. I have paid taxes for years. It seems to me the board should answer this question. And, if overtime is an issue, why are the employees required to work overtime. Since the employees have not managed the account, the fault must be with the board, but the employees suffer from it.
The problem is for those of us who hired at a young age that were eligible to retire at 50 will have to work more years, therby paying more into the plan, and not getting percentage credit towards our benefit. This is age discrimination. If I reach the rule of 80 at 49 and someone else reaches it at 55 and we retire at the same time. I will have served the citizens longer, over 30 years, yet I will get less because than someone who only had to work 25 years. I am receiving less because of my age. That's illegal. I will have to pay for my insurance for 6 years. Lawsuit pending.......
There should be NO provision for pensions. Plan for retirement like the rest of the working world - SAVE. 401K plans and other saving programs can be utilized by employees. I don't appreciate MY taxes going to pay for any retirement... other than my own.
Nothing like changing the rules in the middle of the game, eh Cobb? I'll a-make you an offer you can't a-refuse.
Is the MDJ interested in gardening?
Ignore my last entry about gardening. Hit the submit button too early. I typed it complete in the article titled "Mayor Supports SPLOST". Sorry.Anyway, if you miss it - the secret to self-esteem is accomplishment, and not everyone can be an academic. Perhaps some kids could help beutify their schools by gardening and taking care of the football field. They could see their accomplishment and really feel a part.
Cobb County should take care of it's long term employees and not change the "game" near the last inning! Voters should keep in mind how employees are being treated when it's time for re-elections, bond referendum's etc.!
The public should remember this when it come time for another bond referendum or SPLOST vote!
A county manager that gets the max put into HIS deferred comp every payday. Who does not want the cops to have drive home cars, but gets HIS car allowance AND a county car. Who lets his pets pick and choose when they want a new high performance police car or an SUV to drive. Who gives secret pay raises to those employees he chooses, no matter what the "pay scale says" Perhaps a 401K WOULD be better, but if you have worked here for 30+ years, its a little late to do that now. As for Mr. Jones, we pay taxes AND we pay into our retirement. WE just want to be treated fairly, and have these decisions made openly, not in secret. By the way the EMPLOYEES representative to the pension board was an elected official, not an employee.
I think there should be an investigation into where the money was invested, how it was invested and who invested it. The investigation should include looking into whether or not anyone on the board has any "personal interest" or connections to banks, accounts and/or investments the money was invested in. Someone should also look at why they are settling for a $20,000.00 - $25,000.00 recovery on a $400,000.00 plus loss due to FRAUD. The board should consist of employees that the fund effects and not management who are appointed, elected and/or have employment contracts with their retirement benefits guaranteed.
Again we suffer for someone elses mistakes. Cobb, keep your word, you offered this plan to us and we contributed in good faith and based our retirement plans on it. County workers should go the the meeting and show strength in numbers. Olens your unbelievable!