One local city is going to review its pension program as its costs continue to rise.

The city of Atlanta has found itself in a tight spot with its pension program, which has risen 13 percent a year during the last decade.

The Cherokee County government and local cities are keeping an eye on their pension funds and remain positive about the position they are in, but the Mayor of one city would like to see a review of its program to ensure the city is getting the best deal.

Canton

The Canton retirement plan is calculated on an employee's years of service with the city, a summary of the employee's highest five years of service and a retirement formula. The pension begins at the age of 65. Retirees can also select a retirement beneficiary if they choose.

An employee is vested after five years or four years for an elected official. There are 38 people receiving a pension from the city. The total amount of pensions paid by the city in 2008 was $590,560, growing to $691,273 last year and $741,493 this year. The money comes from the general and water and sewer funds, which total approximately $20 million. That is about 3.7 percent of the two funds.

It is paid to the Georgia Municipal Employment Benefits System, part of the Georgia Municipal Association, which handles the payments to retirees. The city funds the payments. The amount covers current and future retirement liabilities, according to City Manager Scott Wood.

Mayor Gene Hobgood said the pension program is just one item he hopes the city will review once a new chief financial officer is hired.

"We need to review all our benefits and vendors to make sure we are getting the best prices," he said. "The CFO ought to really scrutinize all of our purchases."

Cherokee County

Cherokee County had about $3.6 million in total pension costs in 2008. The total rose slightly in 2009 to about $3.5 million. For 2010, $3.3 million is in the budget for pensions. Pensions contributions come from the budgets for the general, emergency 911, senior services, parks and recreation, insurance premium, transportation, multiple grant, community development, animal services, victim/witness, DUI court, fire administration, recreation capital, Special Purpose Local Option Sales Tax, conference center, emergency medical services and fleet maintenance funds. The total of the funds is about $167 million. The $3.3 million is about 2 percent of that total.

The money is paid into a retirement plan operated by Gebcorp for future retirees. Current retirees are paid from funds already paid into the plan. The $3.3 million is funded by the county. Employee contributions equal about $2.7 million.

Full-time employees who complete 5 years of vesting service and reach age 65, or whose age plus years of vesting service equals 75, or who complete 30 years of vesting service are eligible for unreduced normal retirement. A full-time employee may retire early with a reduced pension benefit at age 55 with five years of vesting service.

Normal retirement is calculated as two percent of the participant's average monthly compensation (the highest average of participant's compensation over 36 months within the last 10 years) multiplied by years of credited service. Early retirement is two percent of the participant's average monthly compensation multiplied by years of credited service minus an annualized rate of four percent. An employee has the option of designating a beneficiary.

Buzz Ahrens, chairman of the county board of commissioners, said every budget item is under scrutiny but said he feels the county is not in danger with its pension.

"We are making our payments," Ahrens said. "We are in good shape."

Woodstock

Woodstock paid $667,695 in 2008 for pensions and $379,296 in 2009. The total for 2010 is $608,750. Chief Financial Officer Henry Bucci said the money is paid to GMEBS. The money is paid from the general ($539,350 out of $16.3 million, or 3 percent), water and sewer ($51,200 out of $8.7 million, or less than one percent) and stormwater funds ($18,100 out of $923,853, or 2 percent), which totaled approximately $26 million for 2010.

"We review it every year to make sure that it doesn't get skewed," Mayor Donnie Henriques said about the pension program. "We've been doing it the right way."

City Manager Jeff Moon said the city pays into the GMEBS fund for current employees, who draw from the fund when they retire.

The formula to calculate the benefit is two percent of the final average earnings times years and months of credited service. Employees are vested at five years with retirement rights. Normal early retirement is 55 years of age with 10 years of service. A beneficiary will get part of the pension if the retiree has selected a survivorship benefit at retirement. There are different payment options with differing percentages of survivorship.

Holly Springs

Holly Springs paid $44,330 in pension costs in 2008. The total dropped in 2009 to $44,113 and there is $53,188 budgeted in the 2010 budget. The city has one retired and 14 former vested employees. The money is paid from its general fund of $3.8 million, about 1.4 percent of the fund. The money is the minimum amount the city must pay to participate in the GMEBS plan.

To be vested for normal retirement qualifications, an employee must be a regular employee and work 20 hours per week and have continuous uninterrupted service for five years. Past service at another municipality that uses GMEBS can be used to meet the vesting period. Employees are not eligible for a full benefit until they are 65 or they can take early retirement, where the employee can be 55 years with 10 years of credited service. The city pays the money to GMEBS, which pays out all pensions.

The pension is funded by the city's general fund. The employee receives one-and-a-half percent of the final average earnings multiplied by the years of credited service as an eligible regular employee. The pension ends with the death of the participant unless the death occurred in service, in which case a monthly benefit is paid.

Mayor Tim Downing said the city stays on top of their program to make sure their payments do not get into the same situation as Atlanta.

"The city is set up differently and we monitor our fiscal situation carefully to ensure we don't end up in a similar position as Atlanta finds itself in now," he said.

Ball Ground

The city of Ball Ground does not pay out pensions. It has a program called a 457b, which is similar to a traditional 401k. The employee can have pre-tax dollars withheld from their paycheck that is distributed into to funds of their choosing. The Cherokee County School District does not pay out pensions either. Its employees pay into a program that is operated by the state.

Waleska

The city of Waleska paid $3,392 in pensions in 2008 and $3,699 in 2009. There is $4,212 in the current budget for pensions. The money is funded from the city's general fund. The current general fund is $246,657. The total for pensions accounts for about one percent of the fund. There are three people receiving a pension from the city. The funds are paid to GMEBS for retirees and current employees.