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President’s Message

John McTighe, President

By John J. McTighe

This month will be a very busy one for RESDC and I hope you will join us for some or all of our activities. On October 5th we have the second of what I hope will become an annual event, the Coming Home to the COC (County Operations Center). The Coming Home event is an opportunity for retired employees to revisit County facilities, to see the changes that have taken place since their retirement, and hear from County Supervisors and executives about what’s currently happening in County government. We are excited to be going to the completely rebuilt COC this year where we will hear from the County’s Chief Operating Officer, Don Steuer.

Ten days after the Coming Home event, RESDC members will be walking as a team in the Walk4ALZ San Diego. RESDC Board Member Nellie Parks will be leading a team of retirees walking in Balboa Park on October 15th to help raise funds to find a cure for Alzheimer’s disease which affects so many older adults. If you want to join them, or just donate funds to support their efforts, please go to the RESDC team’s web page at: www.resdc.net/Walk4ALZ. All of the funds raised stay in San Diego County to benefit members of our community.

Speaking of diseases reminds me that this month is RESDC’s annual Health Fair Picnic providing members
with a great opportunity to find out about resources available to assist with staying healthy and to help us when we are ill. Representatives from numerous healthcare-related businesses will provide information and answer your questions. This year’s picnic will be held at Admiral Baker Field on Wednesday, October 26th from 10:00 am to 1:00 pm. We will be serving our traditional barbeque lunch from 11:30 am to 12:30 pm and we’ll be holding an opportunity drawing after lunch.

Last month I wrote about the demise of the Supplemental Benefit Allowance (SBA) previously received by Tier A retirees. Since then, the San Diego Union-Tribune wrote a misleading article that characterized the SBA as a “bonus check” received by retirees who were hired by the County between 2002 and 2009. Nothing could be further from the truth. The SBA was in fact a token offering to Tier A retirees to make up for the loss of healthcare benefits for life that have been, and continue to be, received by County retirees who retired earlier than the effective date of the Tier A enhancement. Most Tier A retirees viewed this taxable supplement to their vested pension benefit as money that could help them offset the considerable cost of healthcare coverage, whether purchased from one of the plans offered by SDCERA or on the open market.

With the loss of the SBA, affected members are faced with having to foot the bill for their healthcare coverage without any funds above their pension to help out. It’s important that those members (and anyone else who needs healthcare coverage) be aware of what coverage options they have. While SDCERA offers some very good healthcare plans for purchase by retirees, there may be other equally good plans at lower costs available. As an example, I experienced a significant reduction in cost a couple of years ago when I shopped around and found a Medicare Advantage Plan that allowed my wife and I to stay with our current healthcare provider, continue to receive our medications at lower cost, and had zero (yes that’s $0) premium. Our premium went from $250 a month per person to zero! There were some tradeoffs, however, that we had to be willing to make. Certain coverages that were in the SDCERA-sponsored plan were not included and, should we be faced with a catastrophic illness or injury, our out-of-pocket expenses would be higher. We had to evaluate whether we were willing to take the risk and to be prepared in case we needed to cover those higher costs. We decided the risk was worth taking. We dropped our very good SDCERA-sponsored plan and signed up for this other plan. It’s now been nearly two years since we switched and we have not had any unusual out-of-pocket expenses while we have saved $500 a month. Over a two-year period, that’s a cost avoidance of $12,000!

The moral of this story is that it pays to shop around for the healthcare coverage that’s right for you. Don’t assume that just because SDCERA offers sponsored healthcare plans, one of them is the best plan for you. The healthcare market has become more competitive over recent years and there are a number of resources in the community that can help you find the right plan. When all is said and done, you might find that a SDCERA-sponsored plan is the right choice for your circumstances. I’m not suggesting those plans are not good. In fact, just the opposite, those plans are outstanding and hard to beat for what they offer and I’m hoping SDCERA offers them well into the future. It’s just that not everyone needs the same level of coverage. The RESDC Health Fair Picnic will include representatives from an organization called My Senior Health Plan who can assist members in evaluating their healthcare coverage options. There are also independent insurance brokers and healthcare exchanges that provide similar services, most at no direct cost to the participant.

