What started as an overpayment of $3 million to Fulton County Schools’ pensioners has escalated into a showdown at the state Legislature over who should control the pension — the pension board or the Fulton County school board.
The school board is pushing for passage of House Bill 380, which cleared the House last week and moved to the Senate. The measure would give the school board control over the district’s pension plan, which has about 5,500 participants and last year was funded at about $30 million.
The Fulton pension board and its relationship to the school board is unlike almost any other in the state: It is composed of seven members (including two school board members) but operates autonomously under state law. The school board funds the pension and is responsible to the IRS for ensuring it is fiscally sound.
Under the legislation the school board would have final say on the selection of pension board members.
Fulton schools retiree June Fortson told the Fulton delegation recently she opposed the bill because of that.
“The new pension board will be totally controlled by the superintendent and the school board and will serve at the will of the Board of Education,” she said. “The new pension board will not hear the voices of retirees and future retirees.”
The pension board is opposing the bill, Chairwoman Jeanne M. Wood said, because putting the school board in charge would mean pensioners would effectively have no say in the running of the fund.
But school board Chairwoman Linda Schultz disputed the “muddled message” that giving the school board authority over the pension would threaten or change pensioners’ benefits.
“We have repeatedly verified that benefits won’t change and we don’t have the authority to change them,” Schultz said. “They are protected by the state constitution and the courts. This is not about that, this is about transparency, about accountability.”
The Fulton school board’s vote in January to ask its delegation to introduce legislation to give the board authority over the pension stemmed from the $3 million overpayment to pensioners that was discovered in a 2011 audit. The legislation specifically addresses Fulton, but not other districts.
The question of whether the pensioners should be asked to give back the overpayments to the pension fund is now caught up in a dispute between the school board and the pension board over who has the authority to make the final decision.
The IRS has ruled the fund is in compliance and the school board doesn’t have to collect the overpayments. But Schultz said it’s the pension board’s responsibility to make the politically volatile decision whether to require retirees on fixed incomes repay the money.
Pension board attorney Lewis Horne said the issue is not clear. “We don’t want to take action that might jeopardize compliance,” he said.
About 400 pensioners collected $3 million in overpayments going back as far as 1988. On average retirees were overpaid $8,870, although one collected $79,330. The 2011 audit also discovered 35 retirees were underpaid a total of $135,000. They were sent lump sum checks.
The Fulton pension is separate from the Teachers Retirement System of Georgia pension, which some Fulton educators also collect. The proposed change in the law has no bearing on the state retirement plan and benefits, Schultz said.
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