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General Assembly changes Fulton Pension Plan


School board, superintendent to have more governance over $270 million plan



April 03, 2013
FULTON COUNTY, Ga. – After languishing in a House committee for nearly a month, a resolution seeking changes in the pension board for Fulton County School System employees took the fast path to approval in the waning days of the General Assembly.

Two days before the 40-day session ended on March 28, the Senate gave final approval to House Bill 380, which amends the governance structure of the pension board, handing more direct control to the Fulton School Board and the superintendent. The resolution now goes to Gov. Nathan Deal for final approval.

Currently, the Fulton County Schools Pension Plan is governed by a seven-member elected board, which oversees a $270 million budget. The plan is funded primarily by the Fulton County School System, and covers about 5,600 current employees and retirees. Two members of the Fulton School Board serve on the pension board.

The Fulton County Schools Pension Plan covers only those teachers who were hired prior to 1986, and non-certified employees, including bus drivers, food service, custodians and other non-classroom staff. Teachers hired after 1986, the overwhelming majority of the system's 9,000 teachers, are members of the state Teachers Retirement System.

The new legislation makes the pension board an administrative committee under the Fulton County Board of Education, and will consist of the chief financial officer and the director of fiscal services of the Fulton School System, and five rotating members who will be nominated by the committee and appointed by the Fulton Board of Education. The superintendent will also be a member of the committee.

The goal of the new alignment, said Fulton School Superintendent Robert Avossa, is to "establish a single line of accountability, remove confusion over who is responsible for the plan administration and provide oversight by the superintendent and the board of education."

The change in governance structure will not impact benefits or retirement pay, all of which are established and enacted by the state legislature.

The change was prompted by a $3.2 million overpayment by the pension board to retirees over a 10-year span which was discovered two years ago.

Even after the discovery of accounting errors, another $260,000 was overpaid by the pension board until corrections could be made.

While there were a few underpayments, nearly 400 retirees were overpaid, some by tens of thousands of dollars.

After months of negotiation by the IRS, an agreement was made to hold harmless the school system, which is the sponsor of the pension plan. While the IRS action absolves the system from a legal standpoint, a plan is still being worked out to re-pay the missing funds. Only the pension board can make the decision to seek reimbursements from those who were overpaid.

It was during these negotiations with the IRS the school board and Avossa recognized the need for more oversight of the pension board.

More than 90 percent of the pension plan is funded annually by Fulton taxpayers, with the other 10 percent coming from employees and past contributions from retirees, according to school system figures.

School Board President Linda Schultz said it was an "eye opener" to realize the school system is legally and financially responsible for the pension plan, but had no governance over the plan, except for two of seven votes on the board.

Some retirees spoke out against the resolution noting the lack of communication and transparency on the part of the school system.

"The resolution was passed with no notice to the public or opportunity for community input, no transparency on the part of the Fulton County Board of Education and no prior communication with the Pension Board even though two members of the School Board sit on the Pension Board," a widely-distributed memo from the pension board said.

Schultz countered information about the resolution was placed on the school system website the day after the resolution was passed by the board and prior to its being sent to the legislature.

Schultz said the school system intended to send out a letter to all members of the pension plan; however, it was not able to get a complete list of addresses from the pension board prior to the vote.

This article was published in the Revue & News April 3, 2013 edition

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