How Retroactive Pension Increases and Lower Investment Returns Have Blown Up Sonoma County’s Pension System ·
County Retirement Costs: White Paper by Robert W. Geis, CPA
(Through June, 30, 2006)Page 1 of 7 Case in point: In 1999 the County was 100% funded per the actuarial value method and 117% funded ($180 million surplus) per the market value method. In our opinion, this was just short of excellent. At that point decision makers decided to improve both active member and retired member benefits using surplus earnings to pay the benefits (a part of the $180 million surplus). The cost of these benefits created new liabilities for past service estimated by the actuaries to cost $87 million. During the implementation of the new benefits the market lost $142 million by 12/31/00. Therefore, the surplus to pay the benefits was wiped out and new liabilities were created that had not been paid for Page 3 of 7”
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