The pension fund covering thousands of Ventura County government employees posted a 1.3 percent return in the last fiscal year, joining other public retirement plans with dismal results.
The tentative figure could improve slightly when the last few months of real estate earnings are reported, but not by much, Board of Retirement Chairman Bill Wilson said Wednesday.
"It's still a disappointing year," he said.
Wilson said the shortfall puts perhaps $5 million more in annual costs on county government. As the employer, the county must make up the difference between the actual return and the goal of 8 percent, he said.
"The county has a year to start planning how they're going to pay for that," Wilson said.
Other public pension funds' returns also sagged as the market softened.
The giant California Public Employees' Retirement System covering state employees and workers in local cities posted a 1 percent return. Coming in slightly higher at 1.8 percent was the California State Teachers' Retirement System.
Trustees of the county system, known officially as the Ventura County Employees' Retirement Association, have seen the financial picture worsen for the $3.2 billion fund in recent months. It has been about 80 percent funded, which rating agencies consider adequate. But that figure could fall into the 70 percent range with flat returns, longer life spans of pensioners and a technical funding policy change. The unfunded liability is probably close to $1 billion, Wilson said.
Local governments are on the hook when the market, which accounts for most of the pension revenues, goes south.
Paul Derse, the county's chief financial officer, said he is analyzing the impact of the low returns plus the other changes on county government. He expects to make a report to the Ventura County Board of Supervisors in September.
He said the county is contributing about $150 million to the pension plan in the current fiscal year plus $15 million of the employees' share. Any changes in contributions would likely take effect in 2013-14.
Wilson said the most disappointing returns were in the international market at a negative 12.5 percent. U.S. stocks held up well with growth of 4 percent and fixed-income returns were up by almost 9 percent, he said.
Two weeks ago, the pension board lowered its assumed rate of return to 7.75 percent. Actuary Paul Angelo recommended the reduction, but said 7.5 percent was more realistic.
The pension system covers 15,000 active employees and retirees of county government, Ventura County Superior Court, the Ventura County Air Pollution Control District and the Ventura Regional Sanitation District.
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Comments » 64
JustKaySee writes:
No problem. We can let 52 year old sheriff deputies retire at $120,000 per year for life, we just need to raise taxes even more. If people can't pay, no problem, simply seize their homes.
VintageRacer writes:
If pension reform could be enacted, they would have done so already. Public pensions are protected by Article 1, Section 10 of the US Constitution.
auret1#232805 writes:
In their report for FY 2011 the VCERA showed annual returns from 2002 to 2011 of -7.2%, 4.4%, 16.3%, 9.2%, 9.5%, 17.2%, -6.7%,-21.1%, 15.0% and 24.4%, respectively. They also showed VCERA’s annualized return over the last 3, 5 and 10 years as 5.1%, 5.5% and 5.7%, respectively. If the returns from 2002 to 2011 are correct, the annualized returns are for 3 years, 4.1%, 5 years, 4.3% and 10 years, 5.2%.
VintageRacer writes:
States can not declare bankruptcy. Read the CA Constitution. Public pensions are protected. I'm not saying it's right, but it's the law.
santarosa writes:
Yes, let's raise taxes on the productive and cut county services for the needy. Just so those fire heroes with a K-12 educations can retire at 120K per year at age 50.
Raise the retirement age for all county employees to 67 yo effective immediately! Place all county employee workers into defined contribution 401K plans NOW!. Politicians need to stop cowering in front of these ignorant union thugs and fix this pension ponzi scheme.
VintageRacer writes:
Sad, but true. I doubt the framers of the Constitution ever thought something like this would happen.
A news article on TV the other day explained it quite well. They said states are obligated to pay pensions first at the expense of services provided.
VintageRacer writes:
Current employees are protected as well. The only changes would be to new employees. Yes, reform is needed. But it will be very slow in coming.
VintageRacer writes:
If you're referring to me, your way off base. I've never supported large public pensions. I've only provided what the law states. And I'm not a public employee or public retiree. I'm a retired private sector retiree on a small private sector pension.
TK421 (Inactive) writes:
"The county has a year to start planning how they're going to pay for that," Wilson said.
It's coming from the general fund, that's how it's going to be paid. Why doesn't the BOS come up with 10 or so areas to cut from and put it on the ballet and the voters can decide for once what the priorities are...
And how about having the public safety folks pay the full 9% of their incomes for their retirement? What's this 2.5% garbage they've been getting away with? And prior to only a couple a years ago, they paid nothing. Somebody splain to me why schools should be shorted, positions left vacant or eliminated, library hours reduced, roads not repaired, parks not maintained so the chosen few can all get 6 figure retirements? The also have 401k and 457's on top of their retirement. They're always prattling on about service to the community...It's more like self service if you ask me!
