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Council to change troubled pension plan


The County Council has decided to fix the financially troubled pension fund for elected and appointed officials by switching, at the recommendation of the Pension Oversight Commission, to a plan that pays benefits based on employee contributions rather than years of service.

The commission, a panel of citizens and representatives of county employee unions, had earlier recommended approval of a plan devised by County Executive Robert R. Neall that would have merged the plan for elected and appointed officials with the financially healthy fund for general county employees.

Mr. Neall's pension bill also would have frozen benefits for current appointed and elected officials while increasing their contribution from 4 percent to 8 percent.

Deborah Turner, commission chairwoman, said the vote in favor of Mr. Neall's plan was taken before the new bill, the brainchild of county auditor Joseph Novotny, was introduced by council members Maureen Lamb and David Boschert.

Walter Chitwood, the county's chief executive officer and acting financial officer, said the Neall administration supports the plan approved Monday, which is called a defined contribution plan.

Under that plan, elected and appointed officials will contribute 4 percent of their pay, which will be matched by the county.

Ms. Turner said the commission favored the defined contribution plan because "there can be no transfers of service from other governmental agencies."

Service transfers were a major cause of the drainage of funds from the plan for the appointed and elected officials, according to the county's actuary.

Under state law, officials may transfer their accumulated years of service from a state or local government but do not have to transfer pension assets.

In 1990 and 1991, 15 new officials were hired, transferring 137 years of service into the plan for appointed and elected officials. Seven of those officials were part of Mr. Neall's staff.

Legislation passed by the council in 1989 that increased benefits and lowered the retirement age also contributed to the problems with the plan, the actuary said.

Even if the council sets up the new and improved plan for appointed and elected officials, the $14 million liability that has accrued must be paid for.

County officials are still trying to decide over how long a period of time they can cover the sum.

At the close of Monday's meeting, 24 amendments to the pension bill were approved, most of them technical.

The bill will come up for another public hearing and vote next month.

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