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 $11.4 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. The ARC is an element of the county’s budget required to support the legally mandated employees’ retirement fund.

Investments and interest income through the first quarter of 2012 added more than $900,000 to the fund’s balance, Davidek pointed out. 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 grown at a healthy rate of 16.4 percent over the past three years, 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 6.9 percent annually since 2001, ratcheting closer to that 7.5 percent goal. “For the 10-year period that ended on Dec. 31, 2010, Potter County had the best performance of any county retirement fund in state,” Davidek said. “One thing that really helped the county was the discipline of your fiscal management and the commitments to make contributions, even when it might have been hard to do so. Those who did not put money into their funds did not have that money to go to work for them when the market recovered.”

C. S. McKee is continuing to aggressively invest in technology companies and the firm’s experienced panel of analysts is closely monitoring developments around the world to adjust international investments, which are heavily weighted toward Japan and the United Kingdom.