• This means that cities will see their required pension payments rise — between 1 percent and 2 percent for general workers, and between 2 percent and 3 percent for more expensive public safety workers, beginning next year, according to a CalPERS “warning” that went out last month.
• Throw in price inflation and wage inflation, and you’re looking at cities and the state paying pension bills that are 4 percent to 5 percent higher for general workers, and 7 percent to 8 percent higher for public safety workers, CalPERS said.

We’re hearing one thing from city types on this development: Ouch.

“Many public agencies are concerned that this change in the discount rate will cause considerable financial hardship to already financially strapped local budgets,” the League of California Cities said of the change.

But it’s not just cities.  State and schools employer contributions will increase by 1.2 to 1.6 percent for general workers and 2.2 to 2.4 percent for safety workers, CalPERS said in a statement Wednesday.

That’s expected to cost the state $303 million.

Schools will see an increase of $137 million.

And you may have heard that the state budget is not in the most robust health.

For nearly a year, Ventura County officials have portrayed their pension system as conservative and reasonable by almost every measure.

And for the same year, the Ventura County Taxpayers Association has described the retirement benefits offered to county government’s 8,000 employees as excessive and easily abused, particularly in the case of high earners.

The dichotomy exists in a system of extremes, according to surveys of 19 counties that run independent pension programs like Ventura County’s.

Ventura County offers one of the lowest retirement formulas for civilian employees in California, based on those surveys. For employees hired since 1979, the county fell beneath every one of the 19 counties but Kern as well as city governments in Oxnard, Camarillo, Santa Paula, Simi Valley, Thousand Oaks and Ventura.

Ventura and Sonoma are the only counties among the 20 independent pension programs that provide no cost-of-living increases for these retirees. Almost 80 percent of Ventura County’s current workforce is covered by that retirement program.

The retirees — who are enrolled in the program known as Tier 2 — collect average pensions of $18,000 a year in addition to Social Security, a county report shows. Those retired in the past five years averaged $23,000.

“The average check to nonmanagement Tier 2 employees in my understanding is around $1,400 a month,” said Keith Filegar, a former union chief who now manages real estate services for the county. “What’s $1,400 a month going to be worth 10 years from now?”

The Board of Supervisors also refused to adopt higher benefit levels for sworn officers and expensive retiree health plans — both major expenses elsewhere.

But Ventura County offers one of the most generous formulas for counting the total compensation upon which pensions are based. That lifts pensions for firefighters, sheriff’s deputies and other sworn officers $10,000 to $15,000 above the averages in San Diego, Santa Barbara and Kern counties, personnel officials say. And in the view of the taxpayers group, the compensation has driven up pensions for top-paid managers beyond reason.

‘CONTROLLING SPIKING’

County Executive Officer Mike Powers agrees that the compensation is high compared with similar counties but says it’s already been reduced with a change in retirement contributions. In coming weeks, Supervisor Peter Foy said he’s hoping for more reforms, including the possible elimination of a policy that allows employees to boost their pensions by cashing out vacation time.

The provision allows employees to save up weeks of unused vacation time, then sell it back for cash before they retire. Tens of thousands of dollars can then be applied to the final compensation on which pensions are based, spiking their retirement checks for life.

“Controlling spiking is the No. 1 issue we all want to deal with,” Foy said.

Managers and employees took the benefit in lieu of raises, but the taxpayers group says that just hides compensation and leads to pension spiking.

Last year, the Board of Supervisors suspended the cash-outs for new management hires but said the right was vested for current managers.

Managers can cash in up to five weeks of unused vacation within a calendar year to supplement their salaries at what’s called a “grossed up” rate — 133 percent of pay to cover the benefits that would have been paid if they had taken the day as vacation.

The 200-member taxpayers group has chided the board for allowing the “gross up” and wants to curtail high-dollar pensions.

“The pension system works very well for the rank and file,” said Bill Wilson, treasurer of the association and chairman of the county Board of Retirement.

