Archived Story

Retracting purchase of service credit dies in committee

Published 9:16am Monday, December 7, 2009

Dowagiac Daily News

CASSOPOLIS – An ad hoc Cass County Board of Commissioners committee Thursday night discussed “disapproving” the Cass County Purchase of Service Credit Policy the Board of Commissioners adopted Aug. 14, 1997, but decided against recommending that to the full board.

Cass County belongs to MERS, the Municipal Employees Retirement System of Michigan.
MERS has adopted rules and procedures to permit employees to purchase governmental, military and generic service credit to enhance their retirement benefits.

Cass County will allow employees to purchase governmental, military and generic service credit provided the purchase is approved by vote of the Board of Commissioners and the employee pays the full actuarial cost of the service credit as determined by MERS, states the Board of Commissioners policy.

“That board allowed it,” County Administrator Terry Proctor said, “but this board, by a clear majority, wants to get this out of union contracts, which I don’t think is going to be easy to do.”

Chair Minnie Warren asked how long employees have to purchase such credit.

“Any year of their employment,” Proctor answered, but added, “They need to do it as soon in their career as possible because the time between the early part of their career and retirement is very long. The cost of buying it at the beginning is very cheap because the money will earn tons of interest over 30 years. If you try to do this when you have three years left, it’s prohibitively expensive. I know every one of these I’ve brought the last two years has given the board heartburn. A majority of the board is not in favor of this, even though the employee pays the full cost.”

Proctor acknowledged that commission opposition revolves around “the small risk that the investments of MERS will be so bad between now and when that employee retires, it may cost the county a little money. Or, it can go the other way. I look at the actuarial studies. I think they’re done conservatively and I’m a born optimist, but this is a board policy decision where majority rules.”

Warren, D-Pokagon Township, polled the committee about limiting the time for purchase, say the first five years.

“In my opinion,” Proctor replied, “the unions will never settle a contract with this because your situations change over time. You may not have the money in the first five years of your career to buy service time. But in the sixth year your grandmother dies, you get a bequest and decide to buy the five years that you can because you got the money from some other source. Or, the kids are no longer in college and you can invest your money in this.”

“I’d hate to take it away from non-union employees if we can’t get it away from the union,” said Commissioner Debbie Johnson, D-Niles.

“You’re not going to get it away from the union,” Warren said.

“If I was in the union, I’d take this over a raise, looking down the road.”

“Young people don’t do that,” added Commissioner Carl Higley Sr., R-Edwardsburg.
During the Dec. 3 meeting Proctor thanked commissioners for meeting with elected officials, department heads and judges three nights in November.

“The board sent a positive message that you are interested in what those people do for the citizens of the county. Another message that you sent was that you’re willing to listen to their opinions and ideas.”

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