After postponing the decision with a tiebreaker vote two weeks earlier, the Bulloch County commissioners Tuesday evening quickly, quietly and unanimously approved creating a new pension plan for county employees.

The county government already had a retirement system for its 300 or so employees, administered by ACCG Retirement Services, an arm of the Association County Commissioners of Georgia. But it consists mainly of a 401(a) defined contribution retirement savings program. The new plan is an actual pension, guaranteeing a set monthly benefit amount to retirees.

“I think it says a lot,” Capt. Marcus Nesmith of the Bulloch County Sheriff’s Office said outside after the vote.

He chaired a study group of about a dozen employees from various departments who began meeting 13 months ago to consider options for a shift to a pension system. The committee usually met twice a month and worked with an ACCG Retirement representative.

Many of the employees “were getting close to retirement, and with the retirement system that we have now, they were going to have to stay a little longer because the market isn’t what it was several years ago,” Nesmith said. “So with a pension, there’s a defined benefit. They’ll know what they get when they retire, and they’ll get that for the rest of their life.”

Lasting obligation

However, the plan shifts some of the uncertainty to the county government, since the fixed benefits become a lasting financial obligation, a liability, that the county cannot easily adjust.

In the most recent cost projections, from early October, the plan is expected to carry an initial liability of almost $22.7 million, but the county will reduce this by transferring assets from the existing 401(a) plan to the new pension program. This requires buy-in by current employees, exchanging their 401(a) savings for years of service credited toward their future monthly benefit amount.

The “assumed” asset transfer was projected as $19 million, leaving an almost $3.7 million “estimated unfunded liability” for the county, to be paid off over 20 years. But this is subject to market trends. A downturn in the stock market already decreased the expected transfer amount, and increased the expected unfunded liability, by a rough estimate of $1 million since the summer.

The county’s projected annual contribution to the program, at 7.4% of salaries, the recommended level, is $1,137,600 at current payroll.

However, the county already budgeted $1.8 million this year for retirement contributions with the previous plans. It currently contributes 6.5% of salaries to the 401(a) accounts and has provided a partial match of employees’ contributions these and to “457” accounts. When the pension is implemented, these contributions will cease, although employees can still contribute to their 457 accounts.

Waiting since August

ACCG Retirement Services originally provided a cost analysis for several options.

During a joint work session with the study committee Aug. 3, some of the commissioners expressed a preference for one option, which committee members also found acceptable. This became the outline now adopted, which establishes a normal retirement age of 65, with five years of service to be vested, and a 1.5% “multiplier.” This means that benefits will be determined by multiplying 1.5% of an employee’s average annual pay – from the highest paid five consecutive years of the last 10 – by their total years of service.

In August, County Manager Tom Couch recommended allowing a 60-day “due diligence” period for the staff to sort out the details before commissioners voted.

Couch and Assistant County Manager Cindy Steinmann, Chief Financial Officer Kristie King and Human Resources Director Cindy Mallett completed their due diligence report in early October. Nesmith then presented it to the commissioners during their Oct. 18 regular meeting.

At that time, a motion by Commissioner Ray Mosley to table the question until Nov.  1 was seconded by Commissioner Anthony Simmons and supported by Commissioner Walter Gibson. But Commissioners Jappy Stringer, Timmy Rushing and Curt Deal voted against the motion. This produced a 3-3 tie, which Chairman Roy Thompson broke with vote in favor of delaying action.

Tuesday evening, Thompson simply said a motion and vote on the retirement plan amendment were expected. Simmons made the motion to approve, Rushing seconded, and all six district commissioners raised their hands in favor.

They said nothing more about it then, and most of the county employees who had filled the hallway outside the commission room left the County Annex, followed soon after by those in the back rows.

Out by the steps, Bulloch County EMS Director Doug Vickers said the commissioners had been “very generous” with the previous plan but called the pension “a solid move forward.” He agreed that pensions are becoming an expectation for public safety personnel.

“I’m excited. …,” Vickers said. “Before it was, ‘Take care of yourself.’ Now, you know, it’s a combination of ‘Take care of yourself’ and ‘The county will take care of you.’ It will attract more good employees. Surrounding counties are doing this, and I’m excited about it.”

‘See it if works’

Some of the commissioners had had a change of heart, Thompson said after the meeting.

“It was time to see if it works,” he said. “I know a lot of the employees have wanted it, and you know, it’s easy to say something is not going to work, but I think you need to see if it will work, and I think that was the change of heart, or a change of vote.”

Employees had been surveyed, and a majority supported the switch to a pension, he said.

“Now we’ll find out if it will work or not,” Thompson added. “It’s a gamble. But will it work? Will it help retain employees? I certainly hope so.”

Simmons said he thought “it was good for the workers to be able to decide what they want to do with their retirement plan.”

“A lot of preparation and work went into getting this retirement proposal ready to present,” Gibson said in a statement by phone Wednesday.  “We have a super financial staff that manages programs for some of the greatest employees in the state, so therefore hopefully it will benefit all our employees for years to come.”

Six months yet

The pension plan will not immediately take effect, since it currently exists only in outline.

“We don’t have a new plan structure in place, although fundamentally we do,” Couch said. “But plan documents have to be drawn up, employees have to be educated about their choices, and then there’s a lot of tedious paperwork that has to be done.”

The goal will be to have the process completed in six months or less, and certainly before July 1, the start of the county’s next fiscal year, he said.

Blackout period

A “blackout period” will probably be built into the plan, requiring anyone who is eligible the first day the pension is funded to wait six months before they can retire, Couch said. This is designed to hedge against one concern of the commissioners, that a long-term retention tool could produce a short-term exodus.

“I don’t know if there’s going to be a herd of people that are going to do that right away,” Couch said. “But a lot of us are baby boomers, and local government tends to have a little bit of an older workforce. … It’s hard to say, but I wouldn’t be completely shocked if we had a few folks leave before the end of calendar year 2023.”