Lycoming County retirement board votes ‘yes’ on pension increase
The Lycoming County Retirement Board approved a 2-percent flat limited Cost of Living Adjustment by 3-2 vote Thursday, meaning county retirees will see a 2 percent increase to their monthly pension.
Voting yes were Controller Krista Rogers, board secretary, Deputy Treasurer Carol Johnston and Commissioner Rick Mirabito. Commissioners Jack McKernan and Tony Mussare voted against.
To be “flat limited” means that the 2 percent increase is across the board, including those retirees whose monthly pensions are still decided by a “convoluted calculation” that the state did away with about two or so years ago, Rogers said.
“It’s ‘limited’ to make sure that nobody gets reduced,” she said, adding that, even though the law changed, those who retired under that calculation still go by it.
Amortized over a 10-year period, the increase adds about $121,282 to the retirement fund, Rogers said.
The “yes” votes were made for several reasons.
“If we’re giving employees cost of living increases, I can’t justify in my mind why we wouldn’t give retirees cost of living increases,” Rogers said, adding, “We have a healthy fund, we’re treating it well. We need to treat our retirees well, too.”
“I just feel that it was the fair thing to do,” agreed Treasurer Connie Rupert, whose deputy, Johnston, voted in her absence. “I feel that we are really managing and maintaining the funds well and we can afford that.”
Additionally, approving these adjustments may help keep retirees off of public programs that people with fixed incomes sometimes feel forced to fall back on, Mirabito suggested.
“We’ve looked at a number of different sources that show the cost of living is going up,” he said, adding the cost of living index is projected to be up by 2.5 percent in 2019. “It’s more economical to keep people self-sufficient in their homes, paying their own way. These are people who worked, they’ve contributed.”
Mussare and McKernan say the county’s job is to ensure retirees are “guaranteed a pension, not necessarily pension increases,” Mussare said. They want to keep the fund healthy, but don’t want taxpayers to be further burdened should something happen to disturb the market or should inflation continue to rise.
“We gave them an increase last year,” he said. “The taxpayers have been contributing about $2 million per year for the past five years.”
“I don’t think inflation is that high to warrant it, especially two years in a row,” McKernan added.
From 2009 through 2018, there were six cost of living adjustments granted, meaning three out of nine years saw no change in pensions based on the cost of living.
Thursday’s approved adjustment will be retroactive for the month of January.
The issue is likely to come up again at the end of the year for 2020.
“By law, we only have to review it every three years,” Rogers said. “However, historically, we tend to visit it every year.”