Pension reform: stuck between a rock and a hard place
The debate over pension reform has been brewing for several years and it may now be finally coming to a head. While there have been tiffs over such benefits in the past, as when former Ventura City Manager Rick Cole recommended retirement benefit increases for firefighters at the beginning of the Great Recession, county leaders and taxpayer advocates are currently going head-to-head over pension reform and it may be headed to the ballot this November with enough signatures. The main point of contention, switching from a defined benefit plan to a 401K-style defined contribution plan.
On the one side stand county employees, from office assistants to sheriff’s deputies, court reporters to medical workers, etc. Most are union members. County officials, including Sheriff Geoff Dean and County Executive Mike Powers, have come out in opposition to switching pension to a 401K-style plan, stating the change will effect recruiting and retention of quality applicants and employees. Also, Dean referenced a number of cities that are paying more now to make the switch, stating the apparent savings are not there, specifically referencing San Diego that passed a similar initiative. (While there will be costs to change the system, in the long run, the CEO of the San Diego pension system said that the city will see savings over time.) And we agree with Dean and Powers for the most part, we can easily see that certain applicants and employees may go elsewhere for better benefits, and the savings may not be as clear-cut.
On the other side stand taxpayer advocates, specifically the Ventura County Taxpayer Association and the Committee for Pension Fairness. Members of these groups, including David P. Grau, Dick Thomson and Jim McDermott, have said in various public forums that the current pension system, which is funded at 79 percent (the unfunded liability totaled $953 million at the end of last fiscal year and liability has grown exponentially every year), is unsustainable and that private industry has moved away from pensions to 401K plans — why should the public sector be held to a different standard? It’s difficult not to agree with these arguments as well. First, anything underfunded puts taxpayers on the line for such shortcomings, which may equate to fewer services in order to pay for the shortfall; and second, there shouldn’t be a double standard when it comes to benefits.
It’s a fine line to walk for Ventura County taxpayers. Of course we want the best, most competent people fighting crime and fires and working in other crucial jobs on the county level to make our lives easier. And we do understand the frustration of guaranteed pensions and unfunded liabilities. But the reality of the situation, regardless of which side one falls on, public opinion in general seems to favor switching the pension system to a 401k-style plan. For instance, San Diego voters passed a ballot initiative by a 66 percent majority; in San Jose, a similar initiative passed by a 70 percent majority. According to Grau, local polls are showing a correlative pattern to the voters of San Diego and San Jose.
As signature gatherers make their way across Ventura County to reach the goal of 26,000 by May 4 — Grau said there is a lot of positive momentum thus far — we highly encourage voters to make decisions only when properly informed of what such a switch would mean. Before Election Day, the VCReporter will delve into what it will mean for taxpayers to stick with the status quo and what will change if such a ballot initiative passes. We will compare and contrast comparative jobs of the public and private sectors and explore the balance between salaries and benefits. Change can be good and may be just what we need, but we can only stand by moving forward getting the initiative to the ballot. From there, we need to vote with our heads and not our emotions — such a contentious issue decided in haste will permanently alter the lives of many. Stay tuned for an upcoming issue to help voter make an informed decision.