County pension plan nearly 90% funded with more expected from surge in earnings

Ventura County’s pension plan with more than $6 billion in assets is nearly 90% funded, the highest mark since the period before the Wall Street crash of 2008, financial reports show.

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The funding rate of 89.57% for the 2019-20 fiscal year stands to go even higher once results are analyzed for the last fiscal year. That’s because the return on investments is estimated to reach an eye-popping 29%, said Art Goulet, a longtime trustee on the board overseeing the plan that covers employees of county government. 

“We’re getting a lalapalooza of earnings,” said Goulet, an elected representative of retirees who was speaking for himself and not as a spokesman for the Board of Retirement.

On track to be fully funded by 2038:Ventura County pension system funded at highest level in 10 years

The Ventura County government with almost 10,000 workers is by far the largest employer in the system that is formally called the Ventura County Employees’ Retirement Association. But workers in the Ventura County Regional Sanitation District, the Ventura County Air Pollution Control District and court employees are also covered.

Retirement Board Chairman Mike Sedell said the funding status near 90% is not going to drop significantly and could reach 100% in a few years.

 “Ninety percent is certainly one of the top in the state,” Sedell said last month after county government officials presented the positive results during a presentation on the state of their budget. 

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Sedell’s statement was confirmed by financial reports obtained by The Star for the systems that cover employees of most large county governments in the state, including Los Angeles, San Diego, Sacramento and San Bernardino as well as the large statewide systems. 

The giant California Public Employees’ Retirement System reported an estimated 70.6% funding status as of the end of the 2019-20 fiscal year, the time period The Star used to compare the various systems in California. 

CalPERS reported Monday that it expected to show 82% funding for the last fiscal year and cited a 21.3% return on investments. CalPERS covers state employees, workers in more than 1,500 public agencies, including city employees in Ventura County, and non-teaching school district employees.

The state teachers’ retirement system reported 67.1% for the 2019-20 fiscal year. Of the county systems that could be compared over the same time period, Ventura ranked highest at 89.57% and Kern the lowest at 64.4%.

The funded status is only one measure of the health of a pension plan, according to the American Academy of Actuaries, along with such things as the size of the pension debts and investment strategies. Still, the group says the goal should be to accumulate assets equal to 100% of pension obligations.

Ventura County’s funded status has plunged and peaked over the years, but officials called the run-up since 2008 a healthy sign.  

The funded rate fell from 91% in the fiscal year before the Wall Street crash in 2008 to 78% in 2012, but rebounded into the 80% range over the past seven years. It reached almost 89.6% as of June 30, 2020. 

In whole numbers, that means all but $704 million of the $6.7 billion in liabilities would be covered if the plan had to be dissolved and all debts paid at one time.

“It is a very healthy, positive percentage of funding,” said Mike Powers, executive officer of the county government, which established the plan decades ago. “That is important for people to know because it speaks to the financial stability of the county. I think right now we’re on a good path, and we’re increasing the funded percentage at a good rate.” 

Sedell tied the achievement to the pension board’s investment portfolio, strong returns over the past couple years, the ability of the multi-interest pension board to work well together and an accelerated schedule for paying off the unfunded liability.

Kathleen Wilson covers the Ventura County government, including the county health system, politics and social services. Reach her at kathleen.wilson@vcstar.com or 805-437-0271.

This article originally appeared on Ventura County Star: County pension plan nearly 90% funded with more expected from surge in earnings

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