You wonder why township supervisers are jumping ship. The writings on the wall.

Pension problem pops up again in Warminster

Rick Kintzel / Staff Photographe

Posted: Monday, July 21, 2014 1:00 am | Updated: 4:03 pm, Mon Jul 21, 2014.

By Gary Weckselblatt Staff Writer

At his first supervisors meeting, Warminster’s new interim manager sounded a lot like his predecessor on the topic of pensions.

Steven Wiesner, hired last month to replace Rich Manfredi, who departed for a job in Conshohocken, called the township’s pension obligations “our biggest challenge” during Thursday night’s supervisors meeting.

The comments came as he spoke about the township’s $2 million budget hole.

Last year, Manfredi, in developing the township’s $28 million spending plan for 2014, described Warminster’s pension obligation as “unsustainable and financially crushing.”

This year, the $1.4 million tab for pensions is eating up a majority of the township’s $2 million reserve fund. Next year, less than $600,000 in savings won’t handle a pension bill expected to grow to more than $1.6 million.

Warminster is like many municipalities wrestling with an explosion of pension costs that make it challenging to deal with its core functions.

The unfunded liability of its police plan has grown from $450,000 in 2009 to more than 10 times that amount — in excess of $5.1 million today. But the problem is even more pervasive as the liability is growing faster than employee contributions and performance in the stock market.

The township has more than a $5 million problem, however. When the unfunded liability of the township’s nonuniformed pension plan and retiree health care costs are added to the police fund, the shortfall grows to $17 million.

To deal with the issue, in 2012 the township started putting all new nonunion hires on defined contributions plans as opposed to the defined benefit of a pension. The American Federation of State, County and Municipal Employees union agreed to have its new hires also placed on a defined contribution plan.

In March, supervisors heard from Vijay Kapoor, director of workforce development for Public Finance Management of Philadelphia, who gave an overview of the impact of retiree benefits on Warminster.

He told the board there’s no “silver bullet” for a system that essentially promises too much money to beneficiaries who are living longer. Investment losses and insufficient funding have escalated the problem.

To combat the issue, supervisors plan to develop a pension advisory committee. It would be made up of the township manager, two supervisors and two residents with a background in finance and pensions.

In other business, Supervisor Tom Panzer complained about stormwater inlets in Warminster Community Park not working properly because of “inches of debris.”

“It puzzles me that they’re not being maintained,” he said. “I get it that we have hundreds of them. But it struck me as odd those two storm (grates) were constantly covered.”

Wiesner, in his first meeting as interim township manager, said he would make it a high priority to get them cleaned.

Wiesner told the board he was “very excited” to be hired and “appreciates you putting your trust in me.”

He also thanked the township staff for making him feel welcome and for “getting me introduced to all the big projects. It’s an exciting time in Warminster.”

August’s board meeting, originally scheduled for Aug. 14, has been moved to Aug. 21.

Supervisors are expecting 3,500 visitors to Warminster Community Park on Sunday for the Down & Dirty Mud Run.