TK421 (Inactive) writes:
That's what San Bernardino is doing? I caught one of their blow holes on the news the day they filed for BK. He was saying that salary and benefits (including pensions) for public safety alone was 78% of their entire annual budget... I can't wrap my head around that!
Unless our BOS takes a hard line with our "hero's," bad things will be happening here if the retirement fund is only getting 1% when they where praying it would be 7.5%
The domino effect is hear: Stockton, Mammoth, San Barnardino, and tonight I heard Compton could file for BK in a couple of days. Our economy is ahead of theirs, at least for now. But Fillmore, Santa Paula, and Ventura are probably not far off. Once those go and the county starts picking up a tab if one or more of them unincorporates, how long before the county starts struggling ?
VintageRacer writes:
"Somebody splain to me why schools should be shorted, positions left vacant or eliminated, library hours reduced, roads not repaired, parks not maintained so the chosen few can all get 6 figure retirements?"
As I explained it in a previous comment, public pensions have to be paid first at the expense of services provided. I didn't make the law. I'm just explaining it.
VintageRacer writes:
The only way public pensions are going to change is for our elected officials to take some action and institute changes for employees hired after a certain date. THAT is an uphill battle that is, in my opinion, nearly impossible.
StillSickOfIt writes:
And yet when the fund was at 100% a few years ago, what did the County do? It stopped contributing. Maybe if the County had continued, it wouldn't be underfunded now. And I never got an extra tax rebate that year. What did they do with the tax money?
santarosa writes:
BTW: firefighters do not really fight fires much anymore:
http://marginalrevolution.com/margina...
"Firefighters" are basically a group of union thugs whose main purpose is to shake down taxpayers for outrageous pay and benefits. We would be much better off hiring emergency medical technicians that could be rapidly deployed to medical emergencies. Why do we send giant fire trucks filled with 120K per year frat boys to respond to little old ladies that fall at Wal Mart?
StillSickOfIt writes:
We should fire them all. There are plenty of people waiting to take their place, even though they apparently can't even spell "heroes".
rebel123 writes:
Does anyone care that the key global interest rate LIBOR index, from which all other interest rates fall out, was fraudulently depressed in order for banks to make more money for themselves? Anybody care that this fraud has kept interest rates lower than the market would have dictated? Apparently we're all too concerned about how much firefighters pensions will be to care about a scam of enormous proportions that has depressed all of our interest rates for our own investments and savings accounts as well as public pension plans. Yes, let's throw mud at the public employees and ignore that banks rigged the rates toward their own benefit and our loss.
TOaksLover writes:
& Our wonderful Board Directors (Linda Parks included) passed the billion + budget in 17 mins !! Their solution just keep raising fees, fines; FYI these are NOT taxes, fee for service..... + add regs to get MORE fees!!
NO Strickland for Congress!!!!
viking2265 writes:
But in the meantime, Moonbeam is beaming about his high speed rail Browndoggle. $BILLION$
Can't wait to take that first ride from Bakersfield to Madera...yahoooo!
santarosa writes:
Yes, I care. I have been writing on banking fraud since 2006. It is quite possible to be upset about Wall Street fraud AND the pension scam. They are both killing us.
BTW- Calpers is in bed with the fraudsters on Wall Street. Who do you think invests with the PE and Hedge Funds! Yes, your pension fund. Without the likes of Calpers these guys would be broke.
jjohnjj writes:
Everybody's 401k is in the tank too. Rather than blame the victims, let's motivate Wall Street to start earning money the old-fashioned way by throwing a few of their criminals in jail.
But don't count on sTrickland to work for transparency and accountability in the financial industry.
santarosa writes:
One more thing: the primary victims in the LIBOR scam were other banks. The depressed LIBOR rates probably helped pension plans as many of their investments are leveraged and their cost of money was lower with reduced LIBOR rates. Additionally, consumer credit rates were lower and as are nation is more of a debtor nation rather than a saver nation the reduced LIBOR rates probably helped the average American.
You are right to mad about the LIBOR fraud. You are just confused as to who was victimized.
And generally I would avoid berating people for not commenting on a topic that had nothing to do with the original story. Pension articles will generally have comments about pensions. Kinda makes sense, no?
C2ShiningC writes:
I don't begrudge state law protecting pension funds. But what is happening all over is that the taxpayers are being gaslighted into believiing "protection" means that they are required to augment those funds when self serving, horribly conflicted, pension boards award themselves "Alice in Wonderland" benefits based on unrealized high returns. They gloss over the fact that they are over $1 billion behind in pension obligations by saying "It has been about 80 percent funded, which rating agencies consider adequate." It is only 80% funded if the returns meet or beat 8% assumed returns.
