I am one of those public employees whose pensions you’ve been hearing a lot about. I’ve been a Sonoma County employee for three years. I recently ran for 5th District supervisor. I’m a long-time homeowner in Roseland and a native of Sonoma County.
Recently, the Citizens’ Advisory Committee on Pensions made a series of recommendations about reducing the county’s responsibility for pensions for public employees. These are the people who do everything from ensuring that our drinking water is safe to clearing drainage ditches during a storm. They are people like me, who make sure our elderly, disabled and financially struggling families get the services they need.
Pensions are funded by a combination of three things: employee contributions, employer contributions and return on investments. When the stock market plunged during the Great Recession, so did return on pension investments. You may recall, Wall Street got bailed out. Main Street did not.
Current employees are already paying a portion of the difference for retired employees from our own paychecks. County employees agreed to have 3 percent of our pay go toward the county’s liability. We believe in paying it forward, and we trust that when our time comes to retire, the county will uphold its end of the bargain.
We currently have a two-tier retirement system in place for county employees. They are based on date of hire — that date is Jan. 1, 2013. For general employees, we have Plan A – 3 percent at 60 — and Plan B — 2.5 percent at 67. The Citizens’ Advisory Committee is recommending a third hybrid tier. This tier would include an increase in pension contributions by employees as well as contributing to a 401(k). County employees already have an option to set aside income from each of our paychecks in a 457(b) deferred-compensation plan. This plan is flexible and affordable to the individual, with the key word being optional.
The cities of San Jose and San Diego tried to create hybrid systems similar to what the committee is proposing, and these hybrid systems were massive failures. There was a mass exodus of employees. A hybrid system would actually cost the county more money because the county would have to bear the costs of administering two retirement systems.
Defined contribution plans ensure a set income during retirement, which is not subject to the vagaries or blatant manipulations of the stock market. This is a good-faith contract between employee and employer. It was found that in the recession of 2008, the elderly fared better than most, due to the existence of Social Security and defined pension plans. I believe we must keep the compacts we have made to previous generations and protect the most vulnerable of our citizens, the elderly, from future stock collapses.
The average pension for rank-and-file employees is around $24,000 per year. The horror stories you hear about oversized pensions come almost exclusively from upper-level management employees who manage to (legally) game the system or accumulate more than one pension over their careers. The state Public Employees’ Pension Reform Act took care of many of those abuses going forward.
Many of the advisory committee’s proposals require significant changes to state law and are, therefore, not something the county can do. Other proposals are shortsighted. The Sonoma County sheriff is already having difficulty recruiting and retaining officers to serve our high cost of living county because of low pay and benefits. Do we really want to repeat the mistake made by San Jose, or do we want to learn from them?
