ATLANTA — A move by the Fulton County Board of Education to take a greater administrative role in the system’s pension plan has some retirees concerned over the use of funds and the expanded role school administrators will play on the pension board.
The Fulton School Board passed a resolution during its Jan. 17 meeting proposing the pension board become a committee under the school board. It currently is a stand-alone board with its own rules and regulations. The resolution requires the approval of the state legislature to be implemented.
Fulton Superintendent Robert Avossa said the change affects only the governance of the pension board, and does not impact benefits or how they are directed. Those regulations are established by the state legislature.
But some retirees were outraged that the resolution was announced and approved at the Jan. 17 meeting with little advance warning or communication to the plan members.
“In the past we have worked cooperatively, but the way this has been handled almost seems we are adversaries,” said June Fortson, who retired from the Fulton School System in 2001. “We had no communication about this particular legislation and we feel there should have been input from [employees and retirees].”
She noted the resolution was placed on the Board of Education’s agenda on Jan. 16 for a discussion and vote the next night.
The current seven-member pension board oversees a $270 million budget, funded by the Fulton County School System, and which covers approximately 2,700 retirees. The goal of the new alignment, said 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.”
Avossa noted that several months ago a situation occurred with the pension plan that prompted the school system to take a look at the governance structure of the board.
Although he did not elaborate on the situation, Avossa was likely referring to the discovery of a funding error which led to the overpayment of more than $3 million to approximately 400 retirees over a 10-year period.
The Fulton School System is still working on a plan to resolve the issues, which will allow most of the overpayments to be forgiven, but the pension plan is still out of compliance with the Internal Revenue Service in the meantime.
School Board President Linda Schultz said she realized better administrative oversight was needed between the school system and the pension board during meetings with the IRS.
“There has always been confusion on the governance structure between the pension board and the school system,” said Schultz. “But it was a bit of an eye-opener to be seated across the table from the IRS and fully realize the school system is the sponsor of the plan and therefore accountable, but have [unclear] authority over the pension board.”
Currently, school board members have two seats on the seven-member pension board, with the remaining members elected or appointed by the pension board. If the resolution is approved by the legislature, the new administrative committee will consist of the chief financial officer and the director of fiscal services of the Fulton School System, along with five rotating members who will be nominated by the committee and appointed by the board of education. The superintendent will be an ex-officio member of the committee.
Schultz said the language is intentionally vague as to how the committee selects its appointees, to allow them to nominate or elect their own members.
The other change through the resolution is to make members of the new pension committee employees of the Fulton County School System, and under the direction and control of the superintendent. Currently, pension board members are employees for tax and benefits purposes only, but are not under the direction of the superintendent.
Fortson said this structure minimizes the risk of any “co-mingling” of funds with operational expenses of the school system and keeps the pension funds safe.
“Employees and retirees have put a great deal of their own money into this fund and want to see it protected,” said Fortson. “We feel this issue was put under the radar and we as a group were very concerned about that.”
Schultz acknowledged information on the issue was distributed close to the time the resolution was introduced, noting there was some concern with getting a complete list of plan participants in a timely manner.
A full explanation of the issue was placed on the Fulton Schools website the day after the resolution was passed.
The Fulton pension plan was created by the Fulton County Board of Education in 1945 and included all certified staff (teachers) and non-certified staff. In 1986, Fulton County joined the Teachers Retirement System (TRS) and all teachers hired from that time participate under TRS. The Fulton County pension plan now includes only certified staff hired prior to 1986 and non-certified staff.