Fairfax County Pension Reform Testimony
by FCTA's Charles McAndrew at BOS hearing, 11/20/2018
Good evening Madame Chairman, Members of the County Board and our County Executive. My name is Charles McAndrew and my wife and I have been homeowners and taxpayers in Fairfax County since 1968. As you know, I have appeared before you for decades protesting the high real estate taxes and the county budget that goes up each year two to three times the inflation rate! This evening, I am here to state that I am in favor of the proposed pension changes as summarized below:
Increasing the Minimum Retirement age from 55 to 60
Increasing the Rule of 85 to the Rule of 90 -- age plus years of service will need to be 90 for full retirement for general county employees
Eliminating the Pre Social Security Supplement-basically county paid social security at retirement until social security age (currently budgeted at $35 million for FY 2019)
Increasing the Salary Averaging Period from 3 years to 5 years
Eliminate the Provision that automatically increases the retirement annuity by 3% annually
These changes would take effect for new employees hired after 1 July 2019 and because they appropriately impact new employees only, much of the savings will be in future years.
One of the speakers before me stated that Fairfax County is the second richest county in the USA. If that is true, then why does the Fairfax County Government have a total of $5.6 BILLION unfunded pension liability? This consists of $2.2 billion for the general county employees and $3.4 billion for the Fairfax County school system employees. I heard one of the speakers state that it will be sometime in 2033 that the county will have funded these county pension systems. This is wishful thinking! At this rate, the county has unsustainable pension systems!
Also, I have heard from some of the speakers before me, some from various union officials stated that these pension proposals will detract from obtaining the best and brightest employees. Such statements as "we must keep these benefits to attract the best and brightest people to employ!" Well, not really!
The Federal Government saw the writing on the wall back in 1985 when the U.S. OMB under the Director David Stockman assembled a staff of pension experts to study the Civil Service Retirement System (CSRS) from 1985 and project the estimated costs for 30 years into 2015. When the study was completed, it showed that TRILLIONS of DOLLARS would become an unfunded pension liability that was unsustainable! So beginning in 1987, all new employees coming into the Federal Government, except the military, would be put into a much less generous system called the Federal Employees Retirement System (FERS). Did this stop the Federal Government from obtaining the "best and brightest employees?" Nope! So in 1987, Federal employees could transfer from the CSRS into the FERS. Very few did that! The Federal Government today has a long line of possible employees and the FERS does not deter them from applying for employment.
In conclusion, I urge the board to vote in favor of these provisions and hopefully support sustainability in the county pension systems! In addition, I support the presentation given by Mr. Arthur Purves, President of the Fairfax County Taxpayers Alliance this evening. Thank you for your attention.