Macon pension board at odds, but fund called healthy

Legal disputes mar board’s operations

jgaines@macon.comNovember 8, 2012 

Legal quarrels continued to bedevil the Macon Fire & Police Employees Retirement System board Thursday, even as financial consultants soothed some board members’ fears about the pension fund’s fiscal health.

Four pension board members were present for most of the meeting, reflecting one longstanding conflict: whether Lynn Wood, who joined the board as the citizen-at-large member in January 2011 and was later elected chairman, can continue to hold his seat.

Wood resigned as board chairman in September, citing increased workload in his job as assistant vice president at SunTrust Investment Services, but said he would remain as a board member.

Macon Mayor Robert Reichert filed a petition Sept. 17 asking that Wood be declared ineligible because he lives outside city limits. The city charter requires that member to be “a private citizen of the city.”

On Tuesday, Bibb Superior Court Judge Phil Brown ruled that Wood is not eligible and declared his seat vacant.

Wood said Wednesday afternoon that he wasn’t sure whether he’d contest the issue further, and would rely on what the board wanted. He wasn’t present at Thursday’s meeting.

Attorney Bob Lovett, whose firm Lovett & Myers was hired as the board’s outside counsel more than a year ago, recapped Brown’s ruling but wouldn’t discuss any further action without closing the meeting to the public.

The motion to close the meeting failed, with current Chairwoman Andrea Grinstead and board member Jimmy Hartley voting to close it. Board member Frank Tompkins voted no; member Larry Schlesinger, a Macon city councilman like Tompkins, had already left. With that failure, the meeting adjourned.

There had been an earlier indication of the animosity between Lovett and Schlesinger, when the board voted 4-0 to approve payments totaling about $33,000 to Ryan Labs asset management, State Street Bank & Trust and Merrill Lynch financial advisers, but balked at a detailed $17,525.10 invoice from Lovett & Myers.

“I would like to delay approval of this,” Schlesinger said. “This is the first time I’ve seen this, and it’s rather extensive.”

That led to a long debate on what the law firm was hired to do, and what it’s still doing.

Its initial tasks have been essentially completed, but in May the board added more, Hartley said.

“Moving forward, I do not plan to vote for any further monies out of the pockets of our retirees for Lovett & Myers for any further services later on,” Schlesinger said.

Paying the law firm’s bill deadlocked 2-2, with Grinstead and Hartley voting for it, Schlesinger and Tompkins opposed.

In a report to the board, John Collier of Merrill Lynch and Sean McShea of Ryan Labs agreed that the fund’s investment health is tied to how the U.S. economy performs as a whole, especially how the federal government handles a looming crisis over the national debt. But the things that the city and pension board can control are in pretty good shape, with funding levels far above the national average for municipal pension systems, they said.

Answering Hartley, Lawrence Williford of Merrill Lynch said even if the plan is closed to new members, the government will still be obliged to keep funding its existing obligations.

“We’ve asked that question a number of times, and that’s the first time we’ve heard that,” Hartley said.

Section 25 of the city-county consolidation legislation, which passed the General Assembly in March and was approved by local voters June 30, specifies that anyone currently in city and county pension plans cannot have their rights and benefits reduced. Even if the consolidated government creates a new pension system for future employees, that cannot harm the existing plan’s beneficiaries, the law says.

Local officials, notably Reichert, have repeatedly said they have no intention or ability to cut the pension of anyone already vested in the pension plan.

Collier and Williford confirmed Thursday that the new government must assume the obligations of its predecessors. Like existing public bond debt, “it doesn’t just go away when the government goes away,” Williford said.

This sent former board member Charlie Bishop into a long string of accusations of malfeasance against city officials, asserting unspecified secret meetings and particularly targeting Councilman Larry Schlesinger, a pension board member.

“Thank you, Charlie. I love you too,” Schlesinger said sarcastically as Bishop wound down.

Both Bishop and Schlesinger left soon afterward, a few minutes apart.

To contact writer Jim Gaines call 744-4489.

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