US- Mendocino County Employees' Retirement Association (MCERA) received $587,000 in a settlement agreement with former actuary Buck Consultants after the pension fund found the firm had miscalculated contribution rates.
Buck admitted to making miscalculations that resulted in significant increases in retirement contribution rates for the current fiscal year, MCERA said.
The pension fund trustees said Buck's miscalculations led to overpayment of employee contributions dating back to July 2009 while the employer contributions from the county, courts and district were underpaid.
The trustees received a report from EFI actuaries in February 2011 that confirmed the errors. As a result, MCERA terminated Buck in March and replaced the actuary with The Segal Company.
The settlement agreement will reimburse MCERA for the cost of reports where Buck made errors, lost earnings, the cost of the actuarial audit and legal costs.
The impact on MCERA members is expected to be minimal. MCERA said they will use the money from the settlement to pay for a team of professionals to assist in evaluating the impact on every employee that contributed to the pension plan.
MCERA said contribution rates will be corrected by 2012.
Buck Consultants was not immediately reached for comment.
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