Riverside County supervisors Tuesday formally approved pension reforms expected to save the county millions of dollars annually by lowering formulas for new hires and having all employees make contributions toward their own retirement plans.
In a 4-0 vote -- with Supervisor Jeff Stone on vacation -- the Board of Supervisors adopted an ordinance authorizing an amendment to the county's contract with the California Public Employees' Retirement System, or CalPERS.
Tentative approval was given on June 19, when the matter was debated. Board members included today's action in a block motion, ratifying several dozen policy agenda items at the same time without comment.
Under the amended CalPERS compact, a second-tier pension plan will be established for public safety workers hired after Aug. 16. The new hires' pensions will be based on a 2-percent-at-50 formula, meaning compensation will be determined based on 2 percent of the average of the three highest-paid years of an employee's career with the county, multiplied by the number of years on the job.
Safety workers have to be employed for at least five years and must be 50 years old to start collecting benefits. Those who remain on the job beyond age 50 become eligible for a 2.7-percent-at-55 pension and can receive up to 90 percent of their final year's full-time compensation.
Non-public safety, or "miscellaneous," employees hired on or after Aug. 16 will receive pensions based on a 2-percent-at-60 formula.
The reduced retirement benefits will net the county around $206 million in savings over a decade, according to the county Executive Office. Existing employees' tier-one benefits will remain unchanged: 3-percent-at-50 for public safety, and 3-percent-at-60 for miscellaneous employees, who include clerks, technicians, accountants and nurses.
The largest savings will be realized after all county employees begin paying their full share of member contributions into CalPERS. So-called "employer-paid member contributions" have been a taxpayer expense since the early 2000s. For miscellaneous workers, the contribution amount equals 8 percent of gross earnings, and for safety workers, it's 9 percent. That's on top of the county's matching contributions.
By shifting the employer-paid member contributions to workers, the county will save up to $650 million over 10 years, according to the Executive Office. The county's unfunded pension liability, as of March, is just under $800 million.
Since 2010, the Executive Office has successfully negotiated collective bargaining agreements with unions representing more than 16,000 workers to establish the new retirement formulas for incoming workers and have all employees cover their own monthly pension contributions to CalPERS.
The changes to EPMC will be phased in over the next two years.Sheriff Stan Sniff last month objected to modifying the public safety element of the pension system, arguing it would hamper recruitment efforts and discourage experienced law enforcement officers from staying.
"You risk turning this agency into a training ground," Sniff said. "People will come to work for us and then fly off to other agencies for better benefits."
The board consensus was that with neighboring counties offering largely identical retirement benefits, an exodus from the sheriff's department was unlikely. However, the board agreed to consider incentives packages in the future if recruitment problems crop up.