Thecitizen.com reports that a defined benefit pension plan was approved Thursday by the Fayette County Commission on a 3-1-1 vote. The approval came after several residents urged the commission to vote the plan down over concerns the plan will ultimately be more costly further down the road, the news report said.
Supporters of the Fayette County proposal contend its plan will avoid problems with cost and funding (see GA County Considers DB Offering ). Employees are required to pay 2.5% of their salary into the plan along with the county’s 3.8%, a provision cited for saving the county roughly $500,000 a year, according to the news report.
The plan was also designed so that if the county’s contribution exceeds 4% of all salary for a given year, the county will shrink the amount of funds it contributes to employees’ 401(a) and 457 retirement plans to cover the difference. However, Thecitizen.com says financial planner Pat Hinchey challenged that idea, saying attorneys would take action for employees to insure the county pays the additional costs instead of employees.
Commission Chairman Jack Smith said the county has endeavored to put “as many safeguards in the plan” as possible, but he acknowledged there is inherent risk. He contended that the benefits of offering the plan far outweigh the risks.