On January 21, 2013, a letter to the editor appeared in Main Line Suburban Life written by Chris Smith of Paoli. In his letter, ‘Willistown’s pension-fund shortfall must be addressed’ , Smith questioned how the supervisors planned to finance the $2.6 M pension shortfall? Smith pointed out that Willistown’s EIT is already at the highest level legally permitted.
Due to their pension shortfall, Willistown Township has received a Fund Ratio Score of 77 from Pennsylvania’s Public Employee Commission (PERC) that means that Willistown is only 77% funded against its liability. Every two years municipalities are required to submit their actuarially determined liabilities and in December PERC released their report, ‘Act 205 Distress Scores Based on the 2012 Actuarial Valuation Reports – 12/12/2012’. All municipalities contained in the report have listed all of their reported pension plans filed with PERC. The distress score based on the aggregate funded ration of a municipality’s pension plan. The score is used to determine a distress level and a municipality’s corresponding funding ratio.
Willistown’s Fund Ratio Score of 77% was an improvement from 2010 when PERC listed their pension funding at 65%. A Community Matters reader sent me Smith’s letter and suggested that I review the report for Tredyffrin. According to the December actuarial report from PERC, Tredyffrin Township received a Fund Ratio Score of 92%. In 2011, Tredyffrin reported assets in its public pension fund of $36,994,373 and liabilities of $40,257,326 for a shortfall of $3,262,954. Willistown’s Fund Ratio Score improved during the previous two years, Tredyffrin’s unfunded accrued liability of $1.4 M ranked a slightly higher 94% PERC score in 2010 versus 2012.
Of the 51 Chester County municipalities listed in the report, unfortunately approximately 50% received rankings in the ‘distressed’ category – Thornbury Township received the distinction of receiving a ‘severely distressed’ ranking of 23% with assets of $7.6 M as opposed to liabilities of $33 M. Twenty-five Chester County municipalities are listed in the ‘not distressed’ category including Tredyffrin Township. It was interesting to note that several Chester County municipalities received extremely high Fund Ratio Scores from PERC including our neighbors, Malvern Borough (122%) and East Goshen Township (125%).
In addition to Tredyffrin’s pension fund ratio score of 92%, there is some encouraging economic news – this month, Auxilium Pharmaceutical announced its moving its corporate headquarters to Lee Road in Chesterbrook and yesterday we learned that Teleflex, a medical device manufacturer is moving its headquarters from Limerick Township to Swedesford Road. With Auxilium and Teleflex moving into the township, that’s 300+ new Tredyffrin workers.