Fairfax County Government Employee Retirement Study Findings Presented Jan. 17
Jan. 18, 2012
The findings of a Fairfax County employee retirement benefits study supports the continued use of the defined benefit pension plan for the county’s retirement program. The study was presented Tuesday, Jan. 17, to the Personnel and Reorganization Committee of the Board of Supervisors. Requested by the board and conducted by AON-Hewitt Consulting, the goals of the study were to:
- Determine the advantages and disadvantages of the county’s current defined benefit plans in contrast to defined contribution plans.
- Examine the county’s approach to total retirement benefits, including retiree medical benefits.
- Benchmark the county’s defined benefit program against competitors in the labor market, including several local jurisdictions, the Fairfax County Public Schools system, the state government (Virginia Retirement System) and the federal government.
Prior to the presentation, the committee’s chair, Mason District Supervisor Penny Gross, emphasized that the board would not make any immediate decisions based on the study’s findings.
“We have not had the opportunity to look at our retirement benefits in quite some time,” she said. “We need to digest the information in the study and have discussions.”
The county’s three existing retirement plans, in combination with compensation and other benefits, enable Fairfax County to attract the best and brightest employees and retain many of them for their careers, according to County Executive Anthony Griffin. “Having this extremely high quality workforce is the primary reason that we are able to provide the level of services which make Fairfax County great.”
The consultant strongly validated the county’s retirement philosophy and mission statement, the cornerstone of which is to provide a “responsible, tax efficient and competitive retirement program” that provides financial security for career employees.
Several factors were cited that support the continued use of the defined benefit plan model by the county, including:
- Defined benefit programs continue to be the most efficient and reliable way to provide long-term financial security to career employees in retirement.
- Such programs provide employers with a more predictable and cost-effective vehicle for delivering such benefits, even in the face of market volatility.
- Defined benefit programs are a heavily utilized component of total compensation packages in the public sector and are necessary to maintain a competitive position in the attraction and retention of talented and skilled employees.
- The defined benefit model was determined to best meet the requirements of Virginia state law.
The study found that the county’s three retirement systems have well-documented and sound practices in governance structure, administration and oversight. The consultants also noted the strong investment performance for the portfolios of all three systems, which have been recognized as leaders nationwide.
At the conclusion of the presentation, AON-Hewitt included several options for further evaluation and consideration by the board.
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