CLEARFIELD – Bill Asay, a representative from Mockenhaupt Financial Services, the actuary for the police pension plan, spoke to the Clearfield Borough Council regarding the pension plan of the borough police.
Council heard about the actuarial evaluation of their plan for the years 2007 and 2008. He explained that 2008 was not a good year for the market, thus affecting the cost of their pension plan.
Asay explained to council the options they have in administering their plan. Council could choose a market value plan which entails using the market assets as of Jan. 1, 2009. The market value plan would increase the cost from about $61,000 to $87,000 per year.
Another option for council was a smoothing plan. Asay explained that smoothing takes the gains and losses over a four year period and is designed to “take the volatility out of your annual contribution.” The cost of smoothing would go from $61,000 to $65,000 and was the recommended option by Asay.
Borough council member Susan Reed moved to consider the smoothing option and was seconded by council member Jim Kling.
Council elected to use a moderate smoothing plan, which spreads the cost associated with market losses from 2008 over a period of time. This assists the borough with already budgeted expenditures. Had council not chosen to “smooth” they would have been charged with an additional $27,000 to the 2011 budget.