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Carbon pension funding decision pays off

Carbon County officials made a decision a few years ago that is paying off today.

The county retirement board Thursday discussed pension benefits and an action that the state made over a decade ago that is causing major headaches for school districts, state agencies and some counties.Robert Crampsie, county controller and secretary to the board, said that in 2001, state legislators increased pension benefits for themselves 50 percent and other state pension members, including public schools, by 25 percent.Crampsie said the legislators created a huge liability with the change. The increase was not just for that year moving forward, but also retroactive to the date the person was hired."They increased the liability, and after that point, when it came time to fund it, they weren't funding it properly. They weren't putting in the annual required contributions like we have been," he said.Carbon County also had the opportunity to make the same move a few years later and chose not to, even though some employees were urging the board to do so, Crampsie said.Commissioners William O'Gurek and Wayne Nothstein, chairman, who were both on the board at that time, said they remember making the decision not to increase the pension liability because it would affect the taxpayers down the road."We knew the cost was going to be brutal," O'Gurek said.If Carbon would have opted for the increase, it would have moved the determination factor from the 60th class to the 40th, meaning that an employee who worked 30 years at the 60th class would have a pension at half of their annual salary. Moving to the 40th would increase that pension to 75 percent of the annual salary, retroactive to the date the person was hired.Crampsie said if the county would have increased the pension benefits at that time, it would have created an even larger liability than the county already has and put a burden on the taxpayers.He commended the board for funding the pension plan annually."My point is we, as the Carbon County Retirement Board, sort of got it, but yet in Harrisburg in 2001, they didn't get it and now I don't really think they know what to do about the system," he said. "All I know is it's going to impact the taxpayers in a big way and we all know what school taxes are today."Crampsie referenced a Times News article that quoted Tamaqua School Board President Larry Wittig saying, "The pension costs are increasing to the point where it's just not sustainable. There's not enough money in Pennsylvania to fund the systems. By 2018, there will be 500 bankrupt districts in the state."Wittig used Tamaqua as an example during that meeting, saying that about half of Tamaqua's approximately $27 million budget is payroll-related. Of that, $4.1 million is pension funding. Next fiscal year, that pension cost will be 16 percent of the budget; in 2016, it will be 21 percent; and in 2017, it will be 30 percent of the salary cost going to the pension fund."I think it's unfortunate because it really doesn't have to be that way," Crampsie said, adding that one county chose to increase the pension benefit and had to float a bond to pay for it."We would like to give every retiree a rise," O'Gurek said. "But we make decisions on what is best for the county. I don't know what schools are going to do three or four years from now when they have to make huge contributions. They just don't have the money."