County pension fund is healthy ? for now

Tony Biasotti

Apr. 29, 2009 (McClatchy-Tribune Regional News delivered by Newstex) -- The County of Ventura's $3.1 billion employee pension fund is in fine shape for the moment, but that moment may not last long.

The fund's annual audit was presented Tuesday to the county Board of Supervisors by Tim Thonis, the administrator of the Ventura County Employees' Retirement Association. The audit covered the year from June 2007 to June 2008, so it doesn't reflect the crash in equities markets in the second half of 2008.

According to the audit, the county's pension obligations are 91 percent funded, up from 88 percent a year earlier. That means that 91 cents of every dollar owed to current and future retirees is covered from the fund; the county would have to make up the other 9 cents from its general fund. That's a total liability for the county of $290 million.

That's "a very, very healthy ratio," Thonis said. The "industry standard" for public-sector pension funds is closer to 80 percent, he said.

However, the county's ratio is almost certain to drop in the next few years, Thonis said.

The projections for the pension fund are "smoothed" over a five-year period, so the current numbers reflect the fund's performance from 2003 to 2008. The early years in that period showed very strong investment gains, and once those years disappear from the five-year window and are replaced by the major losses of 2009, the outlook will be worse.

If the economy continues as the county retirement board expects it to, the county's pension fund will be only 65 percent funded by 2013.

That means the pension obligations will eat up a bigger portion of the general fund budget every year, eventually more than doubling from the current total of $96 million per year.

Adding another $100 million or more to the county's annual pension obligations would require deep cuts across the county budget, County Executive Officer Marty Robinson said after Tuesday's meeting.

"Oh, it's enormous, that amount of money," she said. "And we're in pretty good shape because this is all we have to deal with. It could be worse, if we had pension obligation bonds to pay off."

Those are bonds that some cities and counties have used to borrow money against their pension plans.

The county has about 8,000 current employees and about 7,000 former employees and their heirs drawing pensions.

Like most government agencies, it has what's known as a "defined benefit" pension plan, as opposed to the "defined contribution" plans, such as 401(k) plans, that are common in private-sector businesses.

With a defined benefit plan, employees are promised a certain amount when they retire.

If the pension fund doesn't generate that much money, the employer has to make up the rest from its general fund.

In a defined contribution plan, the employer contributed a set amount of money, and the retirees' benefits are dependent upon how well the investments do.

Also on Tuesday, the Board of Supervisors had been scheduled to vote on a new job title and a raise of up to $50,000 for Thonis, who runs the pension fund and reports to the Ventura County Board of Retirement. Thonis currently ears about $140,000, and the new job title would have a maximum salary of $190,000.

But shortly before the supervisors' meeting, the Board of Retirement withdrew its request, Robinson said.

On the Net:

http://bosagenda.countyofventura.org/sirepub/agdocs.aspx?doctype=agenda&itemid=24499

Newstex ID: KRTB-0210-34520300