Reprinted from The Trumbull Times © Copyright 2009
September 17, 2009

By Donald Eng

A large one-time contribution and increased annual funding were the two main points of a proposal by Timothy Herbst to reduce the underfunding problem in the town's employee pension plan.

At a Monday press conference, the Republican candidate for first selectman outlined the plan. He said Board of Finance members Bill Crooks and Mark Smith assisted in some of the details.

"I am proposing on a permanent basis that we apply 25% of the surplu revenues and surplus expenditures for each year to reduce the pension fund liability," he said.

He also pledged to apply 25% of an anticipated $1 million in operational savings that he has said he would identify in his first 100 days in office, should he win election in November.

Other highlights of the proposal included increased operational efficiencies and job consolidation, using retirement attrition to reduce town employees and increasing the budgeted amount of pension fund contributions by 15% each year.

First Selectman Raymond Baldwin, in his 2009 State of the Town Address, had referred to the pension fund as one of the last unmet challenges the town faces. Baldwin has unveiled his own plan to reduce the pension fund's shortfall, which included a recommendation to allocate the entire $1 million surplus from the 2008-09 fiscal year to the fund.

The large surplus was primarily the result of an unusually high tax collection rate and an unusually warm winter, which kept fuel costs well below budget. Baldwin also has proposed allocating 50% of future Grand List growth funds to the pension fund.

The pension fund shortfall is a mathematical equation that calculates what it would cost the town in the hypothetical situation that every employee retired when they became eligible for a pension. Such a situation is purely theoretical since long-term employees typically stay in their jobs long past their eligibility dates.

This year, the town allocated $2.025 million to the fund, an increase of $200,000 over last year. The added funding and slightly better investment performance means the fund is now about 38% funded, an improvement over last year's 28%.

Herbst said his plan was superior because it contained more specific fund allocations.

"The problem with using Grand List increases to fund the pension is that the figure is entirely unreliable and fluctuates based on factors outside of the town's control," he said. "Our proposal is more plausible in that surplus revenues are within the control of those that have a direct hand in creating, adopting and implementing our annual budget."