$6M hike sought for health, pension funds
by Nikki Wiley
August 13, 2013 12:14 AM | 1840 views | 3 3 comments | 7 7 recommendations | email to a friend | print
MARIETTA — County finance staff wants the Cobb Board of Commissioners to shell out $6 million toward health care and pension funds of retired employees above the $32 million needed to keep those funds on sound financial footing.

Jim Pehrson, county finance director, is asking the county to give no more than $5 million to the pension funds drawn by retired county employees. The amount would be paid at the end of the fiscal year, Sept. 30, if the money is available.

Commissioners will consider the expense at 9 a.m. today at 100 Cherokee St., Marietta, during their regular meeting.

Cobb already must pay $32 million toward the pension fund as its annual contribution, but Pehrson says that extra cash will help pad the account in case any unexpected market changes cause the fund to plummet.

“We should make that ($32 million) contribution without any problem, without this $5 million,” Pehrson said.

Pension funds are invested and are vulnerable to changes in the economy. The fund was doing well in the late 1990s but suffered during the Great Recession, said Gary Bottoms, a volunteer member of the board of trustees that oversees the Cobb County Government Employees Pension Plan.

“We’ve had a period of subpar returns in the economy,” Bottoms said. “It’s not due to anything that Cobb County has done. It’s just investment returns.”

Funds have been below projections for the past few years, but Bottoms says the fund is healthy compared to the issues other local governments face.

There won’t be any immediate effect if the county opts not to spend the extra money. The request is a long-term approach, Bottoms said, to bringing the fund back to its pre-recession levels.

“The extra money will be helpful,” Bottoms said. “It will help hold down the employees’ required contribution and help hold down some of the county’s required contributions.”

An economy still recovering has made planning for the unexpected difficult, but Pehrson says Cobb has consistently been able to fund its pensions because it is paid for by current employees.

“The bottom line is every employee contributes and the county has a match component,” Pehrson said.

Another $1 million is needed, Pehrson says, to maintain the county’s retiree health care plan.

This is the first year Cobb has given retired employees a monthly stipend to offset their Medicare premiums.

“The county is now giving a stipend to the employee for them to go out through Extend Health and basically purchase their own Medicare insurance,” Pehrson said. “They can shop for what Medicare program is best for them.”

Bob Ott, who represents southeast Cobb on the Board of Commissioners, says it’s not a small amount of money but he believes Pehrson’s reasoning is sound.

“We decreased liability in one place and increased it in another,” Ott said.

Pehrson says the system has saved the county about $3 million.

Still, it needs $1 million to offset the reduction in payments made directly on behalf of retirees.

County pensions took the spotlight during part of the campaign for Cobb chairman last year. Candidate Mike Boyce accused Chairman Tim Lee of mismanaging the fund saying the county’s pension and health care funds have more than $500 million in unfunded liabilities.

Comments
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tired of it
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August 14, 2013
its called getting ready for obama care, not such a good thing but people were stupid enough to vote the idiot in.
Mike O. Bedenbaugh
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August 13, 2013
The retirees 65 years and older starting the 1st. of 2013 were required to choose their & spouses own medical and drug policies with which ever insurance company they wanted thru Extend Health which manages the program for Cobb Co. just like Blue Cross does for the County's working employees. These companies receive money for this service. Extend Health also gets an insurance agents fee from the insurance companies the 65 year plus retiree choses. For example: the county quit requiring the retiree to pay a premium each month toward their insurance and allotted them a monthly Health Reimbursement Allowance. The above move saved the county around half what they were paying toward these retirees health insurance which was a smart move on their part; as other major companies and governments are doing also. It did cause the retirees some headaches trying to go thru this process and hopefully it will be better these next years.
FROM TEXAS
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August 13, 2013
Larry Savage and Bill Burne brought this up durning the election cycle oh well!!
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