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President’s Message

By Susan Mallett

Happy December to us all. The year has certainly flown by. As you know I am finishing my term as your President after serving in that position for the past five and a half years. I have enjoyed working with a supportive RESDC Board as we carried out the association’s primary mission to advocate on your behalf. Through my tenure, I have written 65 President’s Messages but who’s counting? Those of you who have contributed to monthly newsletters will appreciate how frequently the deadlines come around and how at times you may search for the right topic. Nevertheless, it has been my pleasure to write to you each month.

In preparation for this last message, I reread my first article in the July 2010 newsletter. At that time, we had selected our slogan, “Honoring Yesterday-Protecting Tomorrow” through a member slogan contest to illustrate the mission of the association. We have incorporated that slogan in all our communications and more importantly, in all our association activities. For example, to honor good works, we have recognized a volunteer of the quarter and year for the past two years. You can read about former board member, Mila Thurber, our volunteer of the year on page 2. We hope you agree that we are protecting our collective tomorrows whenever we address an issue at the Board of Retirement. Over the past few years, this has included presenting RESDC’s position on the Supplemental Benefit Allowance (SBA), the health plan administrative fees to be paid by participants and more recently the significant administrative changes at SDCERA. We believe our reasoned statements have influenced Board of Retirement discussions on important matters of concern to our retirement system members.

In 2012, we began the recruitment and selection of the association’s first full-time Executive Director, Denise Price. Although Denise’s time with RESDC was a short 16 months, she fine-tuned our association operations and efficiently managed the day-to-day activities to provide support to our board members. She worked tirelessly with a commercial realtor and Board Officers to locate new RESDC office space. She moved us forward in so many ways. In July 2014, Mark Nanzer became our Executive Director and literally hit the ground running. His education about our pension system began during the most turbulent times at the Board of Retirement. While representing RESDC at the County level, Mark connected with a number of County staff and services. Through his efforts, RESDC became a recognized partner in the County’s Live Well San Diego initiative to improve the health and wellness of all County residents. Additionally, the recent Coming Home to the CAC event was a success in large part due to Mark’s hard work.

Our association has accomplished a great deal on behalf of County retirees over the past 54 years through the dedication of volunteer Board members and RESDC staff. The addition of an Executive Director certainly enhances the association’s advocacy and overall operations. The exposure of our association to active County employees through communications and attendance by RESDC staff at County events has increased as well.

All members can be assured that RESDC leadership and management is in good hands. I look forward to continuing on the Board as Past President during the next board election cycle. Thank you for your support and kind compliments, I will leave office with many fond memories.

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Thank You President Susan Mallett!

By Mark Nanzer

President Susan Mallett and President Elect John McTighe at the 2015 RESDC Health Fair Picnic.

As reported in the September 2015 edition of the NETWORK, Susan Mallett’s term as RESDC President will come to an end as of December 16th, 2015. Susan has served admirably as your President since July 2010. I’m sure you’re all aware that Susan and the rest of the RESDC Board are volunteer champions on behalf of all San Diego County Retirees. Serving as President requires a commitment of many hours which is necessary to carrying RESDC’s mission forward.

My goal with this article is twofold. First, for those of you who don’t know Susan, I thought I’d give you a peek into Susan the person. Second, it gives me an opportunity to provide a sample of Susan’s accomplishments as President.

Susan was born in Pennsylvania, but she was raised in  Texas. At age six, Susan’s father passed away and her mother moved the family to San Diego to pursue a job opportunity at the aircraft manufacturing company Convair. This move allowed the family to reconnect with its roots, as relatives that resided in Bakersfield were part of the Native American Shoshone tribe. Susan was able to spend quality time and get to know her relatives at this time of her life.

In college, Susan met the father of her children. At this same time she applied for a position at the County of San Diego Probation Department. In her 24 years at the County she worked as an entry-level correctional officer and rose up to serve as Deputy Chief of Institutions until her retirement in 2006. While she was working, Susan attended San Diego State University and received both her Bachelor’s Degree in Psychology and a Master’s Degree in Counseling.

Susan has four grandchildren, two of which are teenagers and the other two toddlers. While Susan has been an integral part of her grandchildren’s lives, since September 2014, she has taken on the additional responsibility of raising her teenage grandson.

Susan is an avid fan of the San Diego Chargers and Padres and her favorite travel experiences were cruise/tours to Alaska, and road trips to Oregon and Washington State. Susan has been in a relationship for 17 years.

