BAKERSFIELD, CA- A battle is brewing over the county's retirement fund. The County Administrative Office said it's considering a plan to reduce the taxpayer contribution to retirement benefits.
But county employee unions are concerned this plan may take away what's been promised to them.
This plan is still very much in the consideration phase.
But basically the county wants to move money that would go from an overfunded supplemental retirement fund to an underfunded main retirement fund. It's like if you had a savings account and a large credit card debt, should you wait to pay your credit card when you have the money?
"The county administrative office is looking into the idea of using excess earnings that are not needed by one part of the retirement fund to the main retirement fund," said Allan Krauter, administrative analyst of the Kern County Administrative Office.
In other words diverting money into the main fund that would have gone to the supplemental reserve.
The Supplemental Retirement Benefit reserve or SRBR is currently funded by the county's excess investment earnings. It's used to give additional money to retirees to account for inflation but right now the county says its overfunded.
"That means it has more than enough money to pay all future and current," said Krauter.
In fact they have double. According to the county they have $117 million but need $58 million.
But the main fund only has 60 cents per dollar owed which is why last year the county spent $200 million of the general fund on retirement. Krauter said this plan could curb taxpayer contribution to retirement.
"All we are saying is stop pouring money into that when we really need it in the pension fund," said Krauter.
The concern is that this may divert money the supplemental fund may need later but Krauter said this plan would ensure the fund is always at 120 percent.
"The supplemental fund would always be there. Our proposal would ensure it would always be there," said Krauter.
Union leaders have been briefed but aren't yet taking a stance.
"We just have to speak with all the leaders of our local before we can make an opinion on this," said Regina Kane, President of the Kern County Chapter of the SEIU Local 521.
"We liken to you have to make sure you have plenty of meat and potatoes on the table before you have desert," said Krauter.
The board was supposed to take up the item on Tuesday but decided to wait until they could foster more union support.