SOMERSET, Pa. – A strong economy has propelled Somerset County’s retirement fund to new heights, Somerset County commissioners were informed this week.
Shane Nikolic, senior vice president at Pittsburgh-based investment management firm CS Mackey, said the S&P 500 index, the main benchmark for the U.S. stock market, posted its strongest performance since 2012 in the two quarters ended March 31.
Somerset County’s pension fund increased by $2.5 million from January to March, totaling $73.6 million.
This is good news for the county, which has a duty to ensure the accounts are properly funded, and for the hundreds of pensioners who currently live there and those who will join them in the future.
“The economy is doing well, and when the economy is doing well, the markets reflect that,” Commissioner Pamela Toker Ickes said Tuesday, along with Chairman Brian Fochtman and Commissioner Irv Kimmel Jr.
The measure approved in 2021 would give Illinois-based Marquette Associates oversight of the county’s investment portfolio and the asset management firm that invests the county’s money, C.S. McKee, the investment manager that manages the fixed assets in the retirement account, the county’s largest fund.
Nikolic told commissioners that the county’s strong revenues over the past six months reflect a “resilient” U.S. economy that continues to add jobs thanks to an upward trend in wages and a surging stock market.
Nikolic said those factors, along with the fact that consumers continue to spend money on merchandise, dining out and other measures of the economy, offset the fact that service sector-related inflation continues to affect costs such as utilities and transportation.
Somerset County Treasurer Anthony DeLuca said the county needs to do all it can to take advantage of the strong market.
He asked Sarah Wilson, senior vice president of Marquette Associates, whether there were steps the county could take to move funds around more quickly or to give the county more flexibility in investing its money.
The county is investing general fund money, federal COVID-19 relief funds and other funding through First National Bank, while Somerset Trust Co. acts as custodian of the retirement fund.
As it stands, the transaction process is a bit complicated through two fund management companies, but “we were able to get through that,” Nikolic told DeLuca, adding that there was no cost to the county.
“If you want to know what your options are, that’s up to you. We’ll make it happen,” Wilson told commissioners, noting that consultants could help prepare a request for proposals if the bank chooses to go that route.
Commissioners did not take any action on investments during Tuesday’s meeting.
DeLuca sought to give Somerset County more control over its individual investments, but in 2022 he clashed with the former Board of Commissioners, led by then-Chairman Gerald Walker, and the matter briefly escalated into a legal battle.
DeLuca said this year that Somerset County has benefited from the ability to invest additional funding, including an increase to the general fund, in one agency rather than multiple agencies.
He said in presenting the June report to the board that the county generated $146,179 in interest last month.
The county generated $392,150 in interest in 2024, much of which came from tax revenues replenishing county coffers in the past two months, about $50,000 more than it generated during the same five-month period last year, DeLuca said.
“If we can continue to generate this kind of interest, the county will be able to allocate $1.3 million toward needed (expenses),” he said.
With the market booming, the county has signaled its intention to invest more than $30 million in the financial markets, “which gives us more power to get banks to work for us,” he said.
First National Bank fixed the county’s investment rate at more than 5.5 percent earlier this year and is hopeful that banks will continue to make aggressive proposals when new rates are required later this month.
“The best part is there’s no risk. The interest is guaranteed,” DeLuca said, adding that rather than being essentially frozen in an investment CD, the money is portable. “You can withdraw it without penalty.”
He thanked the current board “for allowing me to carry out my duties.”
“This has given us the best bang for our buck, and the numbers show it,” DeLuca said.