A number of very good volunteer opportunities have come to my attention, many more than we can publish in The NETWORK. However, one recently surfaced that I thought was worthy of passing along. The San Diego Zoo is looking for volunteers to be Information Ambassadors at both the Zoo and Safari Park. There is training involved and a minimum time commitment required, but the rewards include free admission to the Zoo and Safari Park and knowing that you would be assisting a world-class animal conservation organization. If you are interested, you can find more on their website at: www.sandiegozoo.org/volunteer.

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Recent Events

• The California Senate has given final legislative approval to implement the state’s Secure Choice retirement savings program for private-sector employees who lack access to a workplace plan. Governor Brown is expected to sign the bill.
• A state appellate court in San Francisco ruled unanimously that the California rule is not an absolute bar to modifying pension benefits that employees believe they are due. The court rejected a challenge by employee unions to Marin County’s implementation of the 2012 pension reform measure enacted by the Legislature and Gov. Jerry Brown. The “California rule” is a series of state court decisions widely believed to mean that the pension offered on the date of hire becomes a vested right, protected by contract law, that can only be cut if offset by a new benefit of comparable value.

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Earnings, Assumption Rates, and Benchmarks

By Stan Coombs, Director

I mentioned it at the tail end of last month’s article. The almost final figures are in for Fiscal Year 2015-16, and not good. We are told total net earnings of the San Diego County Employees Retirement Association (SDCERA) fund are 0.5%, compared to a goal of 7.5%, our assumption rate. And, the $700 million needed to fund last year’s retirement costs, will be added to the system deficit and amortized (paid off) over the next 20 years.

We’re not alone. Economics are off kilter globally, leaving many retirement portfolios in similar straits. The huge California Public Employees’ Retirement System (CalPERS) and California State Teacher’s Retirement System (CALSTRS) reported 2015-16 earnings of 0.61% and 1.4%, respectively.

But, over the six years prior to 2015-16, our County fund earned 13.39%, 20.91%, 5.46%, 7.78%, 13.39%, and 2.25%. The approved assumption rate was 8.0% and 7.5% during that period. We beat our long-term goal in four of the six years, producing considerable “excess earnings.” And, for the 25 years before 2015-16, earnings averaged 8.43% while the assumption rate remained at 8%.

The short game seems scary. In the long-term we’re doing fine, and public retirement systems are very long-term. Government agencies are permanent fixtures and public employees can contribute over a 40-year career and be retired for another 30. Fortunately, they’re long-term fixtures too.

The National Association of State Retirement Administrators (NASRA) says that more than half of investment income earned on assets accumulated to pay benefits is received after the employee retires. One or two down years doesn’t end the world.

But regardless, are our earnings as dramatically off the mark this year as it appears? Yes, if 7.5% growth is the expected performance. Turns out that’s not entirely the case. As usual, it’s more complicated than that.

Assumption rates are really long-term budgeting tools, calculated from economic factors to show reasonable expectations of future average earnings over an extended period, and allow those important budget calculations.

A given year’s retirement costs are calculated, an approved assumption rate provides average earnings expected, and simple arithmetic reveals the amount remaining to be funded by the employer and employee contributions through payroll deductions (total annual retirement funding required – assumed investment earnings = required employer/employee contributions needed, or thereabout).

But, the more precise tool used to measure performance is the “benchmark.” Exploring investment benchmarks raises the complexity a notch, but they are really just shorter-term, future, actual performance results of separate, independent investments, selected before the annual investment period to be measured, against which the eventual performance of a portfolio, or portion of a portfolio can be compared and evaluated. Are you still with me?

They allow boards of retirement to see whether and why their actual earnings differ from the performance of the selected benchmark during an investment cycle. A longer-term assumption rate and a shorter-term benchmark can decidedly differ.

For those interested in mind-numbing detail, SDCERA’s 2015-16 investment benchmark was multifaceted, reflecting the four categories of their portfolio. Forty-five percent of the portfolio was compared to Morgan Stanley’s All Country World Index – Investible Market Index, for equity comparisons. Twenty-four percent was compared to Barclay’s U.S. Intermediate Aggregate Index, for bond comparisons, eight percent was compared to U.S. T-Bills and twenty-four percent was compared to a combination of the National Council of Real Estate Investment Fiduciaries Index and Morgan Stanley’s Investible Market Index, plus an additional value.

