Unfunded Pension Liabilities…..a ruling from the State’s lawyers..updated

Updated: Tuesday, 6/5/18

We have been concerned about the unfunded pension liabilities that appear on local county government’s and political sub-division’s balance sheet.  We contacted Representative Ron Young for assistance in trying to determine who is ultimately responsible for any unfunded pension liabilities.  He got us in touch with the Ohio Legislative Service Commission, and we received the following report from them.

Ohio Legislative Service Commission Answer on Pensions 4-24-18

In summary, they state that the obligation for any unfunded pension liability is the responsibility of the pension funds and not the responsibility of the political sub-division on whose balance sheet the liability is reported.

(LFC Comment: As an accountant it makes no sense to report a liability on the balance sheet if the liability does not belong to the political sub-division.  Our next journey may be to get financial information on the five pensions for the various public employees in the State of Ohio.)

Update: Tuesday, 6/5/18

I must have hit a nerve with Commissioner Dan Troy when I sent this email to the Commissioners and Mike Matas, Finance Director;
“To all,
With the help of Representative Ron Young, I did get the attached ruling from the Ohio Legislative Service Commission on who is responsible for the unfunded pension liability reported on a political sub-division’s balance sheet.

In summary, they say it is the responsibility of the various pension plans and not the individual political sub-division where the liability is reported.

I must say that the GASB ruling makes no sense to me.  If it is not the entity’s liability then it should not be on their balance sheet. Just my opinion.”

********************************
Here is Commissioner Troy’s response to me:
“I told you the same thing weeks ago. Obviously Ron Young had to go ask someone else what he should have known already.”  (LFC Comment:  Hmmmm, attacking his opponent, why?  My motive for the email was not political)
********************************
Here is my reply to Commissioner Troy:
“Thank you Commissioner Troy for your response.  My email was not meant as a slight to you in any way, nor to “build up” your opponent.  I am rather apolitical when dealing with issues.  Since I was not getting an answer from Lakeland Community College, the college’s auditors, or the State of Ohio Auditor, I decided to contact Representative Young.

Mr. Young also expressed that the pension obligation was the responsibility of the pension plans, but that still was not good enough for me. He offered to get input from the Legislative Service Commission. We sincerely appreciated Representative Young taking an interest in a taxpayer’s request to resolve an issue.
I sent you this email because I wanted to let you, and the other Commissioners and Mr. Matas, know that all of you were correct in what you told me at the Commissioners’ meeting.

Our only concern is to be honest and transparent with the taxpayers of Lake County, and give them facts and figures that support our position on a given subject.  We try to follow the Christian principles of kindness, toleration, and patience when dealing with everyone.”


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