During her Presidency, Susan has led RESDC on a variety of fronts. Succeeding Past President George Shoemaker, she worked with the Board and members on leading advocacy efforts against threats to the Tier A supplemental benefit allowance; regularly educated RESDC members on continuing attacks on public pensions; hosted 1937 Act counties at a successful CRCEA conference; recruited and hired RESDC’s first Executive Director in its 54 year history; attended and monitored SDCERA Board of Retirement and Health Benefits Committee meetings updating members on issues ranging from health plan renewal rates to the transition of SDCERA’s Investment Portfolio from an outsourced to in-house Chief Investment Officer model; and, received a proclamation from the Board of Supervisors designating RESDC as a Live Well San Diego recognized partner.

These are just a sample of the many efforts and activities Susan led in her tenure as President.

In closing and on a personal note, as RESDC’s second Executive Director, it has been my sincere pleasure to serve the Board of Directors and Susan. Susan has been a tremendous mentor to me and I couldn’t have asked for a more fulfilling working relationship.

I look forward to continuing our work together as Susan assumes the role of Immediate Past President, beginning in January 2016.

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Volunteer of the Year

Congratulations to Mila Thurber for her selection as our RESDC Volunteer of the Year. Mila is a County of San Diego retiree as well as a Federal retiree who worked for the State Department. She served on the RESDC Board from 2013-2014 and remains an active volunteer in many RESDC activities. If you have attended an event in the past few years, Mila may have taken your photo.

She often spoke fondly of annual events held for retired State Department employees that encouraged fellowship and in essence “Welcomed Home” the retirees. Her enthusiasm to have a similar event for County retirees was the inspiration for our successful Coming Home to the CAC event held on October 8^th. This was a wonderful opportunity for the 70 attendees to see the County’s Waterfront Park at the historic downtown County Administration Building, to share experiences with fellow retirees, and to hear from County leaders and employee representatives.

Thank You Mila for “planting the seed” for this event and for your continued contributions to RESDC.

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2016 Budget Summary

The budget proposal below will be voted on by the General Membership at our Annual Meeting (Holiday Luncheon) on December 16, 2015.

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Changes to Bylaws

By Mark Nanzer, Executive Director

At the February 12, 2015 RESDC Board of Directors meeting, Board members reviewed and approved the following revisions to the Bylaws.

The revisions will be presented to RESDC membership at the annual meeting in December for ratification and inclusion into the Bylaws:

ARTICLE VIII – OFFICERS, BOARD OF DIRECTORS, AND STAFF
Section 8
The Treasurer shall receipt for, or cause to be receipted for, kept or disbursed, all money and other assets of RESDC in such manner as may be authorized by the Board of Directors. In addition, the Treasurer shall: render an accounting of all RESDC money and other assets owned or received and disbursed at the close of the fiscal year and on such other reasonable occasions as may be requested by the Board of Directors; make available all records to the Audit Committee for the preparation of the annual financial review or audit report; and prepare and submit, or cause to be prepared and submitted, necessary tax reports.

ARTICLE VII – COMMITTEES
Section 3
The general functions of the standing committees are:
a.   Audit: This committee shall ensure independent financial reviews or audits of RESDC’s records and accounts, prepare and submit financial review or audit reports to the General Membership annually, or more frequently if requested by the General Membership or Board of Directors; and complete and submit a physical inventory of the RESDC capital equipment as directed by Bylaws Article IX, Section 4.

ARTICLE IX – FINANCIAL
Section 4
Following the close of the fiscal year, the Audit Committee shall cause a financial review of the records of RESDC to ensure that the financial statements are in conformance with generally accepted accounting principles. In addition, the committee shall inventory the capital equipment. The financial review report and the inventory shall be presented to the Board of Directors for review after which the report shall be presented to the members at the next membership meeting.

If determined necessary by the Board of Directors, the Audit Committee shall cause an independent audit of the records of RESDC to ensure the adequacy of RESDC’s internal controls.

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Another Episode in the Reed/DeMaio Ballot Initiative Drama

By Stan Coombs, Director

Our last article (“Public Retirees in the Cross-Hairs ….Again!” October 2015 NETWORK) had just been submitted for publishing by the October 10^th deadline, when news came that the 2015 “Voter Empowerment Act of 2016” ballot initiative, described in that article, would be withheld. And that the proponents, former San Jose Mayor Chuck Reed and former San Diego City Councilman Carl DeMaio, had filed two new proposals attacking California public pensions.

This is yet another episode in a multi-year, political horror show. Reed and DeMaio have quite a history, disassembling public retirement.

As Mayor of San Jose in 2012, Reed successfully promoted a City Proposition B, which reportedly gave San Jose City employees the ugly option of accepting lower pensions or increased contribution rates to pay off system debt. The courts ultimately ruled that forcing lower pensions violated constitutional protections.

