Butler County is lowering the estimated rate of return for employee pension plan investment in order to more realistically anticipate future costs.
“While it does increase the liabilities and increases the contributions, it situates the plan in a position that we’re able to take less risk and I think that’s very important given the fact that we now have more retirees in the plan than we do active participants,” Butler County Controller Ben Holland said in an interview.
The Butler County Employees Retirement System unanimously approved lowering the plan’s assumed rate of return from 7.5 percent to 7.25 percent effective for the 2018 valuation. This move will increase the projected liability by about $6.7 million.
Holland called this decision a “responsible thing to do” as it gives employees the benefit of stability and sustainability of the plan, as well as provides the county and taxpayers with realistic cost estimates.
“It makes it more likely that you’re going to achieve that and not pass that cost and risk onto future taxpayers,” Holland said. “It’s basically making sure that today’s taxpayers pay their fair share and that future taxpayers don’t pay more than their fair share.”
Holland expects this lowering of estimated return to be an incremental step in the right direction and market performance could dictate further adjustment in the future.
Written By: Ryan Saeler for the Butler Radio Network