by FCTA's Charles McAndrew at BOS meeting, 04/06/2017
I was the 58th speaker to the County Board of Supervisors. My speech was on just one subject: PENSIONS!
Here were my points:
Raise the age for new employees to 67, the same age as one who would retire with Social Security.
Move all three major pension funds, i.e., the Employees Retirement Fund, Police Retirement Fund and the Uniformed Retirement Fund to a system similar to the Federal Government, i.e., the Federal Employees Retirement System (FERS). See footnote on this below.
Realize that pension costs are growing as noted by the Washington Post in a 01/27/2017 article titled, "Pension costs plague Fairfax budget". The article goes on to state that "since 2010, pension expenses in Virginia's largest jurisdiction have nearly doubled to $219.5 million at a time when the stubbornly lukewarm local economy has kept revenue down." But the Post failed to state that in 2008 and 2009, Fairfax County failed to fully fund their pension systems during the recession. Fairfax County pensions are growing each year and eventually these pension will become unsustainable!
As I understand, Fairfax County has the only Supplemental Social Security system in the entire region! According to Mr. John Hummel, CPA and Deputy Inspector General of the Montgomery County, MD Office of the Inspector General, his county does not have this system! This system costs Fairfax County approximately $36 million each year. This system should be canceled!
Fairfax County needs to fully fund their pensions. As I understand, approximately $100 million is an unfunded pension liability for Fairfax County. This may not include the Virginia Retirement System.
I urge the Fairfax County Board of Supervisors to carefully review their pensions, with the idea to either go to a 401K system or something similar to FERS for all new employees and to raise the retirement age.
NOTE: In the summer of 1985, I worked in the Office of Financial Management in the U.S. OMB under Director David Stockman. He assigned a team of pension experts to study the Civil Service Retirement System (CSRS). They projected costs out for 30 years, i.e. to 2015, and predicted that the CSRS would cost billions and greatly increase the National Debt. So they made a significant change by setting up a less generous system called the FERS. This system was implemented in 1987 for all NEW employees hired in the Federal Government. So my point is that the Fairfax County Government needs to change their unsustainable pensions systems to a more realistic systems similar to the Federal Government's FERS.
[End of speech.]