View Mobile Site

Hall County keeps close tabs on unfunded pensions

Retirement benefits ‘in good shape,’ county official says; program was frozen in ’98

POSTED: April 25, 2014 11:42 p.m.

Despite Hall County having one of the larger unfunded pension programs of any government or authority in the state, local officials insist retirees have nothing to worry about. 

“The plan is in good shape,” said Hall County Human Resources Director Bill Moats. “There’s no reason for people to be alarmed over the condition of that plan.” 

The liability on the county’s back relates to its defined-benefit pension plan, which was frozen to new participants in 1998. 

At the beginning of the current fiscal year, Hall County’s accrued cost under this plan was about $48.5 million, assuming a lump-sum one-time payment were made to fulfill its total obligation. 

After deducting about $17.4 million in assets, the county’s unfunded pension liability comes to more than $31 million, according to county finance officials. 

The county’s annual pension contributions can vary wildly, partly as a result of credits it might receive for overpayments in a given year, officials said, and partly because of budgetary limitations. 

For example, in the 2013 fiscal year, the county budgeted $3,041,000 for pension costs, but contributed about $3.4 million. This overpayment reduced its net pension obligation entering the 2014 fiscal year to $182,000. 

The county paid just 72 percent and 63 percent of its annual pension obligations in fiscal years 2012 and 2011, respectively. 

Hall County Finance Director Vickie Neikirk said defined-benefit plans like this are “going by the wayside ... because they are so expensive.” 

But the county’s obligation to past, current and future employees goes well beyond pensions. 

Other post-employment benefits are currently unfunded to the tune of $54.5 million, assuming all benefits were paid out today. Health care benefits account for the largest portion, according to Moats, and premiums are rising. 

“So that’s just giving us an idea of what our expected costs are going to be down the road,” he added. 

The net OPEB obligation increased more than $6 million between the beginning of fiscal year 2012 and the end of fiscal year 2013. For each of those two years, the county contributed $1.4 million and $1.9 million to OPEBs. But those contributions accounted for just 25 percent and 49 percent of the total annual cost incurred. 

As county officials prepare to release a fiscal year 2015 budget proposal in the coming weeks, funding retirement benefits remains a point of discussion. 

“It’s a very large concern,” Neikirk said. “You have to make sure that that’s one of the first things that gets addressed.”


Contents of this site are © Copyright 2010 The Times, Gainesville, GA. All rights reserved. Privacy policy and Terms of service

Powered by
Morris Technology
Please wait ...