That same year, former San Diego Councilmember DeMaio successfully promoted a different Proposition B, which eliminated defined benefit pensions for new San Diego City employees, substituted a defined contribution system, and limited compensation used to calculate pensions. The courts prohibited some provisions of that measure as well.

Then in 2014, Reed filed another statewide ballot initiative that would have removed state constitutional protections for promised public employee pensions, except benefits that could be calculated from years of actual service (“Here Comes The Next Volley February 2014 NETWORK”). Lifetime promises included in the original employment agreement would no longer count.

Apparently Reed didn’t like the official title and summary of the proposal, drafted by California Attorney General Kamala Harris, and sued. He lost the decision. There was also controversy about reports that former Enron executive and hedge fund manager John Arnold had financed the measure. Reed didn’t proceed to collect the required signatures.

Advance to earlier this year. Reed and his associates filed the retirement-hostile initiative described in “Public Retirees in the Cross-Hairs . . .Again!” It would also have prohibited defined benefit retirement plans for new employees in virtually all California public agencies, and, threatened the financial viability of current and retired employee pensions. Reed played to the voters, naming it, “Voter Empowerment Act of 2016.”

State Attorney General Kamala Harris tempered Reed’s proposed title so it officially read, “Employees. Pensions and Retiree Healthcare Benefits. Initiative Constitutional Amendment.” She also summarized the major provision of the proposal as, “Eliminates constitutional protections for vested pension and retiree healthcare benefits for current public employees, including those working in K-12 schools, higher education, hospitals, and police protection, for future work performed.”

Rumors had it that Reed’s financial supporters backed away due to the politically unattractive language.

Now Reed and DeMaio have reemerged. In the first of the two new initiative proposals Reed and DeMaio filed in early October, the language of their original “Voter Empowerment Act of 2016” has been revised.

Public employers are still prohibited from paying more than half the total cost of retirement benefits for new employees (including unfunded liability costs) without approval of the voters; it still limits challenges against the initiative to the courts (excluding the California Labor Board); it still applies the provisions of the initiative to all future negotiated labor agreements; and, it continues to grant any California citizen legal standing to intervene in court to defend the constitutionality of the provisions, at public expense.

The second of Reed and DeMaio’s latest initiatives, “Government Pension Cap of 2016,” is shorter. The main provision prohibits government employers from contributing more than 11% of base pay for new employees’ retirement benefits, and more than 13% of base pay for new safety employees’ retirement benefits, and defines such retirement benefits to include healthcare, Social Security, and deferred compensation. It states, “All other costs, including unfunded liability costs, of a new employee’s retirement benefits will be the responsibility of the employee, unless the voters of that jurisdiction establish a new limitation.”

Since Social Security requires 6.2%, there seems little left for pensions and healthcare.

Reports have it that Reed plans to proceed with whichever ballot proposal is assigned the most politically attractive title and description by the Attorney General.

Presumably, these latest proposals target the November 2016 ballot, and would require gathering over 585,000 registered voters’ signatures, 8% of the voters in the last (2014) gubernatorial election, at costs some estimate at $2.5 million to $3.5 million. It’s pretty clear Reed and DeMaio expect support from the 1%, like billionaire John Arnold.

Be very careful about petitions you’re asked to sign in shopping malls.

San Diego County Employee Retirement net assets increased $74.4 million during July and the fiscal year to date, increasing total plan net assets to $10.41 billion.

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Board Member Profile

Merrillyn Carpenter – A member of the RESDC Board of Directors for seven years, Merrillyn retired from the Probation Department in 2006 with 31 years of County service. She worked as a Personnel Administrator and Budget Manager during her career in Probation, and also served as Acting Director of the Equal Opportunity Management Office in 1983-84.

Merrillyn has a Bachelor’s Degree in Business Administration (Finance). Aside from her RESDC service as Second Vice President and a member of the Executive Committee, her enjoyable retirement activities include volunteerism with the San Diego Humane Society since 2007. With the Humane Society she walks dogs, assists with pet adoptions and dog training, and helps with the fostering of animals.

Merrillyn also serves on the Board of Directors of El Caballo Park in Escondido, where she worked to convince the City Council to forego building Water Department buildings so land could be provided for a park. The park’s emphasis will be on activities with horses and dogs in programs for wounded veterans and the disabled.

Her favorite travel experience was a trip with friends to France where they enjoyed many day tours to take in the sights and sounds.

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Theo and Evelyn Yakel Scholarships – 2016

By Carlos Gonzalez, RESDC Scholarship Committee Chair

The Theo and Evelyn Yakel Scholarships are available again this year from the Yakel Scholarship Fund through the San Diego Foundation.

