The assumed rate of return for Butler County employees' defined benefit retirement plan has been lowered for the first time and adjusted for the first time in 20 years.

Ben Holland, the county controller, said the Butler County Employees Retirement System board of trustees voted to lower the plan's assumed rate of return from 7.5 percent to 7.25 percent.

The decision was made after an actuary reviewed the plan to determine how much the county must contribute to ensure sufficient funds are available when employees retire.

That amount, Holland said, is determined by predicting the amount that could be earned when the contribution is invested.

For example, Holland said, if it is believed that a high rate of return on investments will be coming in the future, the county would contribute less.

He said the trustees feel the 7.5 percent assumed rate of return is too high, so they want to ensure the appropriate amount is contributed now to avoid a shortfall in the future.

“We're basically making sure that today's taxpayers pay their share and the future taxpayers don't pay more than their fair share,” Holland said.

He said the county employees and retirees will not be affected by the move.

“It's good for the participants because it ensures the long-term sustainability of the plan,” Holland said.

The rate was adjusted due to coincide with what the county feels return rates will be in the future.

“The market has done unusually well for the last few years, and I don't think that performance is going to continue,” Holland said.

However, the favorable market last year plus various recommendations by the actuary will allow the county's contribution to the plan to fall from the budgeted $5.5 million to $5.2 million even though the assumed rate decrease should have increased the county's contribution by $1 million, Holland said.

The plan was last adjusted two decades ago, when the assumed rate of return was increased.

The rate has never been decreased, Holland said.

Currently, about 1,200 active, retired and terminated county employees participate in the retirement plan.