The fund that El Paso County workers rely on for retirement benefits had a good year in 2012, but it's still trying to climb out of the bog it fell into due to the 2008 recession.
In a newsletter to members, the El Paso County Retirement Plan reports assets increased by $27 million last year to $280.1 million, a return of 12.5 percent. The rise stemmed from improved market conditions.
But it will take years to recover from the $105 million loss suffered in 2008 when markets dropped amid the recession brought on by the housing crisis.
That's not the only problem. The fund reports that benefit liabilities continue to grow, causing the funding ratio to decline from 91 percent to 67 percent since 2008. Funding ratio reflects how much the fund has compared to how much it owes in benefits to members.
"We've made progress in leaving the 2008 financial crisis behind us, but we're not out of it yet," the newsletter reports.
To assure benefits will be available when employees are entitled to them, several rules have been changed. For one, employees hired after Dec. 31, 2012, will have to work longer to become eligible for benefits, and the maximum benefit was lowered from 75 percent of final average monthly pay to 60 percent starting this year.
But more changes would need to happen for the fund to pay off as promised to all its members. The annual required contribution from the county and employees must be 18.9 percent of payroll to make ends meet, but it's only 15 percent. Such a gap has existed for years and will contribute to the decline in the plan's funding ratio if something isn't done.
"In the years to come," the newsletter says, "additional changes will likely be required to help ensure that these benefits are sustainable for all future members." Those changes could include increasing retirement eligibility requirements, including a minimum retirement age, and decreases to the amount paid to retirees.
The fund also provides benefits to 3,963 current and retired employees of the county, Pikes Peak Library District, El Paso County Health, 4th Judicial District Attorney's Office and retirement plan, the plan's executive director Tom Pfeifle says.
He says the plan will assess the most recent actuarial data before deciding whether to seek any change in employee and employer contributions.