Lower than Expected Pension Contribution May Be Offset by Workman's Compensation Requirement
The four transitional committees --- one for finance, economic development, public safety and public works --- are each challenged by Mayor Elect Steve Williams to report that committee’s #1 priority for the city. Mayor elect Williams will not comment on findings until after the December 20 reports from all committees are received.
During the short fire pension fund report, Mellert explained that “we cut our [brokerage] fees in half.” He and Blair Taylor, Executive Director of the Municipal Pensions Oversight Board, had observed the prior firm’s fees were on the “high side” and “we were not seeing any growth on our two million dollars.”
He praised the City National trust department for exceptional , drop of the hat service.
Although no one from the Police Pension Fund appeared before the committee, Runyon stated Huntington Police pension holdings now funds approximately 20% of its liabilities and has more than $20 million dollars in assets.
Based on the city’s most recent actuarial report, police and fire contributions should be about $459,000 less than projected.
Unfortunately, that savings and more will be needed to fund the city’s self-insured Workman’s Compensation fund. This fund must maintain about $5.4 million in cash, surety bonds or bank letters of credit. The fund must come up with $1 million to meet the obligation.
These pension investment numbers represent legacy fund status following the legislative 40 year re-financing fix that was the first priority of the Wolfe Administration. In 2009, the funds had $130 million unfunded liabilities --- they were paying out more than they were taking in. At that time, court receivership was considered for many of the pension plans in West Virginia.
The legislature passed a bill allowing participating cities to undertake a 40 year re-amortization of employee retirement funds to make them financially stable. At the time of legislative passage, the police had $58 million in unfunded obligations and the fire department had $73 million of unfunded obligations. At the same time, those legacy funds were closed to new hires.
The committee, which consists of Jim Insco, Sean Hornbuckle and Clint McElory, also discussed how a firefighters pension is currently computed. Mellert explained that state law ambiguities essentially allow as many remuneration determinations as there are funds.
Runyon explained, “it’s how you interpret the law.” Since there are 52 funds calculated in 52 different ways, "It would be helpful to have a legislative rule [that says] 'here’s the law, here’s how you calculate it.'"
Answering a committee inquiry from last week, Runyon responded that based on a conversation with Morgantown officials, no “surcharges” could be added to the cost of Marshall University tickets. He was told that “the legislature would have to act.” SMG and the Greater Huntington Parks and Recreation Commission have added surcharges to events at the Big Sandy Superstore Arena and Harris Riverfront Park to assist with venue expenses.
BSSA is expected to require a possible infusion from the general fund to offset a drop in Coal Severance Tax Revenue.