News Column

EDITORIAL: A little balance for county's pension board

February 14, 2014

The Press Democrat, Santa Rosa, Calif.

Feb. 14--"When is the county going to address the makeup of the pension board? ... (At) the moment only one member of the Sonoma County Employees Retirement Association board isn't in line to receive a pension. More public oversight is needed." -- Press Democrat editorial, April 5, 2012

The Sonoma County Board of Supervisors this week finally added someone to the board who is not in line to receive a public pension. And, as if on cue, some leaders of public employee unions protested. As reported Wednesday ("Pension board pick draws criticism"), labor leaders said they were disturbed that the new addition, Bob Williamson, a retired executive of Chevron with experience running a private retirement plan, had been outspoken about the size of public pension payments. They also were concerned that he's a member of the Sonoma County Taxpayers Association board, which also has been critical of how public employee pensions have been handled. To us, this is not evidence of a problem. It's evidence of someone who has been paying attention. Anybody who has taken the time to follow what has been happening with public employee pensions in California should be more than critical. They should be outraged. As has been documented and reported, Sonoma County supervisors a decade ago significantly -- and retroactively -- boosted retirement benefits for public employees without proper public notification and without proper analysis of how such a breathtaking giveaway would be funded. The county's justification at the time was essentially two-fold: Everybody's doing it, and everyone thinks the stock market will climb forever, so why shouldn't we? Well, it didn't last forever. During the 2008 economic downturn, SCERA's assets declined by $671 million, or 30 percent of their value. As a result, the amount of money the county needs to spend on retirement, including annual payments on pension bond debt, increased more than 400 percent. Even with the recent stock market gains, pension costs account for about 19 percent, or $98.3 million, of the county's $530 million annual payroll. Meanwhile, the county is still some $527 million behind in meeting its long-term retirement obligations, which means less money will be available to pay for street repairs and public services for some time to come. Making things worse, as this problem erupted, the SCERA board developed a bunker mentality, refusing this newspaper's repeated requests for detailed information about how the public's money was being spent on pensions. When The Press Democrat won a lawsuit to gain access to the information through the California Public Records Act, it showed that some retirees -- including some members and former members of the SCERA board -- were earning well into six figures, many having padded their pensions through gimmicks such as spiking and buying "air time." It's a given that the primary role of the SCERA board is to manage the fund's assets for its participants and their beneficiaries. But under its charter, the board is called upon to do this while "minimizing employer contributions" and being respectful of the county's overall fiscal health. So given all of this, no, we don't think that having someone like Williamson on the board looking out for the public's interests, ensuring that the investments are being handled in a responsible manner, is too much to ask. As history suggests, one is not enough.


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Source: Press Democrat, The (Santa Rosa, CA)

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