Resort Pension Fund Investment Returns Fall Short

OCEAN CITY – Economic uncertainties have left the Town of Ocean City’s pension fund investments falling short of the stated goal after thriving for several years, resort officials learned this week.

During Tuesday’s work session, Council President Matt James provided a recap of the Ocean City Pension Committee meeting from last week. Ocean City has two pension plans, one for the general employees and a second one for public safety employees.

While each are currently healthy, a review of the most recent pension committee meeting this week revealed some of the stalwart investments were not performing to the town’s expectations for a variety of reasons. The town, through the pension committee and its consultants, invests pension funds paid into the account by employee contributions into stocks, mutual funds and other assets in order to grow the funds and ensure they are available when employees retire.

In recent years, the state goal for the return on investment of the pension funds has been set at 7%. However, because of the volatility of the markets, the Mayor and Council earlier this year decided to incrementally reduce the anticipated return on investment in the pension funds to 6.5%. Currently, the town’s return on investment in the pension funds is around 6.9%, which is just around the previous goal of 7%. But there is reason for concern in the flattening of the returns after a couple of less-than-stellar quarters.

James said pension fund consultant David Esham of Morgan Stanley reported to the committee the current instability of the markets has created challenges in meeting the investment goals for the pension funds.

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