Tuesday, July 10, 2012 – 11:30 a.m.
Last Modified: Saturday, July 14, 2012 – 01:30 p.m.
The County of San Bernardino is about to take its turn in the pension bucket this year. A bucket likely to further pressure budget balancing measures.
The problem?
The San Bernardino County Employees Retirement Association (SBCERA), the county’s pension fund, at its latest actuarial update, was underwater by $1.7 billion and climbing, according to county sources.
The amount is what is needed in order for the system to pay 100% of all its obligations.
As of March 31, 2012 the fund had just over $6.1 billion in assets.
Currently the fund is below the 80% funding level considered to be stable. A level projected to fall below 70% next year.
Of concern is the fact that recent investment performance is likely to worsen the situation.
In order to maintain and pay all obligations, SBCERA assumes it will earn 7.75% annually from its investment portfolio.
But in today’s financial climate that’s a lofty number, and any year that the fund misses that mark the underwater or unfunded number dramatically increases.
Something that’s only happened once in the past five years. As a matter of fact, through March of this year, the fund has an investment return of a meager 0.6% fiscal year-t0-date, and 1.0% over the past five years.
For example, on a $6.1 billion fund balance, a return of 7.75% would deliver $457,500,000 in that fiscal year.
Now imagine the fund earning zero or losing money as it continues to pay out existing benefits, while continuously incuring new obligations.
It’s likely, when the final numbers are tallied, the pension fund earned very little or lost money in its fiscal year ended June 30, 2012.
It should be noted that any pension fund at or below 40% funded is likely to be considered insolvent.
Hey wasn’t your buddy Derry the one who wanted to protect all those big Sheriff pensions?
to 1:
Where did you read that? From Repairman? That’s why they endorsed Ramos huh?
So is SBCERA board members cancelling all their worldwide travel? I mean what have they learned.
This County pays huge and outrageous pensions. Just look at the number of people earning more than 100K in retirement. Far more than Riverside County. The taxpapers are being robbed, far beyond any grand theft.
Anonymous, you are right. SB County pays huge, ridiculous pensions to the management/exec level staff throughout the organization. Seriously, in the words of Mark Uffer, “Where is the best place to buy a suit? The men’s warehouse of course.” When your elite staff considers stores like Penny’s and Mens warehouse as viable alternatives for exec staff clothing, you have to wonder why they need $280,000 a year to retire on.
Must be all those homes in Carlsbad.
Meanwhile, the rest of us struggle to reach 80% of a meager salary after 30 years of service. By the way Riv Co negotiated pension reform in lieu of salary increase whereas Greggy wants us all to rot in hell and keep taking it in the shorts from every angle. Still a cow county, we just dont see the afford the cows.
Yep, that is why Silverwoods went under. No fashion sense. Mays wore wide ties from disco era. Hlawek and Arabatis shopped Sears childrens clothing dept.
Its worse than you think. Do these numbers include the ” unrecognized losses” ? The retirement board voted to spread losses over a period of years. Re the assUmed rate of return – in internal emails the staff admits they are extremely unlikely to achieve the assumed rate of return. The whole scam was constructed to allow the county to keep its pension contributions low. Take a hard look at Larry Walker aka leader of the pack.