To be eligible to apply for the Yakel Scholarships, the applicant must be a child, grandchild or great-grandchild of a RESDC member, a high school senior, an American citizen, and must plan to attend a two-year or four-year college in the United States. The scholarship must be used for tuition, books, or fees.

The two-month application period opens December 2, 2015 and closes February 3, 2016, (2:00 p.m.) Applicants should go to www.sdfoundation.org and fill out the Common Scholarship Application to be considered for the Theo Yakel Scholarship as well as other scholarships they might qualify for. For further information, please call the San Diego Foundation at (619) 814-1343.

A document verifying that the sponsor (parent,  grandparent, or great-grandparent) is a RESDC member must be attached to each application filed. This document can be obtained by calling the RESDC office at (866) 688-9229 or sending an e-mail request to resdc@resdc.net. The foundation requires this document be verified and signed by a RESDC staff member and will not accept an application without this document.

Details concerning the RESDC Scholarship Program will be in the January issue of the NETWORK.

PLEASE NOTE: All eligible high school seniors are encouraged to apply for both the RESDC and the Yakel Scholarships. It is allowed for an applicant to be awarded both scholarships. Good luck to all!

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Pension Facts

Public Pensions
Underfunding Since 2001

By Chris Heiserman, Director

In 2001 the San Diego County Employees Retirement Association (SDCERA) pension fund was 106.8% funded. Twelve years later in 2013 its funding ratio was 79%. While SDCERA’s fiscal condition is among the healthiest public pension systems in California and across the nation, it is fair to pose the natural question: What happened?

It turns out nearly all state and local pension plans were fully funded or near it in 2001, and most are now significantly “underfunded” compared to the full cost of promised future benefits. This is not a crisis as claimed by public pension opponents because time horizons of 30 years or more for most retirement funds to amortize their liabilities will allow them to catch up; and Fitch Ratings, the global credit ratings and research organization considers a 70% funded ratio to be an adequate current standard for these long term plans. Still, the mission of SDCERA and hundreds of other public pension systems to properly fund benefits for millions of active and retired workers over the life of the funds will be challenging and require savvy investing, fiscal discipline, and perseverance.

A recent briefing paper prepared by leading analysts from the Center for Retirement Research at Boston College describes the evolution of this 12-year slide in unfunded liability for most of the 150 retirement systems in a Public Plans Database (PPD). The database is maintained through a partnership of the Center for Retirement Research and other national organizations interested in providing objective, accurate information about some of the nation’s largest public pension plans.

The briefing paper is titled, “How Did State/Local Plans Become Underfunded?” It can be perused in full at this link: http://crr.bc.edu/briefs/how-did-statelocal-plans-become-underfunded/ . The report shows that the road to underfunding was paved by several distinct factors, mainly poor investment returns, inadequate contributions, and increased benefits.

The analysts point out that while all plans were seriously hurt by two financial crises in the market between 2001-2013, the plans that are now the worst off were also undermined by failure to make sufficient contributions and by earnings assumptions that were too optimistic (If they didn’t earn the eight percent projected for their portfolio, the shortfall to cover future benefits grew.)

The report tracks the experience of the Georgia Teachers Retirement System (TRS) from 2001-2013 as an example of how the funding status of pension plans can change from year to year. The Georgia teachers fund was fully funded in 2001 (108.5%) and dropped to 68.9% by 2013. The bottom line number is the Unfunded Actuarial Accrued Liability (UAAL) – the shortfall between current assets and what’s needed to fund all future benefits.

The biggest negative impact on public pension plans overall has been poor investment returns; however, like many plans that were fully funded in the early 2000s, the Georgia TRS used its surplus to reduce contributions for several years below the level to keep up with accruing benefits. As we know in California many public plans also used their surpluses to enhance benefits.

The beauty of having a database with historical information on so many major public retirement plans (including 15 in California) is the ability to compare pension systems and their track records across the variables that impact their ability to meet their goals. By looking at the relative significance over 12 years of investment returns, contributions, benefit changes, actuarial experience, assumption changes and other factors, anyone can see whether the major reason for an individual pension plan’s underfunding was poor investment returns, lack of contributions, etc.

The authors of this intelligent analysis describe their brief as a “tool” to utilize in examining the “story” of public pension plan underfunding on the ground in each case. The numbers paint a clear picture that is often obscured in political debates where public pension critics blame all retirement funding woes on their assertion that public employees receive benefits that are too “lucrative.”

That, of course, is a myth that will continue to be the topic of RESDC and NETWORK communication efforts on an ongoing basis.