Cy writes:
HERE IS THE SOLUTION
Instead of paying overtime to public safety employees pay them regular time and contribute the extra overtime kicker to fund their pension shortfall. They could be heroes!!!
smacktalk writes:
Just let Ventura County go bankrupt like the other cities. Contracts are null and void.
Hire new public workers at $60,000 a yr NO overtime and let them pay into their own retirement like most people do. If they don't want the job there are many unemployed people out there who would jump at the opportunity.
As for the county supervisors $ 75000 a yr and if the can't do their jobs or over budget kick their a-- to the curb, Next person who would like to try to keep things in check.
Mmikee writes:
The shortage is much higher than implied here. There are special averaging rules that they are allowed to use for public pensions that "smooth" these kinds of drops, so the true underfunding will not show for 3-5 years, then we will REALLY be in trouble. Everyone is hoping for a massive change by then, they will be out of office, or they will be retired. If they had to book the true liabilities as private companies do, BKs would be even higher and services would need to be cut even more today. The can is being "moved" down the road as everyone looks at the pretty sky above. ooohhh, pretty colors... :)
aasdf writes:
78% going to public safety, I can believe that. With all the pension spiking, pension increases, etc for the public safety employees there will be more cities filing BK.
This day for forecasted long ago so don't say no one was warned. You simply can't hand out lavish pay/benefits (based on union clout and NOT on market conditions) and expect there to be no fall out.
http://www.ocregister.com/articles/pe...
We need to fix the problem NOT the symptom.
Serious pension reforms, eliminate pension spiking, reform workers comp rules for public safety, transition to 401k plans, voter approval on all raises, scale back excessive overtime, etc.
Gee thats how the private sector operates.
In the public sector there are no check and balances, if you blow your budget simply cut back services and/or raise taxes.
That is exactly what we are seeing today.
In the private sector your company would be eliminated.
aasdf writes:
And its a complete joke for deputy's to pay ONLY 2.5% toward their lavish pension. Previous articles about the CHP state their pension cost near 40% of a officers pay. VCSD is probably close to that.
At the minimum they should be paying 20% of their pay.
Same goes for the fire department.
And you wonder why we are sooooo broke!
BingoBobo writes:
Its very easy to get around the having to pay them out instead of paying for services.
Simply pass a new law that states any income derived from a PUBLIC pension above the median income for said city or county is taxed and a certain rate
i.e. Just guessing but lets say ventura county median income is 75K. then work it like this.
Pension is 75K or less no tax
Pension is 75K-85K tax that portion at 20%
Pension is 85K-100K tax that portion at 40%
Pension is 100K-120K tax that portion at 60%
Pension is 120K+ tax that portion at 80%
use this money to fund the pension system and viola. Now spiking etc has less benefit and those with lower pensions will get theirs while those abusing(firefighters) get alot less.
And this would be legal and ok in the CA constitution. TAX where the TAX should be not on private sector workers through sales and income taxes, Not taxing the poor via sales taxes, not taxing business which this state desperately needs. Tax those that are creating the problem and ABUSING it with spiking.
calandman writes:
The reality for Ventura County retirees is exceeding bleak. Retirees will be lucky to receive 20 cents on the dollar and if the compensation for Madoff victims are any indication that is very optimistic. When Ponzi schemes end the money runs out fast. Many like to think that because pensions are legally and constitutionally protected that somehow pensions are safe. Currently the Postal Service is approaching default on a legally required $5.5 billion payment for future retirees. No legal comfort there. What can’t go on forever, won’t.
notsomuch writes:
Be prepared.
StillSickOfIt writes:
Wow, based on the comments here, the County is going broke, services are being slashed to fund jobs that anyone would jump at a chance to do. Let see if there is anything to support those claims.
REALITY (Ironic Screen name)- “if you blow your budget simply cut back services”
Supervisors approved a $1.72 billion budget for the next fiscal year, marking the third year in a row WITHOUT MAJOR CUTS IN SERVICES or jobs in county government.
Read more: http://www.vcstar.com/news/2012/jun/1...
- vcstar.com
Smacktalk-“Hire new public workers at $60,000 a yr NO overtime and let them pay into their own retirement like most people do. If they don't want the job there are many unemployed people out there who would jump at the opportunity.”
Here is an article about County hiring challenges even now with the current great pay and benefits. You think you would get more by paying less and slashing pensions?
