No action on former Luzerne County Children and Youth director’s pension

Luzerne County’s Retirement Board has once again tabled a decision on former county Children and Youth director Joanne Van Saun’s pension, even though she has now been sentenced for her crime.

Following long-established past practice, the board had delayed action since October because Van Saun had not been sentenced.

Last month, the 59-year-old Dallas woman was sentenced to 34 months of probation for misdemeanor child endangerment and obstruction offenses, with the first nine months on house arrest, related to her failure to investigate at least 217 reports alleging child abuse and neglect in 2017.

Retirement board Solicitor Donald Karpowich told the board Wednesday it could table the matter again because he is still awaiting official confirmation of Van Saun’s guilty plea and sentencing, which he had requested.

The board met in closed-door executive session, with a stated plan to discuss Van Saun’s pension. When the meeting resumed, Karpowich said the session focused on pending and threatened litigation, but he and the board did not elaborate.

All five board members then voted to table Van Saun’s pension.

Following the charges against Van Saun, the county retained Philadelphia law firm Troutman Pepper Hamilton Sanders LLP to conduct an internal investigation of the agency to determine if there is any evidence of possible wrongdoing. County Acting Manager Romilda Crocamo has said the Philadelphia firm is expected to conclude its investigation early this year.

Van Saun’s potential pension has been calculated at $4,467.23 per month, according to the board.

Pensions are based on past compensation, tenure and retirement option selections, and Van Saun had worked for the county approximately 35 years, according to prior published reports.

Under the state pension forfeiture act, former employees are not eligible for a pension or interest on their contributions toward a pension if they are convicted of certain crimes related to their employment, officials have said.

It’s still unclear if the charges against Van Saun will meet the legal definition allowing for denial of her pension.

Fund advisor

In other business, the board voted Wednesday to seek requests for qualifications from entities interested in serving as advisor of the employee pension fund.

Morgan Stanley has been overseeing the fund since October 2008. The board publicly sought proposals from other companies in 2011 and 2015 and chose to keep Morgan Stanley both times.

County Pension Coordinator Rick Hummer said the current contract with Morgan Stanley expires the end of this year because it started in 2016 and ran for five years, with two optional one-year extensions.

Morgan Stanley representative Richard Hazzouri said Wednesday that his company will be submitting a proposal.

The fund reached a record high value of $310.3 million at the end of 2021, with net investment earnings of $30.3 million for the year, Hazzouri reported to the board.

The 2021 investment return rate is currently listed at 10.76%, but Hazzouri said he expects that percentage to end up at 11.5% to 12% after he receives final returns from alternative investments and private equity/credit investments.

Hazzouri reiterated the goal of maximizing returns without exposing the public fund to undue risk while making sure enough cash is always available to cover ongoing pensions.

The fund must pay approximately $20 million in pension benefits to retirees annually, Hummer said.

Taxpayer subsidies have been required since 2002, when investment earnings and employee contributions stopped keeping pace with obligations for future pensions that are guaranteed by law.

This year’s taxpayer subsidy is budgeted at $14 million, with $10.8 million from the general fund and the rest covered by other funding, said county Budget/Finance Division Head Brian Swetz.

Serving on the retirement board are Crocamo, Swetz, employee/retiree representative John Evanchick Jr. and county Council members Kendra Radle and Brian Thornton.

The board voted Wednesday to keep Radle as board chair and appoint Thornton as vice chairman.