Loudoun Gov’t Looks to Catch Up on Volunteer Fire-Rescue Benefits After Losing Investment

County officials are looking to get a benefits fund for fire and rescue volunteers back on track after bad investments lost almost 10 percent of a nearly $20 million fund.

The Length of Service Awards Program is similar to a pension program, but provides retirement benefits to emergency response volunteers. In 2014, that liability to the county’s budget was fully funded after a concerted push by supervisors led by Supervisor Ralph M. Buona (R-Ashburn).

But the fund was set back again during a contract with investment firm RBC Wealth Management, which saw the fund lose close to 10 percent of its value over two years. The LOSAP Investment Committee, which oversees that contract, elected not to renew that five-year contract when it expired, and county treasurer H. Roger Zurn Jr., the chairman of that committee, said he expects to have a new contract signed by January.

Zurn said it was the committee’s first foray into equity investments, in which investors buy shares of companies, and the person managing the county’s money portfolio invested in funds that were not managed well. Buona, who also serves on that committee, said the fund lost 2.5 percent one year and then 7.1 percent the next.

“We met with the gentleman on at least three occasions, and he kept saying that it’s going to turn around, you’ve got to give it time, and he presented a couple of things that looked like that made sense, so we let it go after the first year,” Zurn said. “But then the second year, by the time we were able to unwind from him and end the contract—because unfortunately it was a contract—we were down another 7 percent.”

As a result, the fund missed its targets, shrinking at a time when other portfolios were growing. Buona said the fund stands at 78 percent funded, about $5.5 million short.

“The lesson learned was you’ve got to listen to your gut and react according to that, and if we had, we would have cut that loss in half,” Zurn said. “…He had the right facts and figures to back it up, but we didn’t listen to our gut, and going forward, if we’re not comfortable with something we’re going to react to it.”

Zurn and Vice Chairman Ralph M. Buona (R-Ashburn), who also serves on the committee, have considered using some of the county’s unusually large year-end fund balance to start getting the fund back on track over time.

It is not uncommon for pension funds and similar investments to have some unfunded liability. In fact, Buona said, it is extremely rare for that kind of fund to have no unfunded liability.

“I don’t want to say the sky is falling,” Buona said. “Seventy-eight percent funded is pretty darn good compared to most jurisdictions in the United States. To me, it’s not good enough.”

 

rgreene@loudounnow.com

2 thoughts on “Loudoun Gov’t Looks to Catch Up on Volunteer Fire-Rescue Benefits After Losing Investment

  • 2018-12-28 at 6:08 am
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    If the fund was 100% and you decided to invest the money it should not be the taxpayer on the hook as that was taxpayer money to start with. We don’t need to pay for the same benefit twice even if it elected officials who lost the money. A cut in benefits brought to you Buona and Zurn.

  • 2018-12-30 at 12:30 pm
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    So a wanna be investor looses money and expects the taxpayer to cover his A$$. Kinda of like him being a wanna be baseball park builder at One Loudoun or a wanna be Bridge to Nowhere builder and lets not forget the never ending bill for the Silver Line this wanna be signed us up for. Ha, you thought I was talking about Matt Letournea when it was Ralph.

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