Ventura County’s contributions to the Ventura County Employee Retirement Association have increased over 327 percent in the last decade and are expected to climb about 20 to 25 percent each year over the next several years, according to a report released Wednesday by the Ventura County Grand Jury.
The pension contribution during fiscal year 2008-2009 was about $140 million, according to the report.
To rein in the county’s increasing pension costs, the grand jury has recommended voters decide on future increases to retirement benefits, according to the report titled “Ventura County Pension: An Uncontrollable Cost.”
“Increasing pension costs are stressing the county’s budget,” the report states.
The report cites a number of causes for the rising costs, including the Ventura County Employee Retirement Association investment results, employee salary increases, county payment of employee retirement contributions and not using excess earnings to offset losses.
Ventura County Chief Executive Officer Marty Robinson agreed with the reasons for costs increasing and said the county’s Board of Supervisors have long taken a strict stand against expanding benefits, which has put Ventura County in a better position than other counties.
“The board has been very responsible in terms of not expanding benefits,” Robinson said. “We took a very difficult position when the rest of the state was increasing benefits.”
The grand jury commended the board, recommending that it not expand benefits.
The report, however, took issue with the Ventura County Employee Retirement Association’s practice of using excess earnings to supplement benefits for existing retirees. Excess earnings are earnings on investments over 10 percent. The association has the sole discretion to use those earnings how it sees fit.
When those earnings have been made the county has encouraged the association to hold onto the extra income and use it to offset losses in leaner years. The county has to increase its contributions to make up for the loss of funds.
“We don’t want excess earnings given out in benefits,” Robinson said. “We think it should be used to reduce overall cost. ... Every time they do something like that we fight them.”
The grand jury recommended the association retain excess earnings in a fund. The association’s executive director was unavailable for comment.
In recommending that the county allow voters to approve future increases in retirement benefits, the grand jury cited San Diego, Orange and San Francisco counties as examples. San Francisco’s requirement for voter approval for pension benefit increases has been a part of its charter since 1889. The other counties adopted their requirements in the last three years.
Robinson pointed out that the voter requirement in Orange and San Diego counties was adopted after those counties suffered heavy financial setbacks because of decisions to increase benefits.
“I think that’s a result of people giving away benefits,” she said. “Those are the ones that gave away stuff and now they are trying to get it back.”
Responses from the Ventura County Board of Supervisors and the Ventura County Employees Retirement Association are due within 60 days.
To view the report, visit: http://grandjury.countyofventura.org.
http://www.venturacountystar.com/news/2009/jun/11/grand-jury-recommends-voters-ok-pension/
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