“Where it has gotten off the track is management and safety. What concerns me is why do we have so many of these super-high pensions?”

Twenty-four county retirees drew pensions exceeding $200,000 a year, according to a public record released last year after the taxpayers association prevailed with its lawsuit seeking the information. That’s three times the total reported by retirement systems in Santa Barbara, Kern, Sacramento, Fresno and San Mateo counties combined.

Attorney Jim McDermott, a board member of the taxpayers group, sees the starkest example of outsized pensions in a comparison with the vast California Public Employees’ Retirement System.

A little more than 100 people draw $200,000 pensions in the system, which has 100 times as many members as Ventura County’s, a recent report shows.

Former managers in the Sheriff’s Office account for half of the $200,000 group, including former Sheriff Bob Brooks, former Undersheriff Craig Husband and several chief deputies. The others were top deputies in the Fire Department, attorneys and administrators in the County Executive’s Office, Probation Agency and Health Care Agency.

Retired Sheriff’s Chief Deputy Kathy Kemp is in the mix after a 29-year career in the county’s largest law enforcement agency. Kemp said she didn’t sign on as a young sheriff’s deputy for the pension, but certainly valued it as she got older.

Kemp, who retired in 2008 at age 60, said she feels fortunate to have it.

“I have been blessed,” she said. “There is no doubt.”

Kemp rose through the ranks to become commander, Thousand Oaks police chief and division chief. In her last assignment overseeing detention, she ran a division responsible for holding almost 1,700 inmates in three jails, transporting tens of thousands of prisoners to court and state prison each year, and maintaining courtroom security.

County officials say there are only 22 people with $200,000 pensions when a temporary cash benefit for health care is excluded. The money is not part of the pension and is paid separately by the county. But all 24 top-tier retirees are entitled to an annual cost-of-living adjustment — generally about 2 percent to 3 percent per year to account for inflation — making it possible for those pensions to double in their lifetimes.

Others who still qualify for COLA raises are civilian workers hired before 1979 and all public safety officers. The raises were ended in 2001 for elected officials and senior managers who can be fired without cause.

RISING CALLS FOR REFORM

The taxpayers group, state legislators and Gov. Jerry Brown have been calling for change in benefit levels and contributions.

But they must wrest with a system developed over decades, prized by public employees and often locked into laws and contracts. Locally and around the state, a 1997 ruling known as the Ventura decision was key in boosting pension checks.

The Ventura County Deputy Sheriffs’ Association sued to get an answer on what counted as compensation that could be credited toward retirement. The state Supreme Court ruled that virtually anything paid in cash did.

Besides base pay, it includes extra pay for advanced degrees and certifications, overtime that’s scheduled as part of the workweek, and cashed out vacation time.

The county fought to exclude some of those costs, but lost.

“Cash was king — all cash, it doesn’t matter if you’re the only guy that gets it,” said Leroy Smith, the county counsel and a specialist in labor law. “That changed everything.”

The ruling applied to all 20 counties with pension systems regulated under what’s called the 1937 Act, a group that includes Ventura, Los Angeles, Santa Barbara and Orange. But Ventura County’s costs also rose because of two other expenses that preceded that decision: payments of certain retirement contributions and a cafeteria plan for buying health coverage.

Under what’s called the “pick up,” county supervisors authorized paying part and sometimes all of the workers’ contribution to their pensions. The strategy was offered in lieu of raises, preventing overtime from increasing.

Those two items have been counted in county employees’ compensation since at least 1989. Stephen Silver, the Santa Monica attorney who represented the deputies, doubts they can be dropped for current employees because they are vested.

But the retirement contributions are going down now because employees are picking up more of the cost. That removes those dollars from total compensation because employees are paying it, not receiving it.

Workers started pitching in more when county government was forced to cover pension fund losses after the market plunge in 2008.

