Local cities still face significant pension risks
Jan. 17, 2015
Updated 10:44 p.m.
By TERI SFORZA
Things might be looking a bit better, but let’s not let it go to our heads.
Anaheim is still staring down a public pension hole more than half a billion dollars deep.
Santa Ana has a $429.5 million hole to call its own. Huntington Beach’s is $308.2 million. Newport Beach’s, $258 million. And so on.
Even after California’s most massive public pension system reported that it’s regaining ground lost in the recession, many Orange County cities continue to grapple with painful shortfalls, especially the older burgs sporting their own police and fire departments. The newer, contract-heavy cities look lean and mean by contrast.
Here’s the big picture:
- Thirty-three county cities have promised $3.1 billion to current workers that local governments do not, in fact, have. That’s better than a few years ago, when that hole was $3.3 billion deep.
- The overall “funded status” of O.C. cities – how much of what they need is currently stashed away – is up to 72 percent, from 68.2 percent.
- Some communities are hurting more than others. The local cities with the lowest-funded status were Costa Mesa (65.1 percent), Newport Beach (65.8 percent), Garden Grove (69.2 percent) and Huntington Beach (69.7 percent). Note that each has its own police and fire departments. (Public safety pensions are more generous and allow members to retire earlier, meaning they require more cash.)
Why should you care about all this? Because money that goes into higher pension contributions is money that can’t pay to fix roads or keep pools open or provide other services. And because retirement benefits are guaranteed: If there’s not enough money in the pot, you, Jo Citizen, must make up the difference.
A recent Watchdog column explained that the California Public Employees’ Retirement System as a whole reported a 77 percent funding level. That’s this close to what some pension experts say is the magic number for a solidly funded pension plan: 80 percent (though some think even that is too low, and CalPERS actuaries say the “ideal” but unnecessary level is 100 percent).
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