Politics & Government

Lower Merion Commissioners Argue Over Deferred Compensation

A finance workshop turned to a debate about deferred compensation.

At a Wednesday evening finance workshop to discuss how to allocate $6.9 million in general fund revenue, Lower Merion commissioners argued about an option of providing post-employment benefits for township employees.

Commissioners discussed 14 of the 39 options presented by Lower Merion's Chief Financial Officer Dean Dortone, and commissioners Lew Gould and Jenny Brown spoke out when an option of setting up an "other post employment benefits" (OPEB) fund came up.

"I learned today for the first time in my 16 years on the board of deferred compensation," said Gould.

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Brown added that the township is currently spending upwards of $300,000 per year on about 40 employees in township management.

"I also share a deep, deep concern that this is not something that was pointed out to commissioners," Brown said. "I intend to investigate it to understand exactly what is coming out of township taxpayers’ budgets."

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Township Manager Doug Cleland, whose contract is up for renewal and has also caused some , said that deferred compensation—in a 457 plan, similar to a 401(k) plan for employees of public companies—has been in existence in Lower Merion since the 1970s.

Cleland said he was surprised to learn some commissioners were unaware of the benefit, which he said was reauthorized in the 1990s and again in 2006.

Board President Liz Rogan echoed Cleland's sentiment and said she assumed everyone understood that benefit.

"There was no secret, no nefarious intent," Rogan said. "Obviously there are some people who didn't understand what that part of the compensation is."

Brown disagreed, saying the benefit is not explicitly detailed but is instead "a big lump in the budget document."

Later, commissioner Brian Gordon said he'd heard of deferred compensation before but shared a concern about the benefit not being more clear in the budget.

"One of the bugaboos I've had is, you can't read the budget and figure out what township employees make," Gordon said. "We need to have some other way of presenting that—to have a sense of what our people are being paid.

Brown said, with deferred compensation, Cleland makes $275,000 per year from the township, rather than the $245,000 previously thought.

Rogan noted the commissioners would go into executive session after Wednesday night's board meeting to discuss Cleland's contract, which expired Dec. 31, 2011. .


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