Supervisors OK’d deals in which employees will pay most of the contribution, set at 5.73 percent of earnings for most groups. Exceptions lie in unions representing sheriff’s deputies and firefighters. The government had been covering all of the amount for these groups, set at approximately 12 percent of their earnings. Those employees are now paying 2.5 percent of the total; new hires pay 4 percent.

Powers ties the county’s higher compensation for pensions to the Ventura decision, the retirement contributions and the “grossed up” vacation cash-outs that don’t appear to be common elsewhere.

Supervisors are focusing on the cash-outs as part of their pension discussions. They already have acted on retirement contributions and cannot do much about the court decision, county officials said.

Powers said Ventura County is in better shape than many of the other 20 counties that run independent pension programs, with a 2010 analysis showing its retirement costs are 22 percent of total payroll — fourth best. Officials say their finish is really better than that because they owe no money on bonds to finance their pension debts, as counties ranked above them do.

Powers views pensions as an important part of compensation in a fiscally strong government. He says employees are key to county government’s success, adding that it has survived the economic slowdown without any major cuts in services or substantial layoffs.

“We do really have a great cadre of people here,” he said. “You want to have appropriate compensation for talented people.”

SOMETHING TO WORK FOR

Retired social worker Jolly Slaby, 65, said the pension helps her stay independent.

With Social Security, she receives three-fourths of the $72,000 gross income she earned as a master’s degree-trained social worker helping abused children and their families.

“One of the incentives to work in jobs like my job is the benefits,” said the Simi Valley resident who retired in June after an 18-year career.

“After so many years, we can say it was worth it. I helped families. In addition to that, I can have a decent pension to be able to live on my own.”

Some county officials prefer to wait for the state to act on reform to avoid losing a competitive edge in attracting job candidates from other city and county governments. Sheriff Geoff Dean said he certainly would hate to lose ground in the battle for new deputies. He said he already has to overcome resistance to a lower formula for safety pensions than other areas provide.

Safety pensions account for half of the county’s pension expenses, while those employees account for about 15 percent of the total workforce. The average pension for safety retirees is $80,000 overall, and $92,000 in the last five years. They get bigger pensions because they don’t qualify for Social Security, work longer than civilians and risk their lives, county officials say.

The head of the deputies’ union doesn’t see much need for changing the system.

“It works,” said Sgt. Matt Findlay, president of the 740-member association.

He expects to get 87 percent of his compensation of $151,000 when he retires in another year at age 55. That would put his pension around $131,000 after 34 years on the job.

“I wanted something at the end,” he said. “Because this is a defined benefit, I knew there would be something down the road.”

The driving reason for reforming pensions is cost — and some would argue rising resentment among the taxpayers who are paying part of the cost for public pensions but won’t get their own. Some call it pension envy.

“Most pensions of private-sector employees have been decimated over the last several years,” said Silver, the Santa Monica attorney. “All of a sudden everybody’s jealous because public employees have a defined benefit plan.”

Rick Shimmel, executive director of the Deputy Sheriffs’ Association, says the blame is misplaced.

“The private sector has abandoned its obligations to employees to provide secure retirements,” he said. “I think that’s criminal. Private businesses have given that up for short-term profits.”

The pension fund covering county employees has $3.2 billion in assets to cover $4 billion in liabilities, leaving it 80 percent funded.

Retirement board members bank on an 8 percent annual return, something they have achieved over time despite the highs and lows of Wall Street. The association paid out $180 million in pensions last year, double the amount in 2002. Over the period, the number of beneficiaries has grown 50 percent as the massive baby boom generation began entering retirement.

The fund remains strong as long as the market does, said Rick Roeder, an actuary who analyzes funding assumptions for public pension plans in California. “If the market doesn’t do well, there’s going to be ongoing issues.”

From the VCStar. County Executive Officer Mike Powers defended Ventura County government’s pension benefits as among the most reasonable in California at a dinner Thursday sponsored by a taxpayers organization that has pushed for new controls.

