County Employees’ Retirement Fund At All-Time High

An investment manager brought good news to members of the Potter County Retirement Board this week. Jeff Davidek, a vice president with the firm C. S. McKee, said the county employees’ retirement fund now stands at nearly $10.7 million, an all-time high. If these trends continue — and there are promising signs that they will — the county will finally see a reduction in its annual required contribution (ARC) and the fund may be healthy enough to yield a long-awaited benefit increase to dozens of retirees.

Investments through the first quarter of 2011 added more than $400,000 to the fund’s balance, Davidek pointed out, with strong returns from the energy and technology sectors. He cautioned board members to view the retirement fund with a long-range perspective. In order to reduce the county’s ARC and allow for an increase in benefits, Davidek said, the fund must meet an actuarial target of 7.5 percent in annual earnings. When the U.S. economy tanked in 2008 and the first quarter of 2009, the retirement fund lost significant value. It has fully recovered from the recession and grew at a healthy rate of 9.6 percent over the past 12 months, but still has not met the 7.5-percent annual growth target in the long term, Davidek said. Overall, the fund’s value has grown at 6.8 percent annually since 2001, ratcheting closer to that 7.5 percent goal.

Board members did vote 5-0 to authorize C.S. McKee to transfer up to five percent of the fund’s balance to small-capitalization stocks. Davidek recommended the shift, citing his team’s assessment of economic trends and forecasts for renewed growth by certain smaller and mid-sized businesses. Board members are Paul Heimel, Susan Kefover, Kathleen Majot, Krista Miller and Doug Morley.