So, while the 2015-16 SDCERA investment portfolio struggled with a 7.5% assumption rate, and actual earnings turned out to be only 0.5%, the approved portfolio benchmark, which presumably took into account the current, serendipitous market, lost 0.1%!

That means a theoretically equivalent portfolio to ours, selected by the Board of Retirement ahead of time for comparison purposes, lost money, and, albeit by a very slight margin, our SDCERA portfolio gained . . .0.5%. It can be said that our Investment Officer Stephen Sexauer beat his benchmark despite the wide variance from the assumption rate.

Do those comparisons really matter? The bottom line is that the County fund barely earned anything last year, and neither did many other major investors. July performance, the first month of the new 2016-17 fiscal year, was “up a lot,” according to Sexauer. But, he also reported that global economics are on strange new ground, with no precedents. There are low rates of return everywhere in the world and until that changes, “we are owned by that…” “The whole ability of the world to grow has been permanently lowered.” Guess we’ll see in 2016-17.

The detailed San Diego County retirement fund earning report for June represents the fiscal year-ending position, and won’t be available for some months. Meanwhile, fund net assets for July, the first month of the new 2016-17 fiscal year, increased $222.9 million, bringing fiscal-year-to-date changes to that same total, and total net assets to $10.5 billion

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RESDC Advocacy Efforts

By Mark Nanzer, Executive Director

Happy Fall everyone! I hope you all had an enjoyable Summer. I wanted to spend some time this month to focus on RESDC advocacy efforts. As our organizational mission states:

“RESDC is dedicated to advocating for retiree interests and providing pertinent information, social opportunities, and service for its members.”

You may be aware of our many years of advocacy efforts as demonstrated in numerous RESDC Board member articles in The NETWORK. What you may not know, however, is the hours of thoughtful discussion, planning, and analysis done by your Board of Directors to most effectively support these efforts. I have witnessed their dedication and commitment in a variety of ways.

Here are just a few examples of advocacy activities board members actively participate in:

• The San Diego Retirement Security Roundtable: A collaborative networking group dedicated to combining efforts to advocate at local, state, and federal levels focusing on retirement security issues. RESDC co-leads this group which is comprised of other retiree groups such as the City of San Diego Retired Employees Association, the California Retired County Employees Association (CRCEA), the statewide Retired Public Employees Association, and the National Active and Retired Federal Employees Association. Last year, this group developed a short list of common messages about retirement security that dispels myths about public pensions. The common messages are:
  • Retiree pensions contribute to the economy;
  • All workers should have retirement security;
  • Public retiree pensions are reasonable;
  • Public employees pay for their pension benefits.

  RESDC and our Roundtable partners have since prioritized these messages in our communications with retirees, in written response to media attacks on pensions, and to influence policy makers.

• RESDC and the SDCERA Board of Retirement: Our board members meet annually with BOR trustees to further establish relationships and gain trustees’ perspective on their role on the BOR. We also attend and monitor all BOR meetings in order to remain informed of actions taken by the board, of performance of the investment portfolio, and make public comment when deemed necessary. Lastly, we meet regularly with SDCERA leadership to maintain communication on issues of importance to our members.
• Membership in CRCEA: Each year, RESDC Board members attend and participate in two conferences hosted by CRCEA. These conferences provide a great opportunity for both learning and sharing to occur among all ’37 Act retiree associations. CRCEA leadership does a phenomenal job of pulling together leaders from the public employee arena who share their expertise and thoughts on issues important to all retirees.
• Monitoring relevant legislation: RESDC reviews state and federal legislation relevant to both active and retired public employees and communicates with our members on significant actions taken by legislators.

While these efforts have assisted in positioning RESDC as an advocacy leader on behalf of its members, I’m excited to announce that over the course of the next year, the implementation of a RESDC Secure Retirement Advocacy Policy that takes into account the following four objectives:

1. RESDC Policy Positions;
2. RESDC Advocacy Relationships;
3. RESDC Advocacy Strategies and Practices;
4. RESDC Retirement Advocacy Evaluation.