The Ventura County Taxpayers Association in March proposed more than a half-dozen revisions to lower the public’s pension liabilities. The Ventura County Board of Supervisors responded in April to one of those proposals by suspending cashouts of vacation pay for new managers, a benefit that raises retirement checks.

No other changes have been made, which county officials say is a natural result of legal and labor concerns. Managers, employees and the Board of Supervisors, however, have continued to discuss various proposals.

Powers told the taxpayers association he first needed to find out where the county stands in comparison to cities and counties with which Ventura County competes for employees.

“We’re looking through these issues,” Powers said in his keynote speech before 100 people at the association’s annual dinner at the Las Posas Country Club in Camarillo. “The first thing we wanted to do was look and see where we are.”

Powers made the remarks during his State of the County address, which county CEOs regularly give to community groups. He focused much of his speech on county government’s services, strengths and health, noting its balanced budget and 10 percent reserve fund. In contrast, many other counties have been forced to cut jobs and put workers on furloughs, he said.

He also produced an array of charts, some showing new data on the average pension benefit drawn by county retirees. That benefit has been a sore spot for the taxpayers association, which won a lawsuit last year that forced the release of the names of county government retirees drawing six-figure pensions.

The public records showed more than 300 retirees were collecting more than $100,000 annually, for a total of $42 million a year. Their monthly pension checks often exceeded base pay in their final years of employment.

Powers presented figures showing that fewer than 8 percent of retirees are in the six-figure circle. On average, county government retirees are collecting $35,000 annually after 18 years on the job, he said. When only those retiring since 2006 are considered, the average increases to $42,000 and 19 years of service.

But the numbers vary sharply depending on the type of employee. Public safety retirees — sheriff’s deputies, district attorney investigators, probation officers and firefighters — have an average annual pension of $80,000. The figure grows to $92,000 if only those retiring since 2006 are considered. Public safety employees are not eligible for Social Security and work longer than civilian employees, 24 years on average.

Civilian employees who retired in the last five years but were hired after 1979 average $23,000 a year, while those hired before then average $62,000. Civilian employees also are entitled to Social Security income.

The pre-1979 employees enjoy better pensions partly because they get cost-of-living adjustments. Public safety employees get cost-of-living raises no matter when they were hired. Over 24 years with a 3 percent annual increase, those adjustments will double an individual’s pension.

Powers said the county has one of the lowest pension burdens at 22 percent of payroll, offers no retiree medical benefits and has a relatively low rate for figuring pensions. The county does not pay the so-called “3 at 50″ that allows a police officer to retire at age 50 at 90 percent of salary, for example.

But the taxpayers association says the so-called “add-ons” in the county’s pension formula can make that irrelevant. Overtime, longevity bonuses given after 30 years of service, cashouts of vacation pay and education credits and other benefits boost total compensation well beyond base pay, putting the county among the highest in California for final compensation on which pensions are based.

After his address, the audience quizzed Powers on how much employees were paying into their pensions and the pace of change.

“I have seen no meaningful change in the last year,” said Jim McDermott, a board member of the taxpayers group and the attorney who represented it in its pension lawsuit.

He doubted change would materialize when managers and elected officials have a direct interest in maintaining the status quo because they collect pensions themselves.

“I think we’ve already seen change,” Powers responded, adding that discussions are under way for others. “We do need to make some adjustments.”
Read more.

The Ojai City Council took the first step Tuesday night toward eliminating lifetime health care benefits for future council members.

After several failed attempts at crafting a motion, the council asked city officials to create a resolution barring future council members from receiving lifetime health insurance. While on the council, they would receive coverage for themselves and not their dependents.

The council voted 3-2 for that plan, with Carol Smith, Sue Horgan and Carlon Strobel approving and Paul Blatz and Betsy Clapp dissenting. The council is set to consider the resolution Jan. 24.