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Commissioners clarify LOSAP funding: $986,043 health rebate added to $1 million appropriation; actuarial review to guide benefit increases
Summary
The board agreed that a $986,043 health care rebate would be added to an existing $1 million LOSAP appropriation and discussed possible additional contributions and timing for actuarial valuation before any benefit increases for long-tenured participants.
St. Mary's County commissioners on May 6 clarified that a reported $986,043 health-care rebate is to be added to an existing $1,000,000 appropriation for the county’s Length of Service Award Program (LOSAP), and discussed options for further contributions ahead of an actuarial valuation later this year.
County finance staff explained LOSAP currently sits in an enterprise fund with a $1,000,000 budgeted contribution and that the health-care rebate would be in addition to that amount. A commissioner asked that the full $986,043 be placed into the LOSAP trust in addition to the previously budgeted $1,000,000; staff indicated the combined contribution would raise the trust balance and that an actuarial review later in the year will determine whether the trust has reached the funding threshold that would allow benefit distributions or increases.
Commissioners and staff discussed the potential effect of additional deposits. One commissioner summarized that putting $2 million into the trust (current balance plus proposed deposits) would move the trust toward an 80% funding level; staff said the trust target is about $23 million and that actuary guidance is required to confirm whether the plan could begin to use returns to pay benefits. County officials noted actuarial work would occur in the fall and any benefit changes would likely be effective Jan. 1 of the following year.
Staff described a modeling example: at a projected 6.5% return, the trust could generate roughly $1.3 million annually; using a portion of returns might allow modest increases to current participants. Commissioners emphasized the need to wait for the formal actuarial valuation before promising or implementing an increase. The discussion included clarification that the rebate is general-fund-derived and would be treated in addition to the enterprise fund contribution.
No formal ordinance or final appropriation was adopted at the session; commissioners indicated consensus support for the clarification and directed staff to proceed with actuarial review and to return with implementation options after that analysis.
