Monday, February 1, 2016 – 08:30 a.m.
It’s nice that San Bernardino County coffers are flush with money.
Because it looks like it’ll be needed for the pension fund, the San Bernardino County Employees Retirement Association (SBCERA).
For the second-quarter ended December 31, 2015, the fund lost 0.4%.
In it’s fiscal year to date, SBCERA has returned -3.5%. That’s negative 3.5%.
The development brings the funds one, three, five and ten year return numbers well below the actuarial hurdle of 7.5%. Longer term comparison numbers are deteriorating, but at a slower rate.
The actuarial return hurdle is the investment return needed to pay all benefits and fund expenses.
A tough investment climate that has been hard on both stock and bond markets has made it difficult ot generate needed returns. Especially when the return needed is 7.5%.
To be fair. Comparable funds have been having the same difficulty. But SBCERA intermediate and longer term performance rankings have started to deteriorate over time.
The negative returns require county supervisors to allocate additional general fund money to pension contributions.
Almost two years ago county staff told the board of supervisors that the county was over the pension funding hump. They were wrong!