County takes step to stanch pension fund bleeding

For the first time in 43 years, a retirement plan that covers county employees and other government workers is reducing benefits and increasing contribution amounts.

The 2008 stock market crash, combined with increased payouts, prompted the changes, said Howard Miller, executive director of the El Paso County Retirement Plan.

The plan, which  covers 3,667 people,  includes not only past and current county workers, but also employees in the 4th Judicial District, the Pike’s Peak Library District, the El Paso County Health District and the El Paso County Retirement Plan, which is a stand-alone government entity.

If the changes were not implemented, the plan could be looking at a $625 million deficit in 20 years, Miller said. “This is a good thing. Instead of sitting on their hands, the board is taking action before a problem emerges,” he added.

The retirement plan currently has assets totaling about $232 million. The plan lost about $85 million between 2008 and 2009, but has recouped $24 million of those losses.

Beginning in 2010, the employees and employers will see their contributions increase from 6 percent to 6.5 percent. In 2011, the contribution will be 7 percent and from 2012 onward, the contributions will be 7.5 percent. These increases will add $148 million to the retirement plan over the next 20 years.

The board has also tinkered with other aspects of the plan. For example, workers will not be vested and eligible for a lifetime benefit until they have been employed  for five years and a formula which determines monthly pensions has been changed for people hired in 2010 or later.

The good news is that the board has not set an age at which a person can begin collecting full benefits. So, for example, if someone went to work at the county at age 18 and put in 30 years of service, they would be eligible to draw their full pension when they were 48 years old.

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Call the writer at 476-4825.