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Placer County pension costs on the rise

By: Gus Thomson, Journal Staff Writer
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Placer County is grappling with a steep rise in pension costs for employees, with payments expected to jump from $38.9 million this year to $53.2 million four years from now. The Board of Supervisors and the county have cut pension costs in recent years by transferring more of the pension share over to Placer Public Employees Organization and Deputy Sheriffs Association members. And future hires will also be bound by less-generous pension payments and benefits. But a report from the County Executive Office to supervisors on Tuesday indicates that costs will continue to rise as current employee salaries increase and payments to CalPERS increase to make up for a steep decline in the state pension organization’s investment portfolio. Therese Leonard, principal management analyst with the CEO’s Office, said the CalPERS portfolio declined 24 percent in the 2008-09 fiscal year. The loss has subsequently been spread over several years and this year is the first reflecting portfolio losses in CalPERS payments to make up for them. While the county workforce has remained steady in recent years at about 2,700 employees, the pension costs continue to rise. Last year’s total was $37.8 million and $38.9 million is budgeted for this fiscal year ending in July. The 2011-12 pension cost to the county is expected to jump to $44.1 million and keep rising in future years through 2014-15. County Executive Officer Tom Miller said that like many other government jurisdictions, Placer County is dealing with rising retirement benefit costs. The Board of Supervisors continues to show fiscal responsibility by “making informed decisions on difficult issues,” he said. “Hearing regular reports on expenditures, such as CalPERS costs, enable the board to act proactively,” Miller said. Walt Riley, a Meadow Vista resident, said he has respect for supervisors but that more needs to be done to reflect what has been occurring in the economy and the private sector. “The organizations representing employees are not willing to give up enough when the fact is we don’t have enough to meet our obligations,” Riley said. When some government workers get 80 percent of the amount they earned during their highest year of income for a pension that lasts a lifetime, the remuneration is too rich, he said. A previous Journal report identified 21 retirees who had worked for Placer County and had CalPERS pensions of $100,000 or more. One solution is to tie the amount of money governments contribute to employee pensions to a percentage of their total budgets, he said. “I feel jealous because I come from the private sector but I try to let any jealousy color my thinking,” he said. “I don’t harbor any ill will. It’s just that we can’t afford it.” ----------------------------------------------------- Past, present and future Placer County pension costs 2009-10 $37.8 million 2010-11 $38.9 million 2011-12 $44.1 million 2012-13 $45.9 million 2013-14 $50 million 2014-15 $53.2 million Source: Placer County Executive Office information and estimates