Some local law enforcement agencies now face a new challenge: FILLING VACANT POSITIONS. http://www.vcstar.com/news/2012/may/2...
- vcstar.com
Simiwayne- “Yes, time for BK that's really the ony (SIC) answer at ths (SIC) point.”
TK421- “Unless our BOS takes a hard line with our "hero's, (SIC)" bad things will be happening here”
REALITY - “And you wonder why we are sooooo broke!”
Here is an article about County government's solid finances.
Read more: http://www.vcstar.com/news/2011/may/2...
- vcstar.com
And one about County's taxable sales up 5.2 percent in first quarter
Read more: http://www.vcstar.com/news/2012/jun/2...
- vcstar.com
Hmmm....
auret1#232805 writes:
In FY 2011:
59 general county employees with 5 to 9 years of service retired with an average pension of $14,028.
28 general county employees with 30+ years of service retired with an average pension of $77,928.
10 safety county employees with 5 to 9 years of service retired with an average pension of $25,068.
24 safety county employees with 30+ years of service retired with an average pension of $147,372.
C2ShiningC writes:
They actually have $3.2 billion? A 1% return is $32 million and they need $5 million from the county general fund to make it 8%? What kind of math is that? According to those numbers they will need another $224 million, not $5 million.
Look at it another way. If it only takes $5 million to make up a 7% shortfall, then the value of the fund cannot be $3.2 billion. It would be more like $71.4 million. How much is this 'investment guru' being paid to phony up these numbers for the pension board to dissiminate?
StillSickOfIt writes:
Here is an idea, read the link I provided about recruiting issues. People aren't "lining up" now.
Is 100K more than what you make now doing whatever it is you do?
gafbowillie writes:
I too have seen the excesses of unnecessary 'Firefighters' at many traffic accidents. In one case I witneesed 8 'Firefighters huddling around a gurney with a guy that had been dead all morning from a one car accident. They had the large rigs out there and it could have been handled adequately with one small truck and two guys...
lavern writes:
TOLD YOU SO! bet public employees, jerry, and the sacramento democrats still don't believe this. what do you think? NOTHING WILL CHANGE IN CALIFORNIA! that is until we declare bankruptcy.
goodwin21 writes:
1. Wasn't this the same guy that last year was congratulating himself because funds gained by 35%, even though the previous years they lost 50%? People do the math, Defined Benifits plans are pyamid schemes. They can't work, you cannot contribute enough money to pay employees the same as they were making the last day they worked for the rest of their lives.
StillSickOfIt writes:
Soooo... Wait.. Huh? In one sentence you say people are not lining up because they only advertise base pay at 45K yet then you say "I think if the Army can find people willing to get blown up by roadside bombs for less than 20K, we should be able to find a cop for $100K." I would think they would also apply for the 45K, which is double what they make now. (Unless you figure in the housing and food)
And are you sure they "all" get "at least" 100K with overtime. And if everyone knows this, and the great pensions, job security, etc, why aren't they getting applicants?
You never answered whether you make more than the Cops and Firefighters do.
guy133 writes:
Actually, I'm not sure it's any different. The public employee may actually perform a service, but when you include their salaries and pensions, they are being paid close to double what they are worth.
aasdf writes:
So you are going to guarantee me the county will not have to raise taxes and/or cut back services?
Pension cost are forecasted to rise much faster than revenue in the future unless reform is put into place.
BTW my comment was not just about this county but also city/counties/states all throughout the US.
At the state level there is $500B in unfunded pensions. When this bill comes due you better believe the state will again ask for a tax increase AND will cut back services.
Just look at the current state climate. We have a budget that is in the red EVERY YEAR. More tax increase iniatives on tbe ballets, more cut backs, etc.
Cities ALL OVER filing bankruptcy Stockton, San Bernardino, Vallejo etc. Compton is next, city of LA is having a hard time affording its workers pensions, etc.
Taking a look at one of your articles, $750,000 for 5 positions works out to $150k each (not including overtime). By the time you consider all the extra benefits they get its closer to $200k each. Don't whine next time a city says we can't afford to hire any more cops.
Also 300 applicants DOESN'T mean NO ONE is applying. Give me a break.
The whole industry needs to be reformed, from the DA office all the way down to the beat cops/prison guards.
No irony in my screen name.
StillSickOfIt writes:
Pfft. So you claim your comment ““And you wonder why we are sooooo broke!” was not just about this county but also city/counties/states all throughout the US. Even though it is an article about the County pension? That’s like me saying that “there is plenty of money in the coffers and the pensions are fully funded” and when someone calls me on it, I say, “I was talking about Beverly Hills!” Please.
