News

Sound Decisions Strengthen County Pension Plan

The value of York County’s pension plan is among the fastest-growing in the nation, putting it on strong financial footing for the future.

An actuarial report presented Wednesday to the York County Retirement Board shows that the value of the plan increased from approximately $252 million to $300 million in 2013. That’s a jump of $48 million, or 19 percent.

The County’s plan continues to rank as one of the fastest-growing in the nation among public pension plans, according to figures presented to the Board separately by Lee H. Martin, a principal with the investment consulting firm, Peirce Park Group. As of the end of the first quarter of 2014, the funds trailing five-year performance ranked within the top 6 percent of public funds.

The value of the plan has more than doubled since March 2009, when it was worth $138.8 million.

“Given the attention paid to financial challenges of the state-administered pension plans, we want to make sure people understand that the York County plan is in good shape going forward,” said County Controller Robb Green, secretary of the Retirement Board. “We are committed to a comprehensive investment and contribution strategy to ensure the plan is properly funded for the future.”

The actuarial report presented Wednesday was prepared by the Hay Group. It reviews the plan’s standing based on performance and expected costs in the future. Martin provided a separate report detailing the fund’s performance in the first quarter of 2014.

The actuarial report found that the pension plan as of January 2014 had a funded ratio of 87.8 percent.

A pension plan is widely considered to be healthy at 80 percent, according to the U.S. Government Accountability Office. Organizations with unhealthy ratios ultimately can be forced to raise taxes, cut spending or reduce benefits to meet obligations.

York County’s plan dipped slightly below 80 percent in 2010, 2011 and 2012 due to losses incurred by the recession, but has bounced back strongly due to its strategic approach to investing, Martin said.

For example, the Retirement Board continued to maintain a balanced approach toward investing in stocks and other equities during the recession, when many other funds instead shifted money away from the stock market to lower-risk, lower-return products such as bonds. The County’s balanced approach allowed it to be on the leading edge of growth when the stock market began to recover.

“The natural knee-jerk reaction in a recession is to pull funds away from the stock market,” said Treasurer Barb Bair, a member of the Retirement Board. “Instead, we made a strategic decision to continue investing in the market so the pension fund would be on the forefront when stocks crept back up.”

The County has also chosen to avoid investing in illiquid hedge funds, allowing the County more flexibility to react when market conditions worsened, Martin said.

There are approximately 1,050 people currently receiving benefits through the York County pension plan. Individuals must contribute at least 5 percent of their annual pay to participate. Only employees with 5 or more years of service are eligible to receive benefits upon retirement.

Employees with fewer than five years of service receive their contributions, plus interest, upon termination of employment with the County.

Eligible employees can begin to receive benefits at age 60, or at age 55 if they have completed 20 years of service. The benefits received are based upon an employee’s length of service, individual contributions toward the plan and the average salary of the employee’s final three years of employment.

Members of the York County Retirement Board are: President Commissioner Steve Chronister, Vice President Commissioner Doug Hoke, Commissioner Chris Reilly, Controller Robb Green and Treasurer Barb Bair.

Communications Office » In This Section