Neall wants to merge pension funds Officials' benefits would be frozen

September 17, 1993|By John Rivera | John Rivera,Staff Writer

County Executive Robert R. Neall has drafted legislation to merge the financially troubled pension fund for elected and appointed officials with the general employees pension fund and to freeze benefits for current officials.

The bill, to be introduced to the County Council Monday night, also will double the contribution for those who transfer to the general fund to 8 percent of their salary. Any future elected or appointed officials must join the employees pension fund.

Adding to the pension reform fray, Council Chairman David G. Boschert said he will introduce a bill of his own Monday to prohibit future council members from collecting a county pension.

Mr. Boschert, who is vested in the elected officials fund and has no plans to quit, said he did not think it was appropriate for part-time council members to collect pensions.

After a brief study of Mr. Neall's bill, he said it had "some good points to it" but added he would have "an outside actuary look at it."

Mr. Boschert is among several council members taking heat for voting in 1989 for changes that consultants say have drained the fund. "I'm not going to make the same mistake twice," he said.

Mr. Neall's legislation is aimed at plugging holes that left the fund with less than half the money it should have.

The executive said yesterday it would be best to close the fund and merge it with the larger and better financed employees fund. At the same time, he made the elected and appointed officials plan less attractive for active members by freezing their benefits and doubling their contribution.

When current appointed and elected officials who transfer to the employees' fund reach retirement age, they can choose the benefits they accrued while they were in their old system or the benefits for all their years of service in the employees' fund.

"This bill represents what we feel we can constitutionally and legally defend," Mr. Neall said. "We feel it solves the long-term problems of the pension system while playing within the rules."

Mr. Neall said he had hoped to roll back some of the benefits already accrued by members of the pension fund, but lawyers told him he couldn't do that.

The bill would, however, keep 11 former officials who left county government before the 1989 changes were adopted from collecting benefits before they are 60.

The changes, which have been repealed, lowered the minimum retirement age to 50.

His lawyers told him early retirement benefits for those people "is a gratuity, and essentially they didn't earn it. So that can be taken away, and this bill takes it away," Mr. Neall explained.

By combining the two pension funds, the cost of the pension benefits for appointed and elected officials will decrease by $1.2 million in the first year.

The savings come from combining the 40 active officials with the more than 2,000 people in the employees fund, which has much less turnover and assumes a longer period of service, reducing the annual cost.

County Auditor Joseph H. Novotny, whose own pension would be frozen at $55,000 under this bill, said he didn't see much sense in increasing the employee contribution if benefits are frozen because it would hit council aides with many years of service the hardest.

"For four years they haven't had a raise," he said. "Now they're going to have to pay 4 percent more and their benefits are frozen. That doesn't seem fair."

But Mr. Neall said the increased contribution pays for the years of generous benefits they will receive.

He added that he will not collect a county pension, even if he stays in office long enough to qualify for one. Elected and appointed officials must serve five years to be vested in the system.

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