“Also 300 applicants DOESN'T mean NO ONE is applying. Give me a break.”
I never said NO ONE is applying, just posted a link that showed local police agencies are having fewer turn out than they used to. Which counters the claims that in these hard economic times, you would get plenty of people to apply for these jobs even if you paid them less or slashed their pensions. Maybe you should take a break.
StillSickOfIt writes:
“As far as the difficulty recruiting, not sure the reasons.” But you sounded pretty confident that “There will be qualified people lining up for the job” if they offered “$100,000 per year for a cop SALARY and a 401K.” According to you, they have better than that now. And yet the article I linked to shows that they have issues attracting applicants. Your answer to that? Quotas? How do quotas cause fewer people show up to test for these hirings than in the past?
And you would think someone who presumably lives in one of the safest cities in the nation and makes over 100K himself or herself would have less of an issue paying their cops and firefighters well and giving them great pensions. Do you even know what the per capita cost of law enforcement for Simi Valley is? Google it. You probably pay more for auto detailing.
DESIGNR writes:
A few years ago? When?
aasdf writes:
LIKE I STATED BEFORE ARE YOU GOING TO GUARANTEE US NO TAX INCREASES OR SERVICE CUTS WITHOUT ANY FORM OF PENSION REFORM?
But your money where you mouth leads you.
rebel123 writes:
Pension funds routinely hold income-generating securities in which payments are based on the LIBOR rate and thus could have been and probably were cheated out of revenue due to this scam. While you chastise me for not dwelling on pensions, I would like to point out that my comment was made to suggest that in stead of mounting all these ad hominen attacks upon the firefighters and other public employees maybe we should direct our energy toward true criminal conduct that has affected all of us negatively, including public pension funds. It was not just the banks that were "victims" here, my friend. Banks did this to themselves, remember? By messing with the LIBOR benchmark rates that are tied to an estimated $800 trillion of securities, the offending banks essentially played with matches in the middle of the world's largest house of leveraged cards. The combined gross domestic product of all the nations of the world is only about $70 trillion, so the towering mountain of LIBOR-connected securities out there climbs into the realm of leveraged derivatives like those that nearly brought the global financial system to its knees at the height of the 2008 credit crisis. First by building that leveraged house of cards in the first place on a completely obscene scale, and then by shaking its very foundation by manipulating the interest rates on which all that paper is based, the rate-rigging banks took unthinkable risks with the fate of the entire global financial system. If you own stock, the LIBOR rate very likely affected your return on investments. Adjustable rate mortgage loans, car loan, even corporate debt was affected by this. Calling banks "victims" is laughable.
I would also like to posit that while many of the comments here have the common thread of detesting public pensions, the other common thread is the unrelenting personal attacks along with volleys of insults aimed at the people who are getting those pensions. Please tell me how personal attacks add to the debate? Those receiving these pensions did nothing illegal. I challenge anyone here to say they'd have given up the same pension plan without a struggle.
aasdf writes:
You just don't get it.
You think VC lives in its own soverign land with no ties to the outside world.
Let me open you eyes for you. The state's problem direct AFFECTS our county. When the state has money issues (practically every year) they literally take monies awaay from the city/county.
The state has a huge pension crisis.
Like I said before we need PENSION REFORM. Make all employees pay their fair share, not only a few percent.
StillSickOfIt writes:
So is that it? Carrying a grudge for a ticket you once got? I would like to know what your career field is that you feel it is acceptable to earn 100K but it is total unreasonable for someone who will come to your house should you call 911 to do the same.
StillSickOfIt writes:
Oh I get it alright. You post false information hoping nobody questions you, and if they do, you just claim that it was a misunderstanding or you were referring to something else.
Are we going to relive the whole fake disability claims debacle we went through back in November? Were you made claims that you failed to support.
So you can admit that there is nothing that shows Ventura County (Which is the focus of this article) is broke?
ceeyh805 writes:
Federal Bankruptcy judges can do absolute magic, magic is all the check collectors have left.
StillSickOfIt writes:
I think it was in great shape up to 2007 or 2008, right before the crash. In 2001, the deputies’ union alleged that in 1996, the County stopped contributing its portion into the fund because it was fully funded.
Although employees had continued to make their required contributions into the system, the county, a lawsuit alleges, had made no contributions in its capacity as employer since 1996, and had relied on the excess earnings in the system to excuse its own payment obligation amounting to approximately $20 million per year into the general fund.
The State did the same thing with Calpers. It’s called a pension holiday. My question is, did it save the tax payers anything? If so, where did that money go? And had they continued to contribute, would the fund have been “overly” funded and would there be less of a shortfall now?
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