Port Hueneme eyes options for ballooning retirement costs
In five years,
Read more: Facing large bills, public agencies work to rein in retiree health costs
The PARS Pension Rate Stabilization Program offers a number of benefits, according to the presentation the firm will give Tuesday night. It helps address unfunded accrued liabilities (money owed employees for work already completed), allows the city to more aggressively play the stock market -- cities are limited in the types of investment they can make -- and credit rating agencies look at it more favorably.
It also takes control out of
"The argument is, it's local control of those funds and local control over the investment of the funds," City Manager
CalPERS is the
It's not clear whether PARS would make
Read more: Four cities tackle growing pension costs
Why city retiree costs will jump so significantly has mostly to do with generous employee benefits past officials negotiated. The city's police union members hired before 2013 receive a "3 at 50," meaning they get 3 percent credit for each year they worked and can retire as early as age 50.
That means a 30-year veteran can earn 90 percent of their highest-earning year in retirement. A pensionable income of
Retirees in
Butler said the city's retiree health benefits are not the biggest concern, because over time the city has reduced those benefits.
Not everyone likes the idea of prefunding or creating another account to pay for retiree costs. Critics say it's essentially creating another pension system, as dependent on the market as CalPERS.
CalPERS recently downgraded its expectations on how the market will perform, from 7.5 percent to 7 percent. That's causing cities to pitch in significantly more. When the market underperforms, taxpayers pick up the difference.
In a report released by the
Read the report here.
Instead, employers should instead offer modest wage increases, which make compensation packages less backloaded and allow for far greater transparency, Eide recently told The Star.
Butler said no decision will be made Tuesday. If the council decides to join PARS, it will direct staff to return with an agreement at a later date.
Also at the meeting, the council will vote to name an interim deputy city manager to succeed
As a public retiree collecting a pension, Mendenhall can hold the position up to 960 hours in a fiscal year. She would be paid
Butler said he hopes the city will by that time be in a position to hire someone permanently for the position.
Tuesday's meeting will start at
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