Hinsdale pension boards file complaint against actuary
Updated: January 28, 2013 1:58AM
HINSDALE — The Hinsdale Police and Fire Pension boards have filed a complaint against an actuary for calculations they say left a funding shortfall of several hundred thousand dollars.
The complaint, filed Oct. 31, is the second complaint against Geneva actuary Tim Sharpe, following a document a La Grange Village Board member filed in June with the Actuarial Board of Counseling and Discipline, based in Washington, D.C., which oversees the profession.
The Hinsdale complaint said Sharpe didn’t comply with actuarial standards of practice and violated the professional code of conduct by using the 1980-91 Life Table, prepared by the Centers for Disease Control, instead of two standard pensioner mortality tables.
The Life Table is both outdated and inaccurate with the mortality rate of retirees much higher than the two other tables based on actual pensioner experience, the complaint said. The Life Table also doesn’t separate mortality rates for men and women.
William Zahalka, a retired police officer and Hinsdale Police Pension Board member, said the board hired Foster & Foster, a national actuarial consulting firm with offices in Oakbrook Terrace, to replace Sharpe. Board members were dissatisfied with his assumptions.
Based on the new firm’s assumptions, the Police Pension Board requested a tax levy of $966,977 a year ago, but was given $672,267, based on Sharpe’s calculations, Zahalka said. The village later added another $100,000 to fund the police pension, he said.
“We’re not trying to grab an exorbitant amount of funds. We’re just trying to fulfill our responsibilities,” he said.
The Pension Board has requested $1,012,386 for the 2012 tax levy, but has tentatively been allotted $728,065, according to a report from Darrell Langlois, finance director, Nov. 5 to the Village Board’s Administration and Community Affairs Committee.
Langlois said he and Committee Chairman Doug Geoga reviewed the study of Actuary Timothy Sharpe, and found no changes in actuarial assumptions recommended.
Langlois said he couldn’t comment on the complaint and the village using Sharpe’s mortality assumptions, but said the matter likely will be discussed again at the committee’s next meeting at 7:30 p.m. Dec. 3 before the Village Board adopts the levy Dec. 10. ~.