Stay tuned to The NETWORK for more information on the implementation of the Secure Retirement Advocacy Policy.

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RESDC T-shirts Are Here!

We are excited to announce the availability of RESDC T-shirts for purchase! Beyond being reasonably priced, the benefits of the new RESDC T-shirts are many. Here are a few reasons to get yours:

• Be the first to impress your fellow county retirees by sporting this very comfortable and fashionable shirt
• Proudly tell the world of your connection to RESDC
• As a retiree, you can wear it every day and not get in trouble with the boss, and of course…
• It’s a great gift idea!

RESDC T-shirts can be purchased for $11.00 plus tax at:
Custom Tees and Things
5450 Complex Street, Suite 306
San Diego, CA 92123
(858) 715-8211
Monday through Friday, 8:00 am-4:00 pm

You can have T-shirts shipped to you for a small shipping fee.

RESDC t-shirt sizes available:
Women: Small – XL
Men: Small – 2XL

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Attention RESDC Members: You’re Invited!
Coming Home to the County Operations Center

Wednesday, October 5, 2016
11:00am – 2:00pm
County Operations Center
5520 Overland Avenue, San Diego, 92123

The “Coming Home to the County Operations Center” event invites retired employees of San Diego County to come “back home” to celebrate the County of San Diego Operations Center (COC).

The vision for the COC is to create a campus that capitalizes on Kearny Mesa’s central geographic location to provide easily accessible government services for the public. The physical campus demonstrates the County’s commitment to a sustainable and well-designed government campus that provides long term value to the many users of the campus.

Program Highlights

• Reception including light hors d’oeuvres and refreshments
• Keynote Speech by Don Steuer, Chief Operating Officer, County of San Diego
• Resource booths hosted by RESDC, San Diego County Credit Union, SDCERA, County of San Diego Employee Resource Groups, Aging & Independence Services, Registrar of Voters, County Employee’s Charitable Organization, and Live Well San Diego
• Guided Tours of the COC Art Collection

Planning to attend? Visit www.resdc.net/resdc-events or call (619) 688-9229 to RSVP.

Click for larger image.

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Save the Date: December 14, 2016
Holiday Luncheon

The 2016 Holiday Luncheon will be held on Wednesday, December 14, 2016, at the Bahia Hotel, 998 West Mission Bay Drive. Mark your calendars now. The reservation form will be in the November and December issues of The NETWORK.

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Pension Facts

Network Media – Nonsense Overload

By Chris Heiserman, Director

The major cable and satellite network news outlets today are all about entertainment, conflict, and ratings. What gets shoved rudely aside in the mad dash to quench a perceived insatiable public appetite for drama and suspense is the old fashioned concept of fair, objective, and factual reporting.

Most consumers of national media would agree that Fox News reflects a right-wing conservative bias in political reporting while CNN and MSNBC occupy a more moderate to liberal position. But they all bombard their viewers with material that is more like a circus than a newscast. Any one of several political surveys done every week seems to qualify as “Breaking News.”

If you happened to catch the NBC Commander-in-Chief Forum on September 7th, you may have missed the day-long preview leading up to the main event. Each of the major networks had anchors, political analysts, reporters covering the presidential campaigns, and military “experts” expressing their opinions about what the candidates might say or should say to the audience of veterans on the aircraft carrier museum Intrepid. And, of course, there was a countdown clock on the screen displaying the hours and minutes to go before this historic town hall on national television.

When it came time for the forum itself, each candidate spent several minutes of their half hour touting their personal support for veterans and their families and several more minutes bashing their opponent. It seems the event organizers (Iraq and Afghanistan Veterans of America) deemed the event a success because it brought national attention to veterans’ issues. However, even they complained that a half hour and handful of questions to each candidate failed to produce much detail on how either presidential hopeful would address numerous serious challenges American veterans face.

Non-stop overblown news coverage is confusing and nonsensical; and you can watch totally opposite reports about the same events by simply switching channels. An alternative to struggling through the mainstream media chaff would be getting your news “fix” from National Public Radio (NPR) or public television which at least strives to be objective and non-partisan.

I am going to vote absentee as early as possible. At least then I can get on with my life secure in the knowledge that all the special interest money financing political robo-calls, negative political ads on television, and “hit” pieces in mailboxes is wasted on me.

