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Pension opponents won’t appeal court defeat

By   /   Wednesday, August 6th, 2014  /   Comments Off

A proposal to overhaul Ventura County’s public pension system appears dead after the Ventura County Taxpayers Association said it will not appeal a judge’s Aug. 4 ruling that tossed the ballot measure.

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A proposal to overhaul Ventura County’s public pension system appears dead after the Ventura County Taxpayers Association said it will not appeal a judge’s Aug. 4 ruling that tossed the ballot measure.

The taxpayer group said Wednesday that it will not fight Ventura County Superior Court Judge Kent Kellegrew’s decision on Monday to strike the controversial proposal from the November ballot. The measure gathered 40,000 signatures.

If approved by voters, the measure would have switched all future Ventura County government employees from a defined-benefit retirement system, which is the norm in the public sector, to a 401(k)-style defined-contribution system. Defined-contribution systems are less risky for employers and are similar to what private-sector workers retire with.

The Ventura County Taxpayers Association, the main advocacy group that had supported the proposal, told the Business Times on Aug. 6 it would not appeal the judge’s decision.

“People have the right to petition their government,” the group said in an emailed statement. “It is a bedrock principle of our democracy, and this flawed ruling silences the voice of tens of thousands of Venturans who desired nothing more than the right to be heard. It is appalling to be stripped of this opportunity. For the unions to sue to deny an election is troubling proof of their fear of public opinion.”

The group said it won’t pursue further litigation related to the Ventura County measure, which had received 40,000 signatures — 14,000 more than the required 26,000 to be certified for the county ballot.

The group had claimed the retirement overhaul would have helped to close the gap in the county’s underfunded pension system. The proposed measure would have affected only new hires, starting in July 2015. Current employees and retirees would have kept their pensions.

In the ruling, Judge Kellegrew didn’t offer an opinion on the merits of public-pension reform, but stuck with a strict reading of current state law. Because Ventura County had voluntarily chosen to enact a 1937 state law, the county was bound to only leave the act through its provisions, he wrote. Those provisions don’t include a ballot measure; to leave the system, Ventura County would need to petition the legislature.

“As a consequence, allowing this measure to be considered on the November ballot would only result in a waste of public resources,” Kellegrew wrote in his ruling. “If the initiative was adopted by the voters of Ventura County, the measure could not be implemented.”

By the county’s own estimates, Ventura County’s current pension system is underfunded, with almost $950 million due to be repaid over the next 15 years. Projecting both the cost of a pension system and estimated returns on assets is a difficult task. Future costs can drastically change depending on assumptions about lifespans, stock-market returns and other factors.

Currently, the county contributes $162 million to pension costs.

Citizens for Retirement Security, a union-backed advocacy group, sued the county over the proposed measure. The group argued that by shifting retirement risk to employees, it would be difficult to hire and retain quality county workers, including law enforcement personnel and firefighters. The subsequent increase in wages needed to attract talent would destroy any potential cost-savings on the pension side, they argued.

“The court has done the right thing in upholding California law and removing this illegal measure from the ballot,” Citizens for Retirement Security said in a statement after the ruling. “This is a victory for everyone who believes that all of us deserve a secure retirement and want to maintain the quality of life we enjoy in our county.”

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