Committee files pension reform initiative to bring down Ventura County's $1 billion in pension debt
- By Josh Altic
On January 16, 2014, the Committee for Pension Fairness, with the support of the Ventura County Taxpayers Association, filed an initiative they are calling the "Sustainable Retirement System Initiative" in an effort to bring down the California county's $1 billion in pension debt not backed by pension fund assets and to control the ballooning annual pension costs of the county, which have grown by 260% from $45 million in 2004 to $162 million in 2013, amounting to 17% of the county's entire budget. The Committee's proposal, if approved on the November 4, 2014 election ballot, would change the pension plan of newly elected officials and newly hired employees from the current defined benefit plan to a 401 (k)-style, defined contribution plan. The initiative was designed to guarantee county contributions to employee retirement accounts, which accounts would be under the control of the individual employee and would be entirely portable. The measure would not require any "matching" contribution from the worker, but would allow the employee to contribute as desired. The proposed plan would also limit pension-based salary increases for five years, seeking to reduce allegedly immoderate pension payouts. If approved, the new system would apply to all county employees hired on or after July 1, 2015.
According to the Committee for Pension Fairness, four fifths of county retirees get pension payments of over $100,000 per year, which is more than they earned while actually working. The Committee says this is caused by pension spiking, the practice of including unused vacation time, sick pay and other saved benefits in the final salary figures used to determine the amount of their pension. David Grau of the Committee for Pension Fairness, concerning the rising pension costs of the county, said, “This impacts all residents of Ventura County. We’re trying to create a fair and sustainable system for everyone going forward instead of pushing the debt onto our grandchildren, our goal is to eliminate the $1-billion liability over time.” Ventura County Supervisor Peter Foy agreed with Grau, saying that the pension system in place may be causing shortchanges to public safety, schools and libraries because of how much of the budget is taken up by county contributions to the pension fund. Foy said, “It’s getting very expensive. (The measure) is a tremendous step forward in getting financial control going forward for new employees. It’s the right thing to do.”
Sheriff Geoff Dean is among the critics of the initiative and thinks the dangers of pension debt are being exaggerated. He said, “The county has done an outstanding job managing its budget. It has the highest bond rating possible." He went on to criticize the initiative itself, arguing that it would hurt public safety rather than help it since the altered pension benefits would make the county less attractive to quality public service officers. He said, “It’ll certainly be detrimental to my ability to try to recruit and retain qualified people. It’s really not a good idea, especially in the area of public safety.”