Westmoreland pension fund reported in good shape
Westmoreland County’s pension fund lost more than $45 million in 2018 and for the first time in five years has been designated at a minimum distressed level.
The account, which provides benefits to about 1,300 government retirees, has more than $415 million in assets after its value dipped by nearly 6 percent last year. It is funded at 87 percent of its liabilities, according to reports made public this week.
“We aren’t concerned, but it is expected to bounce back up,” Westmoreland County Commissioner Gina Cerilli said. “The pension fund is one of the things we’re most proud of.”
County workers are required to pay at least 9 percent of their salaries into the fund. The county also makes annual payments, including allocating $9.3 million last year. It is expected to make a payment of $8.9 million this year.
The fund paid out about $31.5 million in benefits to retirees last year.
It reached an all-time high of nearly $459 million at the end of 2017. Fluctuations in the stock market, especially over the last quarter of 2018, were responsible for the loss of value, according to Controller Jeffery Balzer.
The county’s retirement board, which consists of the three county commissioners, Balzer and Treasurer Jared Squires, oversees 19 private financial firms that manage the fund’s investments. The board Tuesday fired one firm, Standard Life, for under performance and personnel changes, Balzer said. The company, which managed $5.6 million of the portfolio, saw its losses hit 5 percent for the year.
Fund managers are still attempting to sell off $15 million in risky life settlement investments, a strategy that has lost money for the county in the last several years. Officials voted in 2016 to drop that portion of the fund, which buys life insurance policies from private citizens. The value of those funds dropped 8 percent last year.
Overall, the pension fund is still considered to be in good shape. Since 2013, it had been funded at more than 90 percent, meaning it had enough cash on hand to pay out all but 10 percent of its potential liabilities.
A statewide review of municipal pensions conducted in 2015 by Auditor General Eugene DePasquale found nearly half of Pennsylvania’s more than 1,200 municipal retirement accounts were distressed, funded at less than 90 percent.
That report found 438 municipal pension accounts were minimally distressed, a designation for accounts funded between 70 percent to 89 percent of their liabilities. DePasquale reported 22 municipalities, including Pittsburgh and several other smaller municipalities in Western Pennsylvania, had “severely distressed” pension accounts funded at less than 50 percent.
Westmoreland’s account was funded at more than 100 percent in 2008, when it listed more than $321 million in assets. That year’s economic downturn resulted in substantial losses to its value. Even with the most recent losses from last year, the fund has grown by more than 40 percent in the last decade.
“It’s like the ocean. It goes up, and it goes down,” Balzer said. “We have a really strong pension fund.”
Rich Cholodofsky is a Tribune-Review staff writer. You can contact Rich at 724-830-6293 or [email protected]
Rich Cholodofsky is a Tribune-Review staff writer. You can contact Rich at 724-830-6293, [email protected] or via Twitter .