National Conference on Public Employee Retirement Systems

The Voice for Public Pensions


On the Front Lines: Fairfax, VA

The fifth installment on the On the Front Lines series brings us to Fairfax County, Virigina. 

On the Front Lines: Fairfax County, Virginia

Since the Covid-19 pandemic began, “assistance from a distance” has been the buzzword in Fairfax County, Va. The suburban jurisdiction is the largest in the Washington, D.C., metropolitan area, with more than 1.1 million residents.

Jeff Weiler, executive director of Fairfax County Retirement Systems, says the transition to working offsite during a lockdown has been smooth. “We've run two monthly payrolls for retiree benefits, totally remotely, and we continue to have people retire,” he said. “Everything that should be happening is happening.”

FCRS consists of three separate defined-benefit retirement systems—for county employees, police, and uniformed, which covers fire and rescue and sheriff's department employees. Combined assets of the three plans total $7.4 billion, and they serve more than 30,000 members.

The membership includes non-teaching staff of the county's public schools, including custodians and bus drivers. The demographic is such that large swath of membership consists of many people who aren't computer savvy, and many for whom English is a second language. “We have long-term plans to automate everything, but one thing this crisis is showing is that a lot of people want or need interaction to turn in their paperwork and make sure it's filled out right,” Weiler said.

Some spending decisions have been reconsidered as a direct result of the crisis. For example, FCRS has temporarily shelved plans to upgrade a 13-year-old pension software system, Weiler said. “We need it, but we have other priorities right now. When the dust settles and we know where we are funding-wise, we'll start back up.”

On the investment side, managers have stayed the course strategically, but have fine-tuned some tactics.  “We don't time markets, but we have done a few things [to reduce portfolio risk],” Weiler said. In addition to tweaking investments, all three boards delegated additional authority for investment decisions to management, knowing that there could be some quick decisions that had to be made.

The county's contribution to the funds is dictated by actuarial values calculated last fall and integrated into the fiscal year that begins July 1. That fiscal year 2021 budget has already been adopted and member contribution rates haven't gone up. While discussions about pension fund may lie ahead, “that gives us a little time,” Weiler said. “A little less than a year from now, the impact of current events will hit the county's budget.”

Fairfax County is keenly concerned with maintaining its AAA bond rating, Weiler noted. “They don't want to jeopardize that. They have agreed to a funding strategy that means their contribution will go up. We will know a lot more when we get to next year's budget,” he said. Reforms put into place in 2014 mean that “they will have contribute more if we earn less.”

Weiler anticipates more frequent check-ins with the Fairfax County finance department as the year progresses. Normally, they would meet at least once a year, but he anticipates additional meetings that would include the pension funds' actuary as they examine scenarios and collaborate on next steps. To foster open and honest communication, he has already begun sharing actuarial updates with the finance department.

In the meantime, Weiler is focusing on drawing lessons from the crisis as quickly as possible. Even before Covid-19 struck, he had undertaken a thorough review of every facet of the pension systems' operations. Now he is using that process to pinpoint vulnerabilities and document which functions can be performed remotely. While his team transitioned well to off-site work, he is look for ways to make it happen even more smoothly should it be necessary for virtually the entire 32-person department to telework again.

The result of this review will be “fairly detailed” and will generate a punch list so that each FCRS team knows its precise responsibilities during business disruptions. “We'll have it down to every interaction,” Weiler said. “We'll know if we can perform tasks remotely or not, and to what degree. And we'll list everything we need to do, from changing phone messages to updating websites.”

Before the Covid-19 outbreak, the continuity of operations plan “was something we had to do,” and it worked as a starting point, Weiler said. “Now we will have complete buy in.”

“You can have the perfect document, but the real trick is making sure people know how to adapt in a real crisis,” he added. “Knowing how to communicate, knowing what decisions have to be made, and knowing where to go for answers matter more than striving for perfection.”



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