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See’s Candy Certificates

Great Holiday Gifts! Purchase from RESDC for Less!

See’s Candy is now priced at $18.50 per pound if you buy it at one of their stores. RESDC members can purchase See’s gift certificates from us at $15.50 each.

If you would like to order certificates from our office, please address an envelope to RESDC, 8825 Aero Dr., Suite 205, San Diego, CA 92123. Enclose a check made out to RESDC for $15.50 for each certificate.

Also enclose a business size (#10) self-addressed stamped 49¢ envelope as the certificates will not fit in a small envelope. If you order over five certificates, please put 71¢ postage on the self-addressed enclosed envelope. Please include a stamped envelope for every 10 certificates. Candy certificates are redeemable at any of the See’s retail stores for ready-packed or specially packed boxes.

Incidentally, there is no expiration date on these certificates. See’s Candy Certificates are available through RESDC all year long.

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Annual RESDC Health Fair Picnic

The annual Health Fair Picnic was held on October 28th. RESDC members gathered for fellowship, food, and to learn about the 2016 medical and dental plans.

RESDC Member, Rita Martin and SDCERA Chairman, Skip Murphy, enjoyed the annual Health Fair Picnic.

View more photos in the Health Fair Picnic 2015 gallery.

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Annual RESDC Holiday Luncheon

Wednesday, December 16, 2015
Social Time 11 am-11:30 am
Lunch will be served at 11:30 am
Bahia Resort Hotel, 998 W. Mission Bay Drive, Mission Beach
Cost: $22 per person

Menu: Roast Turkey Dinner or Vegetarian meal.

Program: Point Loma High School Choir, President’s Welcome, and approval of the 2016 Budget.

Reservations: Reservation forms and payment must be in our office by Wednesday, December 9th. Cancellations must be received by December 9; no refunds can be made after that date. Reserved tables will be provided only for groups of ten. No Exceptions. All ten names must be on one reservation form with payment for all ten on one check. Indicate on the reservation form (click this link to open the printable PDF form)  the names of those in your party and include payment for all. Please make your check payable to RESDC, enclose it along with the form and mail to: RESDC, 8825 Aero Dr., Suite 205, San Diego, CA 92123. Badge and raffle ticket packets should be picked up at the registration table at the event. They will not be mailed. If handicapped seating is required, please call our office at (866) 688-9229.

Directions: From I-5 South, take Sea World Drive to West Mission Bay Drive. From I-5 North and I-8 West, take “Beaches” to Sports Arena/West Mission Bay Drive. Bahia is on north side of West Mission Bay Drive.

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Welcome New Members

Deborah Conkin-McIntyre – District Attorney
Vivian W. Demaree – Health & Human Services
Douglas Rolan – Right-of-Way
Nedra J. Saunders
Yaroll R. Van De Vin – Health & Human Services

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In Memoriam

John Anderson – Sheriff
Donald R. Berdan – Medical Examiner
Norris Bernard – General Services
Laura Brink – Superior Court
Harry Bruggemen – Social Services
Flora Deiter – Social Services
James Ditslear – Sheriff
Mary Galer – EDP Services
Adrienne Green – Surviving Spouse
Carl R. Inman – Social Services
Jesse Irby – Public Works
Larry Jacobson – Health & Human Services
Hubert Johnstone – Agriculture Weights/Measures
Douglas Karrel – Surviving Spouse
Laura Kohr – Sheriff
William Kolender – Sheriff
Jeanette Krum – Surviving Spouse
Kerry M. Lauzon* – Sheriff
Nathaniel N. Lawrence – Sheriff
Earl McFarland – Health & Human Services
Dora McGlocklin – Surviving Spouse
Patricia Merriott – Health & Human Services
Arthur Mikles – Social Services
Mary Morey – Surviving Spouse
Marshelle M. Newby* – District Attorney
Robert Nievergelt – Public Works
Ernest Norwood – Registrar of Voters
Kathleen Oldsen – Surviving Spouse
Betty A. Perry – Social Services
Cheryl Robinson – Health & Human Services
Maxine Roley – Surviving Spouse
Bernice Rose – Surviving Spouse
Frances C. Sievers – Welfare
Paula Snyder – District Attorney
Leroy Steverson – Surviving Spouse
Patsy Stotts – Surviving Spouse
Elmer E. Taylor* – Health & Human Services
Wesley Vanhorn – Parks & Recreation
James Waring – Social Services
Craig Whitecotton – Health & Human Services
Helen Young – Surviving Spouse

*Active

Gone from our sight, but never our memories.
Gone from our touch, but never our hearts.

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