Officials in Stanislaus County have been negotiating with unions to scale back benefits for new hires in order to reduce the county’s long-term pension costs. Many leaders contend that retirement benefit increases that went into effect in 2002 cannot be sustained for new hires and that it was even a mistake to implement the increases for employees back in 2002. If such a change is implemented through new labor contracts, officials say the county will be able to bank on long-term savings, but next year’s budget will still require hefty funding from the county to the Stanislaus County Employees' Retirement Association, which manages the pension for the county, Ceres, the Superior Court and five special districts. The Bee reports:
“The generous benefits were granted at a time when the stock market was enriching StanCERA's investment portfolio; however, the association suffered $400 million in investment losses from 2008 to early 2009. The mistakes of previous forecasts created a false impression that employers had adequately funded the system. The county's rising cost of supporting the pension system threatens deep cuts to staff and public services.”
According to the terms of a new contract, anyone hired after Jan. 1, 2011 will retire at 61 instead of 55 and will be based on 2 percent of one’s salary multiplied by the employees' years of service. These terms will affect new hires for the Community Services Agency and Health Services Agency employees, which currently has 580 members. Efforts to root out pension spiking are also being made for the sake of the county’s finances. Currently, its retirement system is little more than 70 percent funded. For more on how the county is addressing pensions, see
here.