Several Utah County employees and the employees' benefit committee want the county to stop depositing pension contributions into the state's Public Treasurer's Investment Fund and resume investing the money with Mutual Benefit Life.
In the past, the county invested all pension funds with Mutual Benefit. But when New Jersey insurance officials took control of the company in July and froze its funds, the county began withholding payments to Mutual Benefit and started depositing the funds into the state pool.County Treasurer Leonard Ellis said using the state fund was a temporary move until Mutual Benefit became more solvent or the county found another pension vendor.
However, New Jersey insurance officials recently informed the county that it can make deposits into three accounts that will not become assets of Mutual Benefit and will not be subject to the restrictions placed on the company's funds. Because the accounts would likely earn more than the state pool, many employees want the county to start placing their funds into the three accounts. Last month the state pool earned about 6.25 percent interest.
"This would give employees the opportunity to be in the stock market if that's where they want to be," Deputy County Attorney Guy Burningham said.
Also, the employee benefits committee said that if the county does not start depositing funds with Mutual Benefit it may violate the contract it has with the company. The benefits committee is concerned that a breach of contract could jeopardize the funds already deposited with Mutual Benefit.
"We feel this is the best way to avoid a future legal battle," said Joseph Miner, chairman of the benefits committee.
Referring to the fact that Mutual Benefit was taken over by New Jersey insurance officials and that the county's funds are frozen, Commissioner Malcom Beck told Miner, "To me they've breached the contract, not us."
Even though the benefits committee supports resuming business with Mutual Benefit, not all county employees and officials believe the county would be wise to do so. Ellis said he has received information that Mutual Benefit is still unstable and likely will remain so.
"At my age I would rather not have my funds placed with them," Ellis said.
Bruce Peacock, county clerk/
auditor, said he does not like the fact that if the county resumes doing business with Mutual Benefit it likely will have to deposit all pension funds with the company. The county would be assuming a risk by depositing money with Mutual Benefit that belongs to employees who no longer want to invest with the company, he said.
"We've got a fire in that part of the forest so I think we ought to stay out of that part of the forest," Peacock said.
County commissioners asked Burningham to find out if the county can only deposit money with Mutual Benefit from employees who choose do so. Also, Burningham was instructed to find out the consequences to the county if it breaches the contract and what it has to do to terminate the contract. The commissioners said they would also like efforts to begin to find another pension and insurance vendor for the county.