Auditor finds some Macon-Bibb retirees shorted in pension calculations
Local government retirees and survivors could be getting shortchanged when it comes to pension payments.
Over the past few months, auditor Stephanie Jones has warned Macon-Bibb County pension and retirement board members of miscalculations in benefits that could total hundreds of thousands of dollars, but the scope is not yet fully known.
“There were some calculations not done correctly,” Jones told board members last month.
Jones explained that the software for the actuarial calculations, or the projections used to determine the amount of benefit, was likely not updated since 2012.
Veteran human resources director Ben Hubbard retired at the end of last year.
“We were not referencing the correct table,” said Jones, based on a sampling she did. “HR is not aware of how far back that goes. We were not able to get Mr. Hubbard’s laptop for IT to look at the software the actuary provided and determine what was the last update that was done for the mortuary table, the actuarial factors.”
Jones first shared her findings in late spring and Mayor Robert Reichert’s administration has been trying to sort it out ever since.
Friday, public affairs spokesman Chris Floore answered a Center for Collaborative Journalism email inquiry by stating that County Manager Keith Moffett and the human resources department “are reviewing information provided against previous records and contracts to determine if anything was done in error and what would, if anything, need to be done moving forward.”
Because of the ongoing probe, no one was currently available to answer questions about the matter, he said.
“Since it involves pension and benefits, they won’t be able to discuss it without a full understanding so people can get a clear picture,” Floore replied Friday.
Jones has been trying to get answers and trace the duration of the suspected miscalculations.
“I have a challenge sometimes getting documents,” Jones told board members. “Takes two months to get 23 files. … If I’m asking for documents for everyone getting a payment since consolidation… this will go on for a couple of months.”
Those personnel files are not digitized and need to be pulled by hand from county storage, she said.
The apparent glitch only affects those who chose something other than the normal benefit, such as a retiree specifying the amount of survivor benefits.
To further complicate matters, there are multiple pension plans that date back before Macon and Bibb County consolidated in 2014. There are also dozens of former employees who took an early-out option post consolidation as the county was working to meet the budget reduction mandate.
Retired Macon-Bibb County firefighter Danny Angelo chairs the Fire and Police Pension Board and believes about a tenth of those public safety retirees in that fund will be affected. He is concerned that time is running out to make corrections as Reichert’s administration ends this year.
“I’m very concerned with police and fire that we’ve had 10 percent in miscalculations and I do think it’s the fair and right thing to do to make it right with everybody and continue on the right path in the future,” Angelo said Thursday. “If we have mistakes, we should do the moral and right thing and correct the mistakes now that we’re aware of it and fix it.”
Not only is there an issue with non-standard benefits, but Jones said the base factor multiplier was changed in 2008 or 2009 from .014 to .0152. She recommends a change in the ordinance to specify that the larger multiplier does not apply to workers who left the city prior to the change. Further investigation is needed to determine if there were miscalculations concerning the multiplier for those who began collecting benefits in recent years.
Senior Assistant County Attorney Michael McNeill recently brought in outside counsel specializing in pensions to aid in the assessment.
“I don’t know there’s a legal liability except that the people are entitled to the benefits they’re entitled to,” McNeill told board members in the spring.
Angelo expects the picture to be clearer once the audit is finalized.
Macon retiree Harold Wilson, who chairs the Division A Macon-Bibb County Pension and Retirement System board, worried about the economic impact on the fund if the county compensates retirees for any shortcomings.
“Not knowing how many people are affected, we would not know the economic impact,” Jones responded in July. She indicated the funds should be able to absorb the recalculation without major consequence.
Wilson said he also was “concerned about the tax consequence for retirees for additional monies paid to them in a lump sum.”
The audit won’t likely be finalized for several weeks and Jones said the administration does not have to accept her recommendations.
Commissioner Larry Schlesinger, who sits on two of the pension and retirement boards, favors paying retirees whatever they are due.
“I just think this is not something we can just sweep under the carpet,” Schlesinger said. “I think we have to make good on what we initially promised because the mistake seems to be ours.”
Contact Civic Reporting Senior Fellow Liz Fabian at 478-301-2976 or [email protected].