Two days before he is scheduled to start serving a six-year federal prison sentence, Louis Elmy was granted approval to reclaim $66,883 he paid into his Luzerne County government pension fund.
Elmy, 53, of Wilkes-Barre, worked at the county prison for nearly three decades and was sentenced last month for his guilty plea to one count each of extortion and possession of a firearm in furtherance of drug trafficking.
Court papers said he obtained cash, alcohol and crack cocaine from inmates in exchange for unauthorized work release leave and other special privileges. Elmy has blamed his crime on drug addiction.
The county Retirement Board, which oversees the pension fund, voted Wednesday to refund Elmy’s pension contributions without interest, pending receipt of a letter from federal prosecutors verifying he does not owe restitution.
The board had delayed a decision on Elmy’s pension until the charges were adjudicated. Elmy was not eligible for a pension or interest on his contributions under the state pension forfeiture act because his crime was related to his employment, said board Solicitor Donald Karpowich.
Elmy will receive about 30 percent less if he keeps the cash instead of rolling it into a new retirement account due to federal taxes and an early withdrawal penalty, said county pension coordinator Rick Hummer.
County officials have refused to pay pensions or interest earnings on employee pension contributions several times in recent years due to charges against former employees.
Another former county corrections officer, John Stachokus, is still awaiting a return of his pension contribution because he has not been sentenced. His sentencing was delayed until April 27, court records show.
Stachokus, 41, of Plains Township, entered a guilty plea in September for extortion and tampering with a witness. Prosecutors said he knowingly solicited cash, alcohol and drugs from a disadvantaged prisoner in exchange for unauthorized leave and then urged the inmate to lie about the arrangement to federal investigators.
After $4,895 in interest is deducted, Stachokus would be left with $31,957 in contributions, Hummer said.
Pension payment made
In other business:
• The board learned the pension fund was valued at $215.4 million as of March 31, according to investment adviser Richard J. Hazzouri, of Morgan Stanley. That’s an increase of 3.16 percent, or $6.7 million, since the start of the year, he said.
The fund has grown since then because the county paid an $8.7 million pension subsidy on Monday, said board member Brian Swetz, the county’s budget/finance division head.
While this subsidy was owed for 2016, Swetz said the timing of the payment was a positive because it’s the earliest the county has paid a prior-year pension contribution in years.
The county’s continued practice of turning over the taxpayer subsidy the year after it was due started years before the county’s 2012 switch to home rule government, with county officials citing financial struggles.
With the 3.16 percent return this year to date, the fund lost $68,730 through March 31 by not having the $8.7 million deposited on Jan. 1.
Swetz said the administration will continue striving to shift the county back to a timely payment schedule.
While maximizing returns is a goal, Hazzouri of Morgan Stanley has said his team is constrained by its need to limit risk to the public fund, particularly in a county without a reserve or other cushion to absorb gambles that don’t pan out.
The fund’s current allocation: 46 percent bonds, 40 percent stocks, 11 percent alternative investments and 3 percent cash.
