[San Mateo County] Report: Most pension funding on track

Grand jury examines unfunded debt; finds room for improvement remains

A majority of the cities in San Mateo County have funded at least 75 percent of their unfunded pension liabilities, according to a recent civil grand jury report.

More work should be done though to assure the retirement benefit plans are entirely addressed, said the report issued Tuesday, June 27, as cities across the state continue grappling with the large, looming debt obligation.

San Mateo County is the torch bearer in leading the charge to pay down its pension cost, as officials funded 87 percent of the county government’s post employment benefit fund, while Belmont, Daly City and Half Moon Bay are the only local cities with at least 80 percent of the cost set aside in the 2015-16 fiscal year.

Almost every other city addressed at least 75 percent of its pension debt, except Redwood City, San Mateo, South San Francisco — all of which paid at least 70 percent of the fund — and San Carlos, which accounted for 67.4 percent.

The report also indicates some cities slowed their pension plan funding in 2015-16, causing the liabilities to tick up from the year prior, and the report expects the amounts to grow again in the next fiscal year. Meanwhile, the county has been so successful in paying down its debt, the report projects it is reasonable to expect full funding by 2024.

Addressing pension liabilities are vital, because if investment plans prove insufficient the outcome could result in increased taxes and fees, less money for government services or municipal bankruptcy, in the worst-case scenario.

The grand jury accumulated its data largely through surveying comprehensive annual financial reports released by cities or the county, which can be problematic for accessing the most recent information as there are reporting inconsistencies between each agency.

The purpose of the most recent report is not to call on agencies to reply or examine their liabilities, but rather to serve as a reference point for potential future investigations, said the report.

“The determination of the aforementioned baseline of data is intended to assist in examining funding progress for local government agency defined benefit plans and other post-employment benefits within the county in future years. Future grand juries, and others, may build upon the baseline if they choose to revisit benefit funding trends,” according to the report.

The information collected by the grand jury offers a baseline for the first two years of a new state standard for defining pension plans, and another similar method will soon go into effect next month.

June 28, 2017

The Daily Journal

By Austin Walsh