MIDDLESEX TWP — Supervisors moved to make a $300,000 infusion into township pension funds at a work session last Wednesday.
The $300,000, divided evenly between the uniform and non-uniform funds, comes from CARES Act reimbursements the township got this year.
The infusion was executed to bring pension ratios up to speed, according to township officials.
“We looked at the funding status,” said Michael Hnath, township solicitor. “The road department pension fund was at a smaller ... funded status than the uniform one for the police officers.”
Township manager Adam Hartwig said both the uniform and non-uniform pension funds have enough money through annual minimum municipal obligations (MMOs) for those drawing out of them.
But by reinvesting CARES money in township employees, Hartwig said the additional $300,000 will help the township “catch up” to increasingly higher retirement costs.
In other words, Hartwig said the township is trying to make pension funds more sustainable for the future.
“We adjust our MMOs accordingly to put in more each year,” Hartwig said after the meeting.
Hnath said last Wednesday current funding ratios for the two pensions funds aren’t equal.
“The police pension fund is larger, in terms of dollars,” Hnath said. “But it can always be improved as well.“
In the 2020 budget, the township approved $136,724 in pension obligations for township employees.
Hnath said by distributing the additional $300,000 equally into the police and staff pensions this year, the township’s contribution ratios become “roughly equivalent” for each fund.
“This is an evaluation,” Hnath said. “Right now, this is the ‘pull the Band-Aid off and then we’ll see where we’re going.’”
The 2021 MMOs were approved in October at $94,642 for police pensions and $35,032 for general pensions.
Hartwig said he also plans to set aside $100,000 from the general fund as an additional contribution, if needed.
Hnath said the township’s assets will be revaluated Jan. 1 for future pension contributions.
“Our snapshot at the end of the year is going to be helpful,” Hnath said. “This influx of money ... can’t hurt. It’s going to make your snapshot a little better.”
Mike Spreng, supervisor chairman, noted if the township didn’t approve the additional $300,000 this year to catch up the pensions, it may have needed to pay more going down the road.
The supervisors approved making $150,000 contributions to both the police and nonpolice pension funds.