Government-Records: Stock Market losses Kill Marin County, California, of the pension bonus offers

By Nels Johnson
Marin independent JournalPosted: 11/03/2010 02: 47: 56 AM PDT
Pensioners in pension plan Marin don't get a bonus this year after all in the light of the stock exchange losses that torpedoed investments.

The controversial bonus plan, a political football at the Civic Center, was put on ice Wednesday after pension officials concluded that is violated policy technicalities.

A detailed calculation indicated there were no funds that would be considered "excess earnings" for San Rafael, and why a member agency of the county system fell short, money wasn't available for increased extra cost of living for anyone else, according to Chapter Board Jeff Wickman.

Pensioners in County system already obtain increases the cost of living from 2 to 4 percent per year, but because pensions for some elderly pensioners who have not travelled inflation, the Pension Board has the discretion to consider an extra boost for them when investment earnings exceed 7.75%, as they have done so far this year. But as part of a policy Board, debt into a pension San Rafael "contra account" blocked a bonus for anyone.

"The account contra was established due to the fact that earn from previous years were insufficient to fully credit interest to member accounts at the rate of evaluation", Wickman reported Wednesday. "This happened because of unusually large market negative returns." The Pension Fund lost $ 275 million last year.

Not because San Rafael miss the mark of debt, "an additional ad hoc adjustment of cost of living may be granted under the tab

policies and applicable law, "said trustees of pension.

Trustee Allen Haim said that although some elderly pensioners who need a hand, nobody can be offered because "seems unfortunately this year that we have not met the financing capacities." No bonus was given last year, even though "there are retirees who lost 20 percent of their purchasing power," said Maya Gladstern, new Chairman of the Board of Directors Board.

The policy explains the steps where retirees could get a special bonus of automatic increases in the cost of living had drawn fire from County administrator Matteo Hymel and supervisors counties, which stressed that the pension plan has left taxpayers deeply in debt.

Superintendent Steve Kinsey last week said he was "deeply disturbed" by the policy that "allows ancillary benefits," because the pension plan is "only three-quarters of financing arrangements", and Hymel told that politics "does not pass the test aimed straight" in the light of the debt retirement. Kinsey supervisors and Charles McGlashan met with Hymel, Wickman and several trustees of pension privately Tuesday for what Wickman described as "an opportunity to talk to them about their concerns."

Pensions Marin County covers, Novato, San Rafael and Southern Marin fire districts and various smaller agencies and County portion of the program only faces everywhere an unfunded liability from 700 million to $ 1.8 billion, depending on the assumptions used to calculate the debt. Critics say that the unfunded liability is more than twice the county estimates of 700 million.

The Pension Board has approved a policy Wednesday indicating that will review its rate of recruitment of earnings, as well as the assumptions, every year, when it submits its actuarial valuation report, thanks again this January. Policy note that assumptions that determine the contribution payers and employers system now include investment annual earnings of 7.75% salary increases of 3.5% and inflation of 3.5%. Trustee Bernadette Bolger said that he wants to review these assumptions.

Real investment increases have averaged only 2.8% over the past decade, while hitting 7.6 percent in the past 20 years and 9.8% in the last 30 years.

Former Marin assemblyman Joe Nation, a professor at Stanford, said that a 4 percent "no risk" rate gains more sense why taxpayers are obligated to pay no matter what the end costs of programs. Using this measure, the County is only 42% financed and more than 2 billion dollars in debt, he said.

Pension trustees said that Wickman will return next month with a website or newsletter article on the history of earnings of the scheme in the light of the criticisms of the nation.

"It's amazing in this market," said Haim. "Two years ago, it looked like the end of the world. Now, returns are coming back. "

Nels Johnson contact via email