Riverside County Pension System Goes Under the Microscope
Riverside County leaders received sobering news about the county’s ailing pension system Tuesday.
The new 18-page report compiled by the Pension Advisory Review Committee (PARC) predicted rising pension costs over the next decade, with the county’s unfunded liabilities approaching $3 billion.
CalPERS' figures showed that in the safety category -- covering sheriff's deputies, District Attorney's Office investigators, probation agents and others -- the county will need to commit the rough equivalent of 32 percent of payroll in 2018-19, about $118 million, to cover pension obligations. By 2024-25, that figure jumps to 47 percent, based on projections.
The costs factor in the expense of amortizing pension obligation bonds issued in 2005, as well as some accounting adjustments.
In the miscellaneous category -- covering clerks, custodians, nurses, technicians and others -- the county will need to commit a sum equal to 32 percent of payroll in 2018-19, about $226 million, to cover pension obligations. By 2024-25, that amount spikes to 29 percent, figures show.
CalPERS’ rate of return on investments currently stands at a not-too-shabby 7.375 percent. But that figure is expected to fall below 7 percent over the next three years, putting the county in rough territory. As PARC notes, "poor investment performance following the financial crisis (of 2008) significantly increased the county's unfunded liability, driving up the required payments.”
The county is still in a better position than it would have been without 2012 pension reforms, PARC said. But the numbers show they don’t go far enough.
Riverside County is struggling with a number of fiscal uncertainties right now, including questions over public safety funding. That issue has led to a public spat between Riverside County Sheriff Stan Sniff and the Board of Supervisors. Read more about that here.