LEBANON COUNTY, Pa. — A report by Pennsylvania Auditor General Timothy DeFoor released Thursday found that Heidelberg Township, Lebanon County owes the state a refund of more than $450,000 for aid it received for a police pension plan that the township canceled in 2016.
DeFoor's report says the township owes $456,318.
“State pension aid helps to ensure municipalities are able to meet their obligations to retirees,” DeFoor said in a press release. “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, DeFoor said.
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, according to DeFoor.
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, according to DeFoor.
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.
