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UPDATE: Supervisors Approve Pension Plan Changes

New changes to pension plans to save Riverside County over $200 million over 10 years

This story was last updated at 1:40 p.m.

Riverside County supervisors today formally approved pension reforms expected to save the county millions of dollars annually by lowering formulas for new hires and having all employees make contributions toward their own retirement plans.

In a 4-0 vote -- with Supervisor Jeff Stone on vacation -- the Board of
Supervisors adopted an ordinance authorizing an amendment to the county's
contract with the California Public Employees' Retirement System, or CalPERS.
Tentative approval was given on June 19, when the matter was debated.
Board members included today's action in a block motion, ratifying several dozen policy agenda items at the same time without comment.

Under the amended CalPERS compact, a second-tier pension plan will be
established for public safety workers hired after Aug. 16. The new hires'
pensions will be based on a 2-percent-at-50 formula, meaning compensation will be determined based on 2 percent of the average of the three highest-paid years of an employee's career with the county, multiplied by the number of years on the job.

Safety workers have to be employed for at least five years and must be
50 years old to start collecting benefits. Those who remain on the job beyond
age 50 become eligible for a 2.7-percent-at-55 pension and can receive up to 90 percent of their final year's full-time compensation.

Non-public safety, or "miscellaneous,'' employees hired on or after Aug. 16 will receive pensions based on a 2-percent-at-60 formula.

The reduced retirement benefits will net the county around $206 million
in savings over a decade, according to the county Executive Office. Existing
employees' tier one benefits will remain unchanged: 3 percent at 50 for public
safety, and 3 percent at 60 for miscellaneous employees, who include clerks,
technicians, accountants and nurses.

The largest savings will be realized after all county employees begin
paying their full share of member contributions into CalPERS. So-called
"employer-paid member contributions'' have been a taxpayer expense since the
early 2000s.

For miscellaneous workers, the contribution amount equals 8 percent of gross earnings, and for safety workers, it's 9 percent. That's on top of the county's matching contributions.

According to the Executive Office, by shifting the employer-paid member
contributions to workers, the county will save up to $650 million over 10
years. The county's unfunded pension liability, as of March, is just under $800
million.

Since 2010, the Executive Office has successfully negotiated collective
bargaining agreements with unions representing more than 16,000 workers to
establish the new retirement formulas for incoming workers and have all
employees cover their own monthly pension contributions to CalPERS. The changes to EPMC will be phased in over the next two years.

Last month, Sheriff Stan Sniff objected to modifying the public safety
element of the pension system, arguing it would hamper recruitment efforts and discourage experienced law enforcement officers from staying.

"You risk turning this agency into a training ground,'' Sniff said.  "People will come to work for us and then fly off to other agencies for better benefits.''

The board consensus, however, was that with neighboring counties
offering largely identical retirement benefits, an exodus from the sheriff's
department was unlikely. However, the board agreed to consider incentives
packages in the future if recruitment problems crop up.

Terry July 17, 2012 at 09:22 PM
News report said "Those who remain on the job beyond age 50 become eligible for a 2.7-percent-at-55 pension and can receive up to 90 percent of their final year's full-time compensation." If this is what I think it means, then someone who makes 80,000 a year gets 72,000 a year for their pension per year. Wow! Most people are on social security recieve about 1200.00 on the average. If we assume that most people have house paid off by 60, than a more fair compensation would be 40 percent of last year worked. We must all take a look at ourselves to let supervisors or anyone else in the county take a raise in these times.
Terry July 17, 2012 at 09:26 PM
A teacher on the other hand if they retire at 62 with 25.8 years of service will take home about 3620.00 per month which equals 43,440.00 per year. So, when everbody is always saying how much we get paid , go take a look at the supervisors, county , and city workers retirement benefits and ask yourself is that in line with the majority of people?
CB July 18, 2012 at 03:04 PM
@Terry: Do some more research on the rules for civil service employees receiving their retirement pensions. It is not a simple calculation of percentage multiplied to the salary. The "up to 90 percent of their final year's full-time compensation" requires the employee to have worked there typically 40 years... yes, 40 years. Frankly, those people are very few. So, someone working for (in your example) of 25.8 years really only receives about half of their working salary. Your example of a teacher with a "take home ... [of]... $3620 per month" would have had a working salary of well over $9000 a month (since "take home" would mean net after taxes and such). Not many teachers draw a working salary in excess of $108,000 a year... do they? Quoting the article: "compensation will be determined based on 2 percent of the average of the three highest-paid years of an employee's career with the county, multiplied by the number of years on the job." Consider this example: an employee works 10 years, retires at 55, making $4000 a month and for simplicity sake let's figure that was the salary for the 3 highest paid years. Two percent for each of the 10 years is 20 percent, which is multiplied by $48,000. Monthly retirement would be $800 before taxes and deductions. Twenty years would roughly be $1600 a month.
CB July 18, 2012 at 03:12 PM
And, a little known issue is that many municipal employers chose not to participate in the Social Security program, so while the employer and employee did not contribute into that, neither is the employee eligible to receive Social Security retirement. The 2 percent a year and similar calculations are generally for the rank and file and middle management employees. Persons in upper management negotiate much more lucrative retirement packages requiring far, far less time employed before being eligible.
Terry July 18, 2012 at 03:24 PM
CB, I am a teacher and that is what the calculation is for 25 years, so I done my research on my retirement site. If you work app. 15 years you might make around 1300 per month. Oh, my information on public servants that work here in law enforcement and in L.A. that I know after 25 years will take home over 70,000 a year when they retire. Yes, we only get a fraction of social security if we worked somewhere before because of the windfall act.

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