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Fort Worth Mayor Seeks Additional Directors for Board of Pension Fund

Posted on: Wednesday, 17 May 2006, 06:07 CDT

By Yamil Berard, Fort Worth Star-Telegram, Texas

May 17--FORT WORTH -- As the city continues an exhaustive financial review of its billion-dollar pension fund, Mayor Mike Moncrief is pushing for an immediate expansion of the fund's board of directors to increase its level of expertise.

"The sooner we get some expertise, some additional expertise, on this board, the better off I'm going to feel," Moncrief said during a council session Tuesday.

A team of financial experts -- the city's external and internal auditors, an independent actuarial firm and a professional with a background in securities regulation -- is testing the financial condition of the city's $1.6 billion pension fund.

The team is being formed by the city auditor at the request of the City Council, which has made Fort Worth's pension fund a top concern for 2006. A report to the council is expected by mid-July.

"It's being driven by this council's resolve to make sure we're doing everything possible to account for the people's money," Councilman Jungus Jordan said. "That's probably the No. 1 job that this council has."

Moncrief wants to expand by two the 11-member retirement board, now made up mostly of city employees and retirees. Moncrief wants Jordan on the pension board because the councilman has a background in investments. Moncrief also wants to appoint a community member with financial experience.

The council's scrutiny of the billion-dollar fund is intended to tighten any lapses in board governance and accounting methods and correct any other problems that may be draining the fund, council members said at Tuesday's meeting.

The fund is short $356 million of the money it will need to pay its beneficiaries, including police, firefighters and other city employees.

"My hope is that part of the information we'll be getting back [from the auditing team] is not only on the condition of the fund ... and how it has been run to date, but what are the things we can do to make it more sound," Councilwoman Wendy Davis said.

The city manager's office and the pension board are recommending that the council phase in an additional contribution that would reach $9.5 million annually after three years. That could require a tax increase. Employees may also be asked to contribute more to the pension.

State law caps the employee contribution at 10 percent, and the proposed increases would rise above that, Assistant City Manager Richard Zavala said. So Zavala recommended Tuesday that the city prepare to go to Austin to lobby to change that.

Some board members wanted to hold off on the trip to Austin until the audits are finished.

Those include a financial audit, which will be conducted by city Auditor Costa Triantaphilides and a staff member who is a certified public accountant and worked at the Fort Worth office of the federal Securities and Exchange Commission for nine years.

That audit will examine a sampling of transactions from five years ago to the present. The city's external auditor, Deloitte and Touche, will review the findings.

A second audit will be an assessment of the retirement fund's actuarial assumptions, used to determine how much money the fund needs to pay its obligations. The Stanton Group will conduct that audit.

A third review will examine the "best practices" of pension funds in Texas and elsewhere so Fort Worth can develop similar safeguards.

A few council members said they wanted the audit to lead to recommendations that would strengthen the fund's oversight.

Councilman Chuck Silcox, a member of the board appointed by the council, said the board will welcome the new appointments.

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Copyright (c) 2006, Fort Worth Star-Telegram, Texas

Distributed by Knight Ridder/Tribune Business News.

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Source: Fort Worth Star-Telegram (Fort Worth, Texas)

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