Retirement fund performing well
Carbon County's retirement fund is performing well above expected in 2013.
During the monthly meeting of the retirement board Robert Crampsie, county controller and secretary to the retirement board, provided the investment performance of the retirement fund for the year to date.
The fund started off the year with a market value of $63,409,980. There was also $1,360,394 in contributions to the fund and $3,557,015 in disbursements, making the adjusted beginning balance $61,213,359.
"You can see there is a big difference in what is coming into the fund and what is going out," Crampsie reported, adding that the reason for more disbursements than contributions is due to the fact that there are over 110 more retirees this year than in 2008.
The portfolio value as of Nov. 30 was $73,091,830, which represents an increase for the year of $11,878,471. This equates to a year-to-date rate of return of 19.41 percent, up 11.91 percent from the annual actuarial assumption of 7.5 percent
Crampsie pointed out that even though the fund is performing extremely well, the county must still look at its liabilities.
The county's liabilities is currently at $71,702,000, and is expected to be $77 million for 2014. The county must also pay $775,000 for its annual required contribution to the fund.
"Our assets may be at an all-time high, but our liabilities are also at an all-time high," Crampsie said. "We're moving in the right direction in getting to the point where we will be fully funded again."
Following the discussion, the board voted on the 2014 member accounts interest rates. The interest rate must be between 4 and 5.5 percent.
Crampsie noted that from 1992 through 2009, the county paid 5.5 percent, but in 2010, dropped to 4.5 and in 2011 and 2012, went to 4 percent.
"I think there is a correlation in what we pay on members accounts and how the funding is performing," Crampsie said.
Ronald Sheehan, county treasurer, made the motion to set the rate at 4.5 percent, a half-percent more than 2013.
He said that the half-percent increase is a way to give a little back to the employees.
"It moves us back to near where we once were, where previous employees were getting 5.5 percent," Sheehan said. "The reason for it was the economy is improving, but it's not all together there yet so let's take it in steps. Moving it a half-percent will still leave you with a pretty good buffer.
"I think it's nice when we can do this, especially since a lot of the employees that are part of the retirement system did not see a raise this past year," he added.
The board also decided that it will forgo giving a cost-of-living increase to retirees in 2014.
The reason is because even though the fund is performing well, the liabilities outweigh the assets.
"I think we would like to say we are able to grant the raise," Commissioner William O'Gurek said, adding that the county is facing a lot of cost increases and challenges with living within the finances it has set. "At this time, I don't think it is the right time to increase our liabilities by $200,000 and increase our annual required contribution payments. It's unfortunate, but our challenge is to run our budget as efficiently and effectively as we can."
He cited the uncertainty of future budgets, the stock market performance, and state and federal cutbacks as other reasons.
"The numbers coming in are far lower than the numbers going out in cost performance," O'Gurek added.
Commissioner Thomas J. Gerhard agreed, saying that the liabilities outweigh the assets.
"We didn't budget for a cost-of-living raise this year," he said, adding that maybe it can be budgeted next year.