Auditor general cites concerns with retired non-uniformed pension plan in McCandless; police pension fund 90% funded

The auditor general in a report analyzing local pension plans highlighted concerns about the retired non-uniformed pension plan in McCandless, though those concerns do not extend to the active non-uniformed pension or police pension plans.

Auditor General Timothy DeFoor released reports for McCandless on May 9, along with more than 30 other municipal pension plans around the commonwealth.

“Our audits make sure state pension aid is used as required by law and that helps to reduce financial burdens on local taxpayers,” he said in a statement.

DeFoor said he was “extremely concerned about the funded status” of the plan for retired non-uniformed McCandless workers, which was funded at 33.9% as of January 2019, which was the most recent data available.

That’s a drop from being 54.8% funded in 2015, and 44.4% funded in 2017, per the auditor general’s report.

“We encourage town officials to monitor the funding of the retired non-uniform pension plan to ensure long-term financial stability,” DeFoor wrote in his report.

The McCandless town manager did not immediately return requests for comment on the reports.

As of December 2020, the plan had two retirees receiving pension benefits.

DeFoor did not, however, express any concerns regarding the active non-uniformed pension plan in his report.

The plan in 2020 received $131,293 in state aid and $15,962 in employee contributions. Employee contributions to the fund are steadily dropping — that number was more than $129,000 in 2015 and has been dropping since, to under $60,000 in 2019 — while the amount of state aid is increasing, up from about $77,000 the year prior.

The plan had 41 active members as of December 2020. Administrative employees on the plan are required to contribute 5% of their base pay, while public works employees have to contribute 6%. The municipality contributes the same amounts.

State aid for municipal pension plans is generated through a 2% tax on fire and casualty insurance policies sold in the commonwealth by out-of-state companies. In 2021, the Department of the Auditor General distributed $317 million in aid across 1,492 municipalities and regional departments. The money supports pension plans covering police officers, paid firefighters and non-uniformed employees.

The pension plan for McCandless police officers is funded at 90.6% as of January 2019. It had been funded at 98.6% in January 2017.