Public employee pensions are a hot topic around California, and in Camarillo it’s no different.
The California Public Employees’ Retirement System, or CalPERS, is lowering its expected rates of return, meaning public agencies will have to pay more to cover their employees’ pensions.
In the City of Camarillo, which has funded only about 70 percent of the money it will owe current and former workers, council members are taking extra steps to pay down $30 million in unfunded liability.
At the July 11 City Council meeting, the council voted unanimously to take $5 million out of the city’s general fund—which is used to pay for essential services like police and fire—and place it in a Pension Rate Stabilization Program trust managed by Public Agency Retirement Services, a Newport Beach-based company that specializes in retirement plans for public agencies.
The city’s stated goal is to pay down its debt over a period of 20 years.
Camarillo joins over 150 municipalities around the state that are investing in similar trusts to address unfunded liability—the gap between what has been set aside to pay retirees and what is actually owed.
Money in such trusts can be used only for pension costs. Just this month, the City of Thousand Oaks put $22 million into its own trust.
The vote in Camarillo comes after about a year and a half of discussions about pensions, including several study sessions.
“We’re trying to manage (stock market fluctuations) and to get ourselves in a position where we don’t have that unfunded liability,” Councilmember Jan McDonald said during the July 11 meeting.
The trust allows the city greater freedom to control how its money is invested than does CalPERS, which some council members criticized for frequently changing the amount of money public agencies would have to pay to fully fund pensions.
Councilmember Tony Trembley said CalPERS reminds him of Lucy from “Peanuts” pulling the football away from Charlie Brown just as he goes to kick it.
“I think they just move the goal posts all the time,” he said.
Council members said the city could invest more in the trust if warranted by an annual review of the trust and updated predictions from CalPERS.
Mark Uribe, the city’s assistant director of finance, said the money will be invested in installments over the next six months.