090105 - Laserfiche WebLink

Browse Search

CQNEJ� RECREATIQN PART -01, ISTRICT GENERAL MANAGER BOARD OF DIRECTORS Tex Ward Michael D. Berger, Chair Joe Gibson, Vice Chair Mark H. Jacobson. Director TO: Board of Directors George M. Lange, Director Susan L. Holt, Director FROM: Sheryl Lewanda, Administrator DATE: September 1, 2005 SUBJECT: Public Pension"Plans This report addresses two types of Public .Pension Plans, defined contribution and defined benefit. In defined contribution (DC) plans, benefits are determined by the amount of contributions to the account plus earnings. In defined. benefit (DB) plans, retirees are guaranteed a monthly benefit. The District contracts with CaIPERS for its defined benefit retirement plan. In a defined benefit plan, retirees are guaranteed a monthly benefit based on salary, years of service and age at retirement. The monthly benefit does not fluctuate based on investment gains/losses, CaIPERS simply charges the contracting agencies the amount necessary to ensure that funds are available to pay the guaranteed benefits. Agencies contribute more to CaIPERS more when investment earnings are low and less when investment earnings are high. During the stock market increases of the late 1990s, many agencies had surpluses in their CaIPERS accounts and employers were not required to make annual payments for retirement benefits. In addition, during this time, several agencies enhanced benefits for their employees, anticipating that the surpluses would cover the cost of the enhancements for years to come. When stock market fortunes changed, the surpluses disappeared, and agencies were required to increase contributions. In December, 2004, Assemblyman Richman introduced two bills that, if passed, would have put an initiative on the ballot that would prohibit State employees hired after July 1, 2007, from joining defined benefit plans, Governor Schwarzenegger announced his support of pension proposals, and on January 5, 2005, the Howard Jarvis Tax Payers Association filed a statewide ballot initiative barring defined benefit plans for new employees. In April, 2005, pension reform initiatives were delayed in the hopes that a legislative solution could be found, however the Governor indicates that his pension reform proposal will go to the ballot in June, 2006, if a legislative solution cannot be found. Attached is a newsletter from CaIPERS providing additional information on the debate over public pension plans, including proposals to modulate the annual contribution rates. Staff will continue to monitor the situation in Sacramento. Attachment: CalPERS Pension Security News HILLCREST CENTER • 403 WEST HILLCREST DRIVE • THOUSAND OAKS, CALIFORNIA 91360-4223 (805) 495-6471 • FAX: (805) 497-3199 • E-MAIL: parks@crpd.org • www.erpd.org