12 hours ago
Thursday, October 06, 2005
Pension fund blues
The Luzerne County pension fund will have another big hole to fill this year. From the TL:
It's looking like taxpayers will again be forced to pay about $7 million to shore up Luzerne County's employee pension fund next year. Luzerne County Controller Steve Flood announced the estimate during Wednesday's budget hearings.
Luzerne County's fund did not require subsidies from 1991 through 2000 when healthy investment returns more than covered payouts to present and future retirees. But the fund dipped from a high of $203 million in 2000 to around $142 million in 2002.
The fund required $313,600 from the county in 2002, $5.3 million in 2003, $6.6 million in 2004 and $7.8 million in 2005.
Commissioners Chairman Greg Skrepenak blames a bad stock market but others point the finger at the previous Commissioners for paying too much in fees to money managers who made poor investment decisions. He also took a shot at the lawsuit against past commissioners and money managers that is trying to recoup some of the losses. I may actually be with Skrep on this one as the county has already spent $3 million from the pension fund on legal fees. Plus they are using the Racketeer Influenced and Corrupt Organizations (RICO) Act to persue recovery of the losses. The purpose of RICO was to eliminate the ill-affects of organized crime on the nation's economy. RICO was intended to destroy the Mafia not to settle political scores. Because of it's wide misuse the courts have been trying to restrict it's scope so now RICO has become one of the most complicated and unpredictable areas of the law.
I like Steve Flood and think he has been a very good controller but this lawsuit may drag on for years with very little benefit after all the lawyers are paid. I will miss him, Steve was good at asking questions and just saying no. The way this county has been run I found him to be one of the few willing to rock the boat. There are some that can't wait until he is out their hair.
Skrepenak asked county Budget/Finance Chief Sam Diaz to keep the controller's office budget flexible in case the newly elected controller wants to make any changes. Flood said during the hearing that his replacement will be Republican Erik Knappman. He still harbors resentment against Democrat Maryanne Petrilla, who beat him in the 2005 Primary.
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