Jun 12, 2014 3 min read

Washington County was notified this week by its consultant in Philadelphia that the annual required contribution to the county employees’ pension fund is $3,799,410.

About 58 percent, or $2,162,845, will be paid by county property tax dollars. Washington County’s millage has stood at 24.9 since 2010.

The rest is reimbursed by state and federal tax dollars.

Washington County Commission Chairman Larry Maggi noted this is about $200,000 below the amount estimated in the county’s 2014 budget. Increased value of county pension investments during last year’s rising stock market, earning a 19.69 percent return, accounted for the difference.

The market value of the pension plan at the close of 2013 was $134,533,046, and the figure reflects a trend that has continued so far this year.

This year’s contribution is $260,107 lower than in 2013, when it reached a peak of $4,059,517. Investments during the stock market’s high-tech bubble in the late 1990s and earliest years of the 21st century financed the county pension plan without reimbursement from county taxpayers.

“We’re pleased that it’s going down in the right direction,” said Maggi. Of the annual required contribution to the pension fund, he said, “Unfortunately, it’s required by the state. We’re doing the best we can to do it properly in the most efficient manner. There’s no way of knowing until those numbers come out, and we were pleasantly surprised.”

County employees have 7 percent of their salaries withheld from their paychecks as a pension contribution.

“It’s not unusual for the employer to make a contribution to the pension system,” said Scott Fergus, Washington County director of administration. “Under state law, we are required to do this. The county has been fiscally responsible in realizing it’s an obligation we have every year.”

The County Pension Law, Act 96 of 1971, governs the establishment and operation of a retirement system for employees in each of the state’s 67 counties and requires a defined benefit plan. The vast majority of Washington County retirees are making less than $40,000 in annual pensions.

Meanwhile, the Associated Press reported this week from Harrisburg that Gov. Tom Corbett said he won’t consider a tax increase to help fill the state’s growing budget gap unless the Legislature agrees to overhaul Pennsylvania’s pension system for future state and school employees.

The new fiscal year begins July 1.

The proposal Corbett supports would combine a limited traditional, defined-benefit pension with a 401(k)-style defined-contribution plan that would provide a smaller benefit than employees get under the present system.

It would not affect the hundreds of thousands of current state and public school employees.