New Castle News

January 17, 2013

No raise for county retirees this year

Debbie Wachter
New Castle News

NEW CASTLE — Even though Lawrence County’s pension fund gained nearly $4 million last year, retirees won’t be getting a raise.

Joel Bender of Merrill Lynch, manager of the pension fund, gave the county retirement board an overall report of the fund in 2012 at its quarterly meeting Tuesday.

At year’s end, the fund was invested 36 percent in portfolio bonds and 53 percent in stocks. The remaining 11 percent was in cash.

The fourth quarter was basically flat with zero percent returns, Bender said. And year to date, it is up 9.3 percent in performance.

Last year started with $43,366,096 in the fund and ended with $47,315,948, Bender said — a $3.9 million gain.

The retirement board set the interest rate paid to the plan for vested employees at 4 percent, the same as last year, which is the minimum by law.

Last month, the board unanimously voted down a cost-of-living increase for county retirees for 2013 because the county has to pay $1.5 million into the retirement fund this year, Gettings explained after the meeting.

The cost the county would have borne in a cost-of-living increase under the Consumer Price Index “was going to be astronomical for the county, over $1.7 million.”

The county would have had to pay a total $3 million into the fund, Gettings pointed out.

“It was my recommendation that (the board) couldn’t possibly do that without (the commissioners) raising taxes,” he said, adding, “They deserve an increase, that’s not the point, but right now it’s not affordable.”

The county’s contribution to the pension fund last year was $1.1 million. It is significantly higher this year because of three factors, Gettings said. He cited the performance of the investment market as the largest factor, the number of county retirees drawing a pension and the age of the people getting pensions.

Currently the county has 282 pensioners.

Gettings pointed out the county paid $2,369,226 in annuities to retirees last year. It paid $231,146 in refunds to people who left the county’s employ and it paid $24,364 in death benefits. Administrative costs totaled $161,026.

The board also received a letter from Merrill Lynch informing it that after 35 years, the company no longer will invest the county’s retirement money, as it is exiting the public funds business.

Bender wrote the county a letter advising that the county’s portfolio will continue to be managed by Merrill Lynch investment manager Jay Post of BlackRock, but the county must hire a new custodian of the funds.

Gettings said the county will have to shop around for a new custodian, such as a local banking institution.