Pension board needs to focus on real issues rather than chase haints

September 23, 2012 

Emotions, real and perceived, have been rising in the meetings of the Macon Fire and Police Employees Retirement System Board for months. There have been three main actors, Mayor Robert Reichert, former County Commission Chairman Charlie Bishop and former Fire Chief Jimmy Hartley. The latest salvo in what has been described by Hartley as “war” is the effort to remove Lynn Wood, member of the board, because he doesn’t live in the city. The validity of any decisions he’s been a party to are open to challenge.

Bishop and Hartley are convinced the mayor is trying some sort of pension rope-a-dope even though all the evidence points to the contrary. It’s understandable that pensioners would watch the plan closely, but to spend thousands of dollars needlessly, looking for haints that aren’t there does a disservice to all recipients and future recipients of pension funds.

The role of the board is to make sure the plan is actuarially sound with enough money for present and future retirees. The city, along with many municipalities should curse the day such pension plans were designed -- particularly those plans where employees withdrew from Social Security. Such plans all over the country have become unsustainable.

Chicago teachers were on strike for eight days and the one issue they should have dealt with but didn’t hovers like a dense fog over everything the new deal may or may not accomplish. The Chicago Teachers’ Pension Fund has $10 billion, however, according to The New York Times, the disbursements are $1 billion annually. Even though Chicago is dealing in billions of dollars, no math whiz is necessary to figure out that within a short period of time its plan will be insolvent.

Fortunately, that’s not the case with the police and fire pension fund here. It’s the city’s and soon to be the consolidated government’s task, to make sure the fund remains sound. But as the conversations continue leading to consolidation next year, one of the top issues should be changing from a defined benefit plan to a defined contribution plan for all new employees. The interests of present members of the plan are protected.

Making such a change now won’t be noticed much, however years down the road, the new government will be out of the pension business. And that’s right where it should be.

-- The Editorial Board

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