Auditor General DeFoor: Heidelberg Township in Lebanon County Owes State More than $450,000 from Canceled Police Pension Plan
Auditor General DeFoor: Heidelberg Township in Lebanon County Owes State More than $450,000 from Canceled Police Pension Plan
HARRISBURG – Auditor General Timothy DeFoor today released an audit that found Heidelberg Township, Lebanon County, owes the state a refund of $456,318 for aid it received for a police pension plan the township canceled in 2016.
“State pension aid helps to ensure municipalities are able to meet their obligations to retirees,” DeFoor said. “If a municipality pulls the plug on a pension plan, they cannot simply take the money and run – they must return state aid while making certain the plan’s future liabilities are met.”
A compliance audit found the township improperly distributed the former pension plan’s assets when it transferred $927,476 to its general fund without determining how much of that money should have been returned to the state. The $456,318 refund owed is based on calculations of state aid provided to the township prior to 1985 along with subsequent investment earnings.
As a consequence of that finding, the department may consider withholding state aid from Heidelberg Township’s non-uniformed pension plan.
The audit also found the township failed to properly maintain a pension reserve fund or purchase an annuity to provide a monthly pension benefit for the surviving spouse of a police officer who died in 2015. That individual is due to receive a deferred monthly pension benefit beginning in 2024.
This year, the Department of the Auditor General distributed a total of $317 million in state pension aid to 1,492 municipalities and regional departments to support pension plans covering police officers, paid firefighters and non-uniformed employees. The funds are generated by a 2 percent tax on fire and casualty insurance policies sold in Pennsylvania by out-of-state companies.
Review the Heidelberg police pension plan audit report and learn more about the Department of the Auditor General online at www.paauditor.gov.
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