Westmoreland retirees raises to cost $6.7 million in 2023

More than 1,400 retired Westmoreland County government employees are getting raises.

Westmoreland’s retirement board on Tuesday approved an 8.1% cost-of-living increases for those who receive a county pension.

“We try to be current with the cost of living, and that’s what it is,” said Westmoreland County Controller Jeffrey Balzer, who chairs the county’s retirement board that also includes the three county commissioners and Treasurer Jared Squires. “We’re just keeping up with inflation and keeping their heads above water. We’re just doing what we can do.”

The cost-of-living raise was based on a pre-determined formula that uses inflation rates and the consumer price index, officials said.

The county’s elected officials are scheduled to receive a 7.8% cost-of-living raise in 2023 that is also based on consumer price index data. Commissioners last week approved similar raises for nearly 400 nonunion county employees.

The pension raises will cost taxpayers an additional $6.7 million in 2023, according to county finance director Meghan McCandless. The additional benefits will be amortized over five years and will total about $33.2 million, she said.

The 2023 costs were included in the county’s $420 million budget commissioners approved last week, which earmarked an additional $2.5 million to cover payments into the retirement fund.

Commissioners last summer borrowed $126 million to bolster the county’s retirement fund as part of a plan to ensure the pension is fully funded and to limit future contributions.

County officials paid $12.7 million in 2020 to ensure the retirement plan was fully funded.

Last year’s borrowing was designed to limit future allocations and provide cost certainty for about 20 years.

McCandless said the borrowing plan enacted last year is still expected to save the county money.

“Without the pension obligation bond, the general fund’s contribution would have been approximately $8.7 million more than what it will be with the 2021 bond proceeds,” McCandless said.

Meanwhile, the volatile stock market has impacted the fund’s value.

The retirement fund reached a high-water mark of more than $670 million last summer after the borrowing. According to the most recent financial report posted to the county’s website, the fund lost $40 million during the first quarter of 2022 and was valued at $638 million.

The controller’s office reported losses continued throughout the summer and that as of the end of September the retirement fund had a value of $530 million.