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Report: Water Works pension plan ‘adequately funded’ to pay benefits

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General Manager, Mac Underwood answers a question at the first meeting. The Waterworks Board of the City of Birmingham called a Special Board of Directors' Meeting Wednesday January 4, 2017 held in Birmingham, Alabama. (Frank Couch, The Birmingham Times)

By Barnett Wright

The Birmingham Times

General Manager, Mac Underwood answers a question at the first meeting. The Waterworks Board of the City of Birmingham called a Special Board of Directors' Meeting Wednesday January 4, 2017 held in Birmingham, Alabama. (Frank Couch, The Birmingham Times)
General Manager, Mac Underwood answers a question at the first meeting. The Waterworks Board of the City of Birmingham called a Special Board of Directors’ Meeting Wednesday January 4, 2017 held in Birmingham, Alabama. (Frank Couch, The Birmingham Times)

The Birmingham Water Works pension plan is sound financially and retiree’s benefits payments remain unchanged, said General Manager Mac Underwood.

Underwood cited a report from Segal Advisors that indicates “the Plan is adequately funded to pay retirement benefits,” he said.

Underwood sent letters to board members, retirees and employees on Monday, March 27 to “address any concerns that may exist” over the pensions, he said.

Recent news reports pointed out that approximately $4.3 million was invested in bonds that turned out to be worthless, Underwood said.  “These bonds were the result of a crime that was committed against the Plan — as well as over ten (10) other public pension plans,” he acknowledged.

However, the news coverage was misleading, Underwood wrote, because “it seemed to indicate that retirees’ retirement benefits were in jeopardy, which is not the case.”

In his letter, Underwood provided a Segal Advisors Report which completes annual actuarial reports on BWW Retirement Plan for Employees.

The report, he said, includes “key financial information such as the fair market value of the Plan assets, actuarial accrued liability, employer contributions and other pertinent information.”

“As the report from Segal Advisors indicates the Plan is adequately funded to pay retirement benefits,” Underwood wrote. “The loss reported in the news did not have a material impact on the Plans funding. It had no impact on any retiree’s retirement benefits.  All BWW retirees’ benefits remain unchanged and all BWW retirees have and will continue to receive the same retirement benefit that they were approved to receive.”