A 49 percent spike in unfunded pension promises could drive up taxpayer contributions to Sonoma County government pensions by $13.6 million over the next three years.
The roughly 25 percent increase in county payments, triggered mostly by past investment losses, is contained in a new report accepted Wednesday by the board of the $2.05 billion county government pension system.
It comes on the heels of better recent earnings by the pension fund and overhauls last year by the state and county intended to lower taxpayer pension costs. Those costs are up 400 percent in Sonoma County since 2000 and have been a hot-button issue in political campaigns, with fiscal watchdogs decrying cuts to public services and staffing.
At least in the short term, taxpayer contributions to Sonoma County's pension fund will continue to rise, pension officials reported Wednesday.
The increase in pension costs could extend through mid-2017, county officials said.
“We knew this was coming,” said Sonoma County Supervisor David Rabbitt, who also serves on the board of Sonoma County Employees' Retirement Association. “It's one of those things where it's going to get worse before it gets better.”
The system covers six government agencies, of which the county is by far the largest. It pays benefits to 4,283 retirees and has about 4,150 current and deferred workers enrolled.
The report showed a sharp, one-year jump in long-term unfunded obligations to county retirees. Now at $527 million, that so-called unfunded liability — the difference between current assets and projected payments to retirees — is up from the $353 million reported last year.
The fund's stock market losses from 2007 to 2009, totaling $671 million, are a main factor in the projected rise in annual employer contributions. The last layer of those losses, $109 million, was accounted for in the system in 2012. Pension officials said that step warranted some optimism, especially after earnings in three of the past four years have surpassed the fund's target rate.