What Are We Doing?

$9-million pension fund transfer raises questions (January 30, 1999)

By Ron Fonger, JOURNAL STAFF WRITER

A top aide to Mayor Woodrow Stanley says the city of Flint has forwarded $9 million to its pension system after failing to make the transfers for about six months.

I guarantee the system will be made whole, said City Administrator David Ready. We found the problem. We corrected it.

Two members of the City Council said Friday they want more information about what happened and why the transfers from an escrow account didn’t happen every two weeks as they should have.

Fifth Ward Councilman Barry Williams said members of the Flint Employees Retirement System Board of Trustees agreed this week to have auditors examine the late transfer as well.

Williams, a member of the retirement board, said the error appears to have been an honest mistake, which administration officials discovered and made public.

Mark Smith and Georgia Steinhoff, two other members of the retirement board, could not be reached for comment. The board meets monthly to oversee Flint’s retirement system.

Ready, who serves as chairman of the retirement board, said a Finance Department employee responsible for making the transfer failed to, and Finance Director Marc Puckett only recently recognized the error.

The principal and interest have been transferred to the proper account, he said. If auditors determine additional interest is due, it will be transferred as well.

Puckett will make a report on the transfer at the retirement board’s February meeting, Ready said, telling members how it happened; how it has been fixed.

City Council President Scott Kincaid said he’s been told by auditors that about $20 million intended for the retirement system actually built up in city coffers.

If in fact the city hasn’t been contributing like it should have, they are making the investments instead of the retirement board, said Kincaid. The pension system needs to be made completely whole.

The council president said he wants an accounting of how much interest the money could have earned if invested by the retirement system rather than the certificates of deposit used by the city.

Ron Fonger covers Flint city government and Bishop Airport. He may be reached at (810) 766-6317.

Copyright Flint Journal / MLive Media Group (mlive.com). Used with permission.