RIVERSIDE (CBS) — Three firms with expertise in structuring pension plans were hired Tuesday by the Riverside County Board of Supervisors to research the impact of reforms proposed to reduce the county’s long-term debt.
In its first meeting of 2011, the board voted unanimously to approve contracts — collectively worth $197,000 — with San Mateo-based Bartel Associates Inc., Los Angeles-based Buck Consultants and San Francisco-based Hanson & Bridgett.
According to Executive Office documents, Bartel Associates will outline “alternate pension options” and analyze actuarial studies comparing the different plans.
Buck Consultants will review current employee compensation packages and look at how implementing retirement plan changes would affect “recruitment and retention.”
The county has an existing relationship with the law firm Hanson & Bridgett, which will vet all proposals to ensure compliance with state and federal law.
The lead attorneys, Bob Blum and Judy Boyette, each will be paid between $460 and $480 per hour, with junior staff members earning between $225 and $310 per hour, the documents showed.
County Human Resources Director Barbara Olivier told the supervisors the firms will deliver a detailed report on their findings by March 15.
According to recent analyses, the county’s pension contributions may double in the next decade, from about $155 million this year to about $306 million in 2020. With an unfunded pension liability of more than $700 million, reforms are needed for the county’s long-term fiscal health, according to county officials.
Supervisor Bob Buster has said pension liabilities are growing at a rate that threatens to “smother” the county.
A “second-tier” retirement system has been proposed, combining the defined-benefit formula now in place for all employees — guaranteeing a fixed payment for life — with a defined-contribution plan that would require new hires to invest a portion of their earnings directly toward their own retirement, in the form of a 401k or similar instrument.
The county offers a “3 percent at 50” pension to pubic safety personnel and a “3 percent at 60” pension to other workers. The formulas base compensation on 3 percent of the average of the three highest-paid years of an employees’ career, multiplied by the number of years on the job.
Retirement benefits are managed by the California Public Employees Retirement System, which has seen its investment returns slump along with the nation’s economy, raising concerns about the agency’s ability to meet future obligations.
Buster noted today that the county could be on the hook for another $20 million in annual pension payments if the stock market, based on CalPERS’ projections, under-performs in the years ahead.
The Riverside Sheriffs’ Association, which represents deputies, proposed a measure that a majority of county voters nixed in November that would have prevented the board from implementing any changes to the public safety pension plan without first obtaining voters’ approval.
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