The Daily Globe - Serving Gogebic, Iron and Ontonagon Counties

Adams offers solution to pension liability issue

 

December 12, 2015



BESSEMER — In his final appearance before the Gogebic County Board of Commissioners on Wednesday, county prosecutor Richard Adams offered a solution to a pension liability problem.

Gogebic County was the fiscal agent for the Western Upper Peninsula Manpower Consortium, which was also made up of five other counties.

For 40 years, the consortium served the six counties, but it was disbanded and a new consortium was formed that now serves the entire U.P.

Now, the WUP Manpower Consortium pension fund is underfunded by $411,000. The pension plan has been advised “to bring this up to snuff,” it needs $102,817 contributions for each of the next four years, Adams said.

Gogebic County tried to address the unfunded pension liability by refusing to sign the new U.P.-wide consortium agreement unless the issue was addressed. “We ended up blinking when the state refused to address the issue, stating that federal grant funds could not be used to cover this liability, as the state had no active employees,” Adams wrote, saying it “...smacks of bureaucratic maneuvering and BS.”

Adams told county board members that it’s only fair that all of the counties address the issue by sharing in the pension costs for seven former employees.

He recommends the counties pay 80 percent of the $102,817, under the following schedule: Baraga, $7,896; Gogebic, $17,438; Houghton, $34,218; Iron, $12,420; Keweenaw, $1,974, and Ontonagon, $8,308.

Adams recommended if the matter can’t be resolved among the counties, Gogebic County could file for a declaratory judgement in circuit court and a judge would decide how the underfunded amount should be addressed.

During the Wednesday discussion, Adams noted the state’s pension fund is only at 46 percent, far worse than the county’s, and much below the 80 percent.

Whoever is appointed Gogebic County Prosecuting Attorney to take Adams’ place will be able to discuss approaches to handling the issue, said Adams, who is retiring effective Sunday.

The new prosecutor will be appointed by the Gogebic County Circuit Court Judge, not Gov. Rick Snyder, as the Globe previously reported.

County board members Tom Laabs and Jim Oliver, both of Ironwood, said Adams’ solution looks like a good plan and the board agreed to proceed with seeking to split the costs with the other counties.

The pensions for the seven employees are separate from the county’s retirement account. Oliver later noted the county’s retirement account has built up to $43 million.

 
 

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