Published: February 18, 2014
When talking about a lifetime commitment, it’s always best to take the long view. There will be ups and downs, but keeping a level head will help see you through. With the 2008 Great Recession, local governments in general and pension funds in particular faced a serious down. But those dedicated to finding real solutions are succeeding.
The Sonoma County Employees’ Retirement Association (SCERA) is stable and secure. SCERA assets are approximately $2.28 billion as of December 31, 2013. SCERA earned a 20.0% return (gross of fees) in 2013 with a prudent, balanced investment portfolio. As a result, it’s not unreasonable to expect that the next valuation will show the fund to be more than 80% funded on an actuarial basis and over 90% funded on a market value basis. Over the last 10 years, including the Great Recession, SCERA’s gross investment returns have averaged 7.2% a year; over the last 20 years, 8.0%.
The County employee pension plan is a good deal for taxpayers. With SCERA, the County provides a competitive pension for its employees for current contributions of less than 4% of the total County budget. National studies show that employee contributions and investment earnings pay the bulk of the benefit cost for a package of pension benefits like SCERA offers; the employer typically only pays about one quarter of the cost of the pension benefits. In Sonoma County, Legacy Plan employees pay, on average, roughly 12.5% of their pay into the retirement system. New employees, who are getting a reduced pension benefit, pay different rates.