You would think the pension board and a couple of CPAs would be a better vehicle to solve problems with the Knox County Uniformed Officers Pension Plan, but it will instead be resolved by a subcommittee of the Charter Review group.
Whoever makes a decision about putting something on the ballot, let's remember that the problems with the pension fund are not the fault of the sheriff's department and we would hope the solution does not represent a retreat from promises made to the officers.
A little history: City policemen and firemen had a defined benefit pension plan. In other words, when you retire you are guaranteed a certain amount of money each month—a traditional pension plan. County deputies had a plan in which they contributed a percentage of their salary and the county matched it up to a certain amount. Essentially, an IRA. Over time the result might exceed the amount you would get in a traditional pension. Unless the stock market goes in the tank about the time you decide to retire. And in the case of uniformed officers it is not unusual for them in their 50s to need to retire early—it often takes hard physical effort to be out on the street chasing young gangbangers. You retire early, you will get a huge tax bill with an IRA.
So the Fraternal Order of Police and rank-and-file deputies went to Sheriff Tim Hutchison and asked for his help to get a pension plan for the county similar to the city. They believed, correctly, that Hutchison had enough votes on County Commission to impose the pension plan.
But Hutchison wisely decided it was too big a chunk of the county budget not to take it to the voters. So a referendum was held. The voters approved the pension plan, even though it plainly said it might be necessary to raise property taxes 8 cents to pay for it.
Then County Mayor Mike Ragsdale, who had taken a vow not to raise property taxes, borrowed the money to launch the pension fund. What has often been lost in all this is that the officers had to roll over the money they had in the old pension plan into the new one. In Hutchison's case, for example, he turned over $500,000 he had accumulated over a period of 30 years' service. Any "solutions" involved in the new pension fund should take into account that the officers have their own money in the pot as well.
After the pension fund was set up, the economy tanked and investment results plummeted. So the county was in the position of having borrowed money to invest in the stock market and lost it—a double whammy. Let's recall that these decisions were made by county government, not the sheriff's department. The rank-and-file officers did not make these decisions. They just put their money in the new plan and trusted the county to give them the pension the voters approved.
That's what the committee looking at the pension fund needs to remember. Whatever solution they craft should ensure that they keep faith with the frontline officers who were promised a pension, which was ratified by the voters.
County Mayor Tim Burchett has inherited this mess, along with the current County Commission. They will have to solve it. I, frankly, don't see how they can craft a complicated solution to an underfunded pension plan and put it on the ballot as a charter amendment. Unless they propose a repeal of the pension plan. And as I've said, this breaks faith with the officers who are depending on this pension for their retirement.
Hutchison and I have had our problems over the years and I certainly did not support his bid to be county mayor. But he was a helluva sheriff. Any animus by certain groups toward him should not influence what is done about the pension plan. The responsibility rests entirely on county government and it is up to county government to resolve it.
This is a complicated situation and it needs to be resolved by competent actuaries and county financial people. It does not have a political solution.