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City to add $1.1 million
By Ron Fonger, JOURNAL STAFF WRITER
The city will deposit an additional $1.1 million into its retirement system today — the minimum amount of interest officials say is owed to the fund because of past failures to transfer money to the proper pension accounts.
City Administrator David Ready said today’s transfer comes on top of $21 million in employee and employer contributions transferred since December when former Finance Department Director Marc Puckett reported the transactions had not been made for two years.
Puckett resigned abruptly from his position this month but has said the failure to make the transfers, despite warnings from auditors, was unintentional.
Members of the city Retirement Board continue to sort out how much the pension system is due because of lost interest income. Ready said, however, the $1.1 million represents an estimate by auditors of the interest earned on the $21 million while it was in the improper account.
Hugh Rose, vice chairman of the Retirement Board, said Tuesday that more money will be due the retirement system because of Puckett’s failure to see that the pension money was invested properly.
I think what it would have earned is greater than that ($1.1 million), Rose said during the board’s meeting Tuesday.
The board oversees an $860-million pension system.
A preliminary review of the matter by the Michigan Department of Treasury has concluded that while the city made employee and employer pension contributions for the two years in question, it failed to make transfers to the proper account within the retirement fund. The state’s investigation remains open.
Puckett has called the pension controversy an
election-year attempt to try to get the mayor (Woodrow Stanley).
Ron Fonger covers Flint city government and Bishop Airport. He can be reached at (810) 766-6317.
Copyright Flint Journal / MLive Media Group (mlive.com). Used with permission.