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Placer County Pension Benefits

September 02, 2010

PLACER COUNTY – PENSION BENEFITS

Placer County employees have been asked to contribute toward their pension benefits.

  • Safety Retirement Formula - 3% at age 50.

            The County would pay 88% of the pension contribution, or 30% of salary, with employee paying up to 4%[1].

  • Miscellaneous Retirement Formula - 2.5% at age 55.

            The County pays the majority or 91% of the cost, or 21.2% of salary, with employee paying up to 2%.

  • As a prospective cost saving measure, the County has proposed a two-tier pension system whereby future employees would receive a different pension benefit.

BACKGROUND

CalPERS notified the County that rate increases will occur each of the next few years due to recent investment losses and changes in actuarial assumptions (employees are choosing to retire younger and statistically are living longer).

  • Increased pension cost sharing between the County and employees will be essential to ensure the sustainability of, and funding for, these benefits.
  • Good public policy would not support a redirection of funds away from critical county services due to flat or declining revenue collections, to provide for increased benefit costs.
  • County pension costs could rise from $38 million to over $50 million by 2015.
  • As of the 2008 Pension Plan Report, the unfunded liability was $181 million.

In 1987 the County contributed 3.25% of the employee’s 8-9% pension plan contribution.

  • Over the next decade, the county picked up an increasing percentage of the employee’s pension share as the result of collective bargaining.
  • These labor agreements were entered into when economic conditions were good, County revenues were growing and the employer’s pension payments were low.

Safety employees are eligible to retire at age 50 with at least 5 years of service; these include sheriff’s deputies, probation and correctional officers, and District Attorney’s investigators.

  • Participant numbers grew by 42% between 2000 and 2008 to 823 total participants.
  • In 2008 the average safety pension benefit paid was $32,681 per year.

Miscellaneous employees can retire at age 50, but will receive the maximum formula available to them at age 55. They must have at least five years of CalPERS service.

  • Participants increased by 40% between 2000 and 2008; 5,325 total participants.
  • In 2008 the average miscellaneous pension benefit paid was $14,737 per year.

Updated pension reports will be available November 2010.



[1] The amount an employee pays for pension benefits varies if represented, management or confidential.

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