|San Bernardino County Board of Supervsiors Table Pension Reform Proposals ||08/06/2012
|SAN BERNARDINO, CA — Citing concern over potentially hindering contract negotiations with labor unions and the threat of litigation, the San Bernardino County Board of Supervisors on Wednesday tabled proposed ballot measures aimed at reforming pension plans.
Supervisors Janice Rutherford and Neil Derry proposed ballot measures for the Nov. 6 election that would require voter approval of any retirement benefit increases, have employees pay more into their retirement plans, change the retirement formulas and prevent pension spiking, among other things.
The board's concerns Wednesday centered mainly on an obligation to first meet and confer with its labor unions about the proposed changes and hindering ongoing negotiations with the unions - the San Bernardino County Safety Employees Benefit Association (SEBA) and the San Bernardino Public Employees Association (SBPEA), which represent public safety and general employees, respectively.
"We have to discuss with our employee groups any changes we want to make to the retirement system," Rutherford said. "We would be violating that process and therefore be jeopardizing anything put outside that process. We can perhaps revisit these topics once we meet with our employees groups."
It means taxpayers will not decide on Nov. 6 whether the county's retirement system gets an overhaul.
Derry said he was disappointed because reforms are needed to stem the rise in the county's retirement costs. In 2011, the county contribute $232.3 million to its retirement system, he said.
"I think the voters have a right to have a say in this," he said. "I think we need to move now rather than later, and I didn't see any reason for the delay."
Rutherford is proposing, among other things, that any retirement benefit increases or changes to formulas used to determine benefits first be approved by voters.
Among Derry's proposed reforms are changing the retirement formulas for public safety employees from 3 percent at age 50 to 2 percent. In other words, once an employee becomes eligible for retirement at 50, the annual pension benefit would be based on 2 percent of the average of the three highest paid years on the job, multiplied by the number of years on the job.
Derry also has proposed that all employees pick up the 7 percent share of what the county now pays into their pensions.
The county has been involved in exhaustive contract negotiations with SEBA's Safety Unit, which includes sheriff's deputies and district attorney's investigators, since September.
Before Wednesday's board meeting, the union agreed to the county's recommended concessions, which included members picking up the county's 4.72 percent contribution to their pensions and a 2 percent at 50 retirement formula for all new hires.
Current members will retain their 3 percent at 50 retirement plan, SEBA President Laren Leichliter said.
Leichliter said the bargaining unit will vote on the proposed concessions next week.
"I'm assuming that between the (potential) litigation and knowing we had (accepted) an offer, I think those are probably the two reasons they made the decision they did," Leichliter said of Wednesday's board action.
Derry couldn't agree more and believes those directly involved in negotiations with SEBA influenced the board's decision.
"I think this outcome was manipulated by staff," Derry said.
The county's labor contract with the SBPEA, which represents roughly 11,000 general employees, isn't up for renegotiation until 2014.
Derry stressed at Wednesday's meeting that SBPEA officials have been adamant that their members will not agree to pick up the county's 7 percent contribution to their pensions. It was one reason Derry said the county should press forward with his ballot measure.
For the county's general employees, Derry is recommending their retirement formulas change from 2 percent at 55 to 2 percent at 62.
SBPEA General Manager Bob Blough couldn't be reached for comment Wednesday.
Poor market performance has contributed to the county's pension fund being underfunded by more than $1.7 billion. Pension costs in the county have grown from 3.1 percent of total county expenditures in 1999 to 9.5 percent in 2011.
If the market continues the way it has over the next two years, the county's retirement system could be close to 50 percent underfunded, Derry said.
"That's getting close to insolvency," Derry said. "Without changing the pension formulas, without limiting the impact of spiking...and without employees paying into the system, we're not going to make it. It's that simple."
Nelson, Joe. "San Bernardino County Board of Supervsiors Table Pension Reform Proposals". DailyBulletin.com. August 1, 2011. http://www.dailybulletin.com/ci_21214112