A proposal to change Ventura County’s public-employee pension system from a defined-benefit to a 401(k)-style system would save taxpayers $5.4 million in cash flow over the first two years and $51.6 million in cumulative savings over five years of reform, according to a study by the Los Angeles-based Reason Foundation, a libertarian think tank.
The initiative would result in $460 million in total savings over 15 years while at the same time eliminating $1.8 billion in pension debt, according to the study, which was commissioned by proponents of the ballot measure.
“The Ventura County Employees’ Retirement Association is poorly positioned to stay properly funded in the coming years, and local taxpayers may be forced to pick up a hefty tab of unfunded liabilities if substantive changes are not made in the near future,” Reason said. “An initiative by county residents would address the risk of long-term liabilities by putting new hires into a 401(k)-style defined-contribution system and phasing out the defined-benefit system over time.”
The proposal requires no extra costs to taxpayers, Reason found.
Citizens for Retirement Security — a coalition of Ventura County firefighters, police officers, public workers, retirees and citizens — responded on Friday by calling the study “propaganda from an anti-worker, anti-government group funded by the Koch brothers.”
“Clearly, the proponents of this expensive initiative scheme are afraid of the facts from the independent review of their measure by the county, so they’re trying to cook the books in advance,” group spokesman Ed Lacey said in a statement. Segal Consulting, the actuary for the county pension system, has not yet completed its analysis of the proposal.
Previous debate in the Business Times:
- “The case for a defined contribution system in California,“ by Business Times Editor Henry Dubroff
- “Ventura County pension proposal is costly and unnecessary,” by Ventura County Sheriff Geoff Dean
- “Ventura County pension proposal is about retirement plan fairness,” by Randolph Hinton, a member of the Committee for Pension Fairness
- “Pension investments are fundamentally sound,” by Rick Shimmel, the executive director of the Ventura County Deputy Sheriffs’ Association