Bellevue says no to new actuary

Bellevue Mayor Paul Cusick broke a tie vote among Bellevue Council members Tuesday night to reject a proposal to hire an independent actuary to review the borough’s pension plans.

Although council voted in December to hire a new actuary, according to council member Linda Woshner, Tuesday’s vote on the matter came to a 4-4 tie, with Woshner, Jim Scisciani, Vence Menosky and Lynn Tennant Heffley in favor, and opposition from Kathy Coder, Matt Senvisky, Mark Helbling and Henry Lenard.

In 2011, Bellevue switched firms handling the investment management of the borough’s pension plans. That was also when the non-uniform plan was divided to create a separate pension plan for the paid firefighters. Police officers already had a separate plan.

The new plan management company reportedly contracts with an outside actuarial firm to study the plans. In just the last three years, however, Woshner said, there have been changes in the level of funding of the plans that are troubling.

“We’ve got some real problems,” she told council at the regular meeting on Tuesday.

In particular, she said, in just three years the level of funding has changed so that the firefighters’ plan is actually underfunded, at only 80 percent funding, while the non-uniform plan is over-funded, at 140 percent.

An actuarial study helps municipalities determine how pension plans should be funded by predicting what contributions will be needed in the future, based on benefits, employee data, etc. Woshner questioned the relationship between the investment manager and the actuarial firm, and whether it affected what data was used in the analysis.

“I just don’t think we’re getting an unbiased actuarial report,” she said.

Until the management change three years ago, Bellevue had always used a completely independent actuary to keep tabs on the borough’s pension plans.

There was some question, however, as to whether the borough would have to shoulder the estimated $10,000 cost of bringing in a new actuarial firm. Borough manager Ron Borczyk said that the investment manager had refused to decrease that company’s fees even if Bellevue rejected the actuarial report supplied by the manager’s contractor. Actuarial fees normally are paid by the pension plans rather than the municipality’s general fund, Borczyk and Woshner said.

Coder argued that the borough already was getting an independent actuarial report without spending any more money.

In voting “no” to break the tie vote on a motion to hire a local actuarial firm, Cusick told Woshner that she should change the investment manager if she had concerns.

That could be problematic, however, as Woshner is not a member of the pension committee as defined by ordinance. Of the borough’s elected officials, that committee includes only the council president and the finance committee chair, positions held by helbling and Coder, respectively.

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