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News Now Sample

Good news is worth repeating. The “News Now” link on the RESDC website Home Page will take you to short summaries and/or comments and access to recent full-length articles, reports or news bits about pension reform proposals, retirement-related commentary, and other interesting issues. News Now can be found on the RESDC website at: www.resdc.net/news-now.

For example:

UT Watchdog Wrong on Retiree Benefits
Posted on September 8, 2016
Headline: No more Pensioners’ bonus money – County runs out of funds for checks retirees received for nine years
Publication: The San Diego Union-Tribune
Article Date: September 2, 2016
Article Author: Lauryn Schroeder
Article Commentary by Chris Heiserman, RESDC Editorial Committee Chair
This Watchdog Report is wrong on the facts in several instances:

1. There were no extra checks—the benefit was included in retirees’ monthly disbursement.
2. Characterizing this benefit as a “bonus” is misleading—the fund was created when Tier A employees lost retiree health care benefits afforded longer term workers.
3. There are 8,600 Tier A retirees but not all of them were eligible for the benefit—only those with more than ten years County service.
4. Many Tier A employees were hired before 2002 and opted into the Tier A category for higher pension benefits.

The article’s link is: www.sandiegouniontribune.com/news/2016/sep/02/bonus-pension-checks-no-more/

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RESDC Day at the Races!

You are invited to join RESDC for an outing to the Del Mar Races on Saturday, November 12th.

The Bing Crosby Season will bring back the cool Del Mar vibe, fabulous Southern California weather, and quality racing. Named in honor of Del Mar’s iconic founder, you will enjoy top Thoroughbreds, great food and drinks, plus exciting promotions and concerts.

RESDC is offering for purchase, 5 inside tables (with 4 persons per table) at the Clubhouse Terrace Restaurant, located trackside. Tickets are $50 for a table of 4, or $12.50 for single tickets. Tickets are for admission only and not for food or parking expenses.
Ticket sales are on first come, first serve basis, so be sure to get your tickets now for this exciting event!

To purchase tickets, send a check made out to RESDC, to 8825 Aero Dr., Suite 205, San Diego, CA 92123. Tickets will be mailed to you.

DATE: Saturday, November 12, 2016

LOCATION: Del Mar Thoroughbred Club
Clubhouse Terrace Restaurant
2260 Jimmy Durante Blvd, Del Mar, CA 92014
(858) 755-1141

RACE DETAILS: 9 Races
Gates Open: 11:00 am
First Post: 12:30 pm

We hope to see you there!

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Announcing the RESDC Benefit Plans Open Enrollment

Dental, Vision, Pet, Car, Home, Legal, Life, Travel, Accident, and More

Near the end of October, all RESDC members will receive their 2017 RESDC Benefits Open Enrollment package. The benefits outlined in this package are available exclusively to RESDC members. In addition to the two high-benefit dental plans, there are also plans for vision, legal, pet, travel, accident, hearing aids, and much more.

You do not need to do anything if you are not making changes to your coverage. The Open Enrollment deadline is strictly enforced for RESDC dental plans and for SDCERA dental and medical plans. If you are currently enrolled in one of the dental or other benefit plans, your coverage will automatically continue for 2017.

At the RESDC Health Fair Picnic, on Wednesday, October 26, our benefit plans administrator, Pacific Group Agencies, will have insurance company representatives there to answer your questions.

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It’s Not Too Late to Join Team RESDC in Upcoming Walk4ALZ San Diego

By Nellie Parks, Director

RESDC is proud to be participating in the Walk4ALZ to raise awareness and funds to advance the fight against Alzheimer’s disease. Currently, more than 5 million Americans have Alzheimer’s disease and that number is expected to grow to as many as 16 million by 2050. Our future is at risk unless we change the course of this devastating disease. And there’s something you can do about it — walk with us. The walk is approximately 2.75 miles long.

The end of Alzheimer’s starts with you.

To register, simply visit the TEAM RESDC Walk4ALZ team page at www.resdc.net/Walk4ALZ and join my team. If you’re unable to participate, please consider making a $35 donation to my fundraising campaign. Thank you!

