Township ups pension contribution for some employees

UPPER POTTSGROVE >> Non-uniformed employees of the township will more than $1,700 each year for their pension benefits as the result of a split vote by the township commissioners Monday night.

The board voted 3-2 to increase the contribution which had stood at 2 percent. Police employees pay 5 percent of their salary, the maximum allowed by the state.

There are eight non-uniformed employees and nine police (uniformed) employees in the plans, according to a worksheet prepared by Commissioner Elwood Taylor and provided to The Mercury.

The approved motion will increase the non-uniformed employee contribution by one percentage point a quarter until it is at 5 percent as well by the end of the year.

The motion, which was opposed by Taylor and Commissioner Martin Schreiber, was supported by Commissioners’ Chairman Trace Slinkerd, Vice Chairman France Krazalkovich and Commissioner Renee Spaide.

Krazalkovich said the combined uniformed and non-uniformed pension plans have $1.2 less than they should to be “fully funded.”

According to Taylor’s worksheet, the pension has 3,414,684 in assets but $4,621,462 in liabilities.

Taylor pointed out that increasing the contribution for non-uniformed employees will not come anywhere close to closing that gap, a fact Slinkerd acknowledged.

According to Taylor’s worksheet, the increase imposed on the nonuniformed employees will only add $14,238 to the pension fund, far short of the shortfall.

But it will cost each non-uniformed employee an additional $1,780 this year, a 150 percent increase for them, while the township will contribute no additional money.

It is money which they will get back, as Slinkerd pointed out, but not for dozens of years, Taylor replied, and all to make a drop in the bucket to a much bigger problem.

He calculated the increased cost to the non-uniformed employees will bring the combined pension fund from 73.9 percent funded to 74.2 percent funded.

Further, said Taylor, the township’s contribution to the police pension fund dwarfs its contribution to the non-uniformed employee pensions, whose 2 percent contribution was until last night matched by a 2 percent contribution by the township.

For non-uniformed employees, they paid $1,186 at 2 percent and will pay $2,966 as a result of the vote, while the township contribution stays as $1,106.

For the police, on the other hand, the employees pay 5 percent and the township contributes 18 percent.

That means each police officer contributes $3,713 each year and the township contributes $13,605 for each officer each year. Additionally, police can start collecting their pension at 55 whereas the non-uniformed employees must wait until they are 65, Taylor pointed out.

More befuddling is it was not entirely evident that the board has a grasp of the full scope of the problem, or of its ultimate cause.

Figures from the previous year showed the pension plan had a surplus. The plan is being audited and Krazalkovich said the township has put out requests for a new fund manager.

It is a solution, by the way, that it is not clear the township’s pension committee — comprised of two township appointees and one pension plan member — recommended or is even aware of.

According to the Upper Pottsgrove Township Code: “The general administration and management of the plan shall be under the direction of a Pension Committee, as appointed by the Township Board of Commissioners. The Committee shall consist of two duly appointed Township representatives and one pension plan member.”

However any decisions of the committee are subject to approval by the board of commissioners.

Schreiber made a motion to table to the vote to find out the pension committee’s position on the matter, and Taylor seconded it, but it was defeated by the same 3-2 split.

And when Taylor asked if the pension committee had made a recommendation for the motion, Slinkerd looked at him, blinked, and turned his head and asked if there were any other questions. Then they voted. In an email reply to a Mercury question, Township Manager Michelle Reddick said the pension committee includes “Officer James Crawford, Siobhan Klinger and myself as Township Manager. Our last meeting was held on January 15, 2019. We do not have minutes from that meeting as we are not required to keep minutes of those meetings. We do not have another meeting scheduled as the Pension Committee typically meets on an annual basis.”

Asked if the pension committee was aware of the increased contributions for non-uniformed employees, or had made a recommendation, Reddick replied “I do not recall whether the increase in pension contributions for non-uniformed employees was discussed at that meeting.”