RIVERSIDE (CNS) – Riverside County’s pension liabilities now exceed $3.5 billion, and the county will have to increase appropriations over the next fiscal year to sustain the retirement system, according to a report that the Board of Supervisors will review tomorrow.
The Pension Advisory Review Committee’s annual assessment of the county’s retirement assets and liabilities is on the board’s policy agenda.
The PARC report noted that since the prior fiscal year, the county’s unfunded pension gap had widened from just under $3 billion to $3.505 billion today.
The county’s retirement apparatus is about 70% funded in both the miscellaneous and safety categories.
The safety category covers sheriff’s deputies, District Attorney’s Office investigators, probation agents, and others, while the miscellaneous rolls cover clerks, custodians, nurses, social workers, technicians and other employees not involved in any law enforcement function.
The amounts required to fund workers’ nest eggs in the California Public Employees’ Retirement System will escalate over the next decade.
A major influence on pension costs is CalPERS’ investment performance, which county officials have long complained has lagged the markets as a whole over the last decade due to a state preference for narrow investment focuses over broader money-making opportunities.
According to the report, the mammoth public pension fund’s assumed rate of return on investments — also known as the discount rate — in the most recent fiscal year was 6.55% — nearly half a percentage point below the anticipated rate of return of 7%.
In order to make up for losses, the county will have to push its contribution rates up in the current fiscal year — to the equivalent of 24.5% percent of payroll for the safety category, compared to 21.6% currently, and the equivalent of 43% of payroll for the miscellaneous category, compared to 37.3% now, according to the report.
Employees across the spectrum in county government generally contribute less than 10% of gross earnings toward their defined-benefit plans with CalPERS, figures show.
General fund allocations to support the retirement apparatus will steadily rise over the next decade, approaching $1 billion in general fund support by the early 2030s, according to the report.