Walker County to cover losses from delayed retirement payments

Coins in a glass jar on a wooden floor. Pocket savings from coins in the bank. Piggy bank in a glass jar with coins. money budget tile banking tile / Getty Images
Coins in a glass jar on a wooden floor. Pocket savings from coins in the bank. Piggy bank in a glass jar with coins. money budget tile banking tile / Getty Images

Walker County will cover the costs of investment gains that employees have missed because of delayed payments into their retirement accounts, a spokesman said Tuesday.

The county is two years behind on payments for the 300 employees in a 401-a program and just made payments for the 2016 cycle on April 8. The county still owes about $659,000 for 2017 and 2018.

Because the stock market has been strong at times during those years, the employees have potentially missed out on some significant interest on investments in the account. Asked about where this missed money would come from, county public relations director Joe Legge said during an April 18 interview. "The Standard [the plan administrator] is responsible for putting any of the interest that would have been earned into the accounts," he said.

But on Tuesday, Legge said he did not mean that the company would pay for the missed investment gains. He said he meant the company will calculate how much money each employee would have earned if the money had been invested in a timely manner. Because the county's contribution for each employee varies, calculating the exact amount missed is tedious.

"The Standard is responsible for calculating and applying the amount of interest due," Legge said in an email Tuesday. "The County will fund the interest from existing money."

A spokesman for The Standard, meanwhile, has pushed back on the county's previous explanation of why the payments have been delayed. Bob Speltz, the senior director of community relations for the company, told the Times Free Press that problems began when the county gave The Standard a list that included employees who are not eligible for the 401-a program.

"The responsibility for maintaining records for participant eligibility in either plan, and for conveying plan eligibility to The Standard, lies with the sponsor, Walker County," Speltz wrote in an email. "The County is responsible for funding the plan according to the guidelines set forth in the plan document."

Legge told the Times Free Press that the Standard asked for a full employee census in 2017, which was supposed to be used for compliance testing. Some of the employees on that list are not eligible for the 401-a program. Some are enrolled in a different retirement plan, while others have not worked for the county for long enough to be vested.

"The mix-up occurred because the list provided for compliance testing was inadvertently used for program eligibility," Legge wrote.

He declined to comment on who "inadvertently used" the list.

Legge previously told the Times Free Press that payments were also delayed because the process of getting ineligible employees off the list has taken almost two years. He said the county's human resources director and contacts with The Standard have gone back and forth since April 2017.

He said the county has worked with four different account executives during that time frame, and each one needed time to catch up on the complicated situation.

Asked about this, Speltz wrote, "We do not believe that this is the root cause of the matter."

Contact staff writer Tyler Jett at 423-757-6476 or tjett@timesfreepress.com. Follow him on Twitter @LetsJett.

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