Supervisors Neil Derry left, and Janice Rutherford right.
Joe Nelson, Staff Writer
Posted: 07/18/2012 06:37:55 PM PDT
San Bernardino County Supervisor Neil Derry is proposing a pension-reform measure for the November ballot that would raise the retirement age for new county employees and reduce the amount they earn annually toward their pension benefits.
Derry said Wednesday he will introduce his proposal to the Board of Supervisors on July 31. The board must approve it by Aug. 9 to get it on the ballot.
The proposal also would require that all employees pick up the roughly 7 percent share of what the county pays into their pensions, which equates to $61 million for the 2012-13 fiscal year alone, Derry said.
“The goal is to stabilize the pension fund and reduce the liability to the taxpayers for both the benefit of taxpayers as well as our pensioners,” Derry said. “Our employees will benefit by ensuring that the pension is solvent in future years, and the taxpayers also benefit by that solvency because they are on the hook if the pension plan fails in coming decades.”
Pension costs in the county have grown from 3.1 percent of total expenditures in 1999 to 9.5 percent in 2011. In 1999, the county contributed $43.8 million to its retirement pension fund. In 2011, the total was $232.3 million.
The measure also aims to thwart pension spiking by averaging the annual compensation over an employee’s final three years on the job instead of their single highest-paid year.
If the board and taxpayers approve the measure, the county would amend its retirement formula for public-safety employees from 3 percent at age 50 to 2 percent. In other words, once the employee becomes eligible for retirement at age 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.
For general employees, the retirement formula would change from 2 percent at age 55 to 2 percent at 62.
The new retirement formulas would apply to new employees if taxpayers approve the measure in November and union contracts are renegotiated.
Derry said the changes will save the county hundreds of millions of dollars in the long run.
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