Thursday, May 19, 2016 – 08:45 a.m.
San Bernardino County First District Supervisor Robert Lovingood is living in a fantasy land.
That’s at least when it comes to the county’s pension fund.
Lovingood recently gave a candidate interview to the Daily Press that was posted on Facebook. In the interview Lovingood touched on the subject of the pension system’s stellar funding level, and how it was considered to be solid.
Lovingood stated the system is 84% funded.
The only problem? Looking at the pension fund’s last actuarial valuation, and based upon an actuarial valuation analysis method, the funding level was at 80.82% on June 30, 2015.
Not at 84% as Lovingood proclaims!
The little error equates to roughly $300 million in unfunded liability.
To read the June 30, 2015 Actuarial Valuation Report, click here.
The other little tidbit that Lovingood forgot to mention?
The pension fund isn’t going to hit it’s target investment return benchmark of 7.50% for its fiscal year ending on June 30, 2016.
In the current fiscal year, through 9 months, the fund is at a -3.6% return.
The fund’s 1-year return is -1.4%, 3-average return +4.9%, 5-year average return +6.2% and 10-year return is at +4.5%.
Remember, as mentioned above, the fund needs +7.5% per year. So translated, the situation isn’t all rosy for county taxpayers.
To read the current investment performance, click here.
Absent some manipulation of the numbers, the county will have to continue to fork over more money, by way of higher pension contributions, to maintain the funding level at or near 80%.
The county has been doing just that for the past several years. That’s another tidbit that Lovingood omitted.
Remember the fund is really supposed to be 100% funded. Not 80%.
The pension fund is just under $8 billion in market value. But it should be $10 billion.
That’s a $2 billion shortfall.
Maybe Lovingood should go back to school and take a math class.