CLARION, Pa. (EYT) — The Clarion County Retirement Board voted on Wednesday morning to decrease the amount of interest paid on employee contributions from 5.5 percent to 4 percent.

Employees have the option to withdraw their contributions and interest when they retire or leave employment and “park” their contributions.  Another portion of the pension plan provides a defined term pension to those vested.

Voting for the rate adjustment, the first that has been done in a long time, were retirement board members Clarion County Commissioners Ted Tharan, Wayne Brosius, and Ed Heasley and Chief Clerk Carol Clinger.

Treasurer Tom McConnell was the lone vote against the interest cut on the five-person board.

The Clarion County Employee Retirement Plan is governed by the “County Pension Law,” Act 96 of 1971, as amended, and governs the operation of the retirement system for Clarion County Employees.

The money employees contribute to the pension plan receives interest for the entire time the money is in the fund up to the time of retirement, death, or withdrawal.  Each year the Retirement Board must determine prior to January 31 the rate of interest to be credited to employee retirement accounts for that year.  The rate of interest must be within the range of 4 percent to 5.5 percent.

“The decision was based on the information and recommendation provided to the county by Korn Ferry-Hay Group (Clarion County Retirement Plan Actuaries) as well as a third party firm providing a quote,” stated a press release distributed at the meeting.

“Reducing the rate to four percent is still well above the rates available in the marketplace.”

“The economic advantage of this change to the retirement plan is that the normal increase in plan liabilities will be decreased by approximately $100,000.00 per year.  For example, if the 4 percent rate were in effect for ten years, then the Plan’s unfunded liabilities would be reduced by approximately $1 million versus the 5.5 percent crediting rate.  In addition, the Annual Required Contribution will decrease by approximately $11,000.00 for the next 15 years for one-year change in the crediting interest rate.  If the county kept this rate in place for two years, the savings would equal approximately $22,000.00 and on.”

Heasley said that the reduction will not have an impact on the define term portion of the plan. 

Tharan said he wanted to make sure the plan is solvent for many years, and there when retirees need it.

“The retirement board has taken this proactive measure to ensure strength and solvency of the retirement fund both now and in the future,” stated the release.  “Ultimately, this will benefit all county employees, both retired and active while efficiently using the taxpayer funds with which we have been entrusted.”

Acceding to the retirement status report as of October 31, 2016, there are 186 total active members contributing, 171 total retirees on pension, and the Retirement Fund Portfolio totals $21,890,098.00.