Walk4ALZ 2016 – Balboa Park

Date: Saturday, October 15, 2016
Where: Balboa Park, start by the Hall of Champions
2131 Pan American Plaza, San Diego, CA 92101
Registration at 6:30am | Ceremony at 7:30am | Walk at 8:00am

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Annual Health Fair Picnic

Sponsored by: Ameritas Dental, CIGNA Dental, Health Net, Kaiser Permanente, Pacific Group Agencies, Inc., San Diego County Credit Union, United HealthCare, and My Senior Health Plan

Date: Wednesday, October 26, 2016, 10 am – 1 pm

Location: Admiral Baker Field

All members, spouses and/or guests are requested to pay $5.00 each. The member’s picnic fee will be refunded/returned at the registration desk upon checking in, thus making the member attending the picnic free of charge. Picnic is held rain or shine.

The menu is barbecued beef, green beans, baked beans, fruit, coleslaw, rolls, beverages, and dessert. Lunch is served from 11:30 am – 12:30 pm.

Click image to see larger version.

To make reservations for the picnic, please print and complete the reservation form (click to open PDF form), indicating the names of those attending and include payment for each attendee. Make your check payable to RESDC, enclose it with reservation form and mail to RESDC, 8825 Aero Drive, Suite 205, San Diego, CA 92123. Reservation forms and payment must be received in the RESDC office by Friday, October 21. Badge and opportunity drawing ticket packets should be picked up at the registration table at the picnic. They will not be mailed. Cancellations must be received in the RESDC office by October 21. No refunds can be made after that date.

Directions to Admiral Baker Field for the Health Fair Picnic

If using Route 15:
Turn East onto Friars Road and left on Santo Road, Right on Admiral Baker Road, and turn right at the next stop sign.

If using Route 8:
Take 8 to Route 15 North, turn East onto Friars Road, left on Santo Road, and Right on Admiral Baker Road, turn right at the next stop sign.

Upon entering the park, there will be signs to direct you.

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Welcome New Members

Jill Bolden Miller
Susan Brazeau – Associate
Sherry L. Collins – Sheriff
Vivian H. Espiritu – Probation
Alice Gonzales – Health & Human Services
Gary Hartnett – Air Pollution Control
Richard J. Hobson
Gaby Kuperman – Health & Human Services
Abraham Z. Lugo – Health & Human Services
Cora Marasigan
Rito M. Santos
Ricardo A. San Vicente – Health & Human Services

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In Memoriam

Dorothy Arganda – Planning & Land Use
William Berlin – Auditor & Controller
Flora Cannau – Surviving Spouse
Barbara Collier-Schulz – SDCERA
Kathleen Crooks – Superior Court
Helen Duggan – Health & Human Services
Maria Garland – Auditor & Controller
Michele Ginsberg – Health & Human Services
Mark Goldberg* – Sheriff
Anita Gorospe – Health & Human Services
Walter Hatashita – Sheriff
Tommy Hayes – Superior Court
Teresa Helms* – Health & Human Services
Donald Herrmann – Probation
Carolyn Hickam – Health & Human Services
Russell Holder Sr. – Auditor & Controller
Nancy Kinley – Surviving Spouse
Carol Lewis – Health & Human Services
Geneva McClain – Sheriff
M. Mills – Health & Human Services
Marian Nares – County Clerk
Anita Nuno – Health & Human Services
Paul Pearce – Information Services
Sylvia Peralta – Superior Court
Avis Rana – Health & Human Services
Terrence Robinson – General Services
Mary Roof – District Attorney
Nellie Schlegel – Health & Human Services
Ralph Scholink – Treasurer
William Schultz – Health & Human Services
Carlotta Soucek – Health & Human Services
Miyo Uyeno – Health & Human Services
Sandra Walsh-Wright – Health & Human Services
Marlene Williams – Public Works
Richard Zumwalt – Planning & Land Use

*Active

As long as we think of you,
You’ll always be with us.

The surviving spouse of a member is eligible for RESDC membership. For enrollment assistance, call (619) 688-9229.

Member Privacy
Any retiree or surviving spouse who does not want his/her death notice published in the “In Memoriam” section of this newsletter may notify the RESDC office and your privacy will be maintained.

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