Changes to retirement benefits cause for concern among Cass County employees

Published 2:34 pm Friday, September 17, 2021

CASSOPOLIS — Changes to retirement benefits for Cass County employees have been the trending topic at county meetings in recent weeks.

Cass County Administrator Jeff Carmen and the board of commissioners have been working toward a solution that benefits everyone involved.

“Cass County is fortunate to have a group of dedicated employees across everything that affects everyone’s life,” Carmen said. “From medical care, the nursing facility, the obvious law enforcement to the people who handle births, deaths, marriages, divorces and everything in between. We’re proud of our employees, and they are dedicated.”

According to Carmen, the county is transitioning from a defined benefit plan — a plan that provides a specified payment amount in retirement — to a defined-contribution plan — which allows employees and employers, if they choose, to contribute and invest funds over time to save for retirement.

With defined benefit plans, employees have little control over the funds until they are received in retirement, and the employer takes responsibility for both the investment and distribution of funds to the retired employee.

The plan stands in contrast to defined contribution plans, where the employer has no obligation toward the account’s performance after the funds are deposited. Defined contribution plans, the most common of which is a 401(k), require little work, are low risk to the employer, and cost less to administer. The employees are responsible for making the contributions and choosing investments offered by the plan.

“The [defined benefit plan] is pretty much an old model that doesn’t exist anymore in the private sector and increasingly in the public sector,” he said. “[Defined contribution plans] are replacing that model.”

Carmen believes that the DCP will give Cass County employees increased financial flexibility.

“[The DCP] will give more control to the employees, allow them to accumulate more funds, be in charge of it and work with financial investors to plan for the future,” he said. “If you come to work for the county, both yourself and the county contribute money to your plan, and you decide to leave before you vested, we’re advocating plans that would allow you to transport that money and keep it, not keep it from you.”

Carmen said the county is currently in negotiations with two labor unions and has had four union agreements ratified by the professional union agents, the local members and the Board of commissioners.

“It’s a work in progress,” Carmen said. “We are not adversaries. We are absolutely not trying to take anything away, and we do not view negotiations as ‘someone has to win and someone has to lose.’ We want everyone to win, and we have made great investments in technology that would help in law enforcement and country operations.”

The county hopes the new agreements will help eliminate the unfunded accrued liability — debts that do not have the necessary funding — in its retirement system. According to county MERS documents, Cass County has experienced a 27-year increase in unfunded liability totaling more than $12.5 million.

According to Carmen, despite implementing a state-authorized formula two years ago designed to eliminate the deficit in 20 years, the county’s unfunded liability has increased during that time.

“One of the plans the county currently has, has been escalating in costs substantially and has a very high unfunded liability,” he said. “Even when the county has contributed what we’re told to contribute, the debt keeps rising. By adjusting how we fund and what the long-term implications are, we can actually reduce that debt burden. By reducing that debt burden, we end up with more money to enrich benefits. We are actively working to manage that debt and provide much more flexibility for employees and the options that they have to choose for retirement.”

“We are proud of our employees and are trying to make sure they are competitively compensated with benefits.”

Cass County employees and community members had a chance to voice their opinions regarding benefits changes during Thursday’s board of commissioners meeting.

“I have been a police officer for 20 years, 12 of which with the Cass County Sheriff’s Office,” said MaKenzie Kreiner of the CCSO. “I think it is a shame that the county administration wants to take my [Municipal Employees’ Retirement System] away from me. Why? Because they don’t care. … It is an absolute shame and a slap in the face to think I would accept a lesser retirement plan than what I have now when I put my life, heart and soul into serving and protecting Cass County.”

“I’ve never witnessed such determination from administration to destroy their employees, and police that are terrified of what their future may hold,” said resident Beth Pompey during public comment. “Can Cass County really afford to have all of its employees leave? There are better options that need to be considered and discussed.”

Carmen understands the gravity of the situation and believes that the county is moving forward with the best interests of the employees in mind.

“Change is difficult,” Carmen said. “At the same time, we are trying to provide maximum benefits and an accumulation of wealth for employees. We recognize that being a public employee is not exactly easy these days, but public employees have benefits and compensation packages that are typically beyond the communities that they serve. The county has to live within its means the same way houses and businesses do.

“The county has a pretty fixed routine and the only increases comes as a result of the tax base growing. We are dealing with the limitations of that while also having a desire to have a very competitive total compensation package for our employees because we want to be able to hire competitively and want to be able to hire the best and attract the best.”