View the NETWORK
as a printable PDF

View Past Newsletters

Are you on social media?
Stay connected with us!

RESDC North County General Membership Meeting

When: Wednesday, February 22, 2017

Time: Beverages and light refreshments will be available at 9:30 a.m.
Speakers will begin at 10:00 a.m.

Place: Joslyn Senior Center
210 E. Park Ave., Escondido, CA 92025

Program:

• AARP Foundation Experience Corps presenters will discuss recruiting volunteers to serve as reading tutors for struggling readers in grades K-3.
• Social Media: What is it? Is it for me? Presenter will give basic introduction to what “social media” is, why people use it, and tips on how to stay safe online.

Directions: from San Diego: I-15 North to SR 78 East. Turn right on North Broadway. Turn left at E. Park Ave. The center is on the left. Parking is available in the parking lot or on the street.

To RSVP, visit https://www.resdc.net/resdc-events/ or call 619-688-9229.

Return to Top

President’s Message

By John J. McTighe

Last month I looked back at what happened at RESDC over the past year. This month, I’m looking forward to what’s in store for 2017. While we can’t be certain about what the future holds, we can look at our Strategic Plan which guides your association over the year. Every year in August, your Board of Directors meets in a retreat where we go over our accomplishments for the past 12 months and formulate and/or revise a Strategic Plan for the next 12 months. At this past Board retreat we affirmed that RESDC will:

• Advocate for the protection of currently held retirement funds at Board of Supervisors/Board of Retirement levels.
• Advocate for the enhancement of benefits.
• Be well informed on legislative proposals/initiatives introduced in both the U.S. Congress and the California Legislature and maintain a strong advocacy on issues that impact our members.
• Communicate with members.
• Monitor SDCERA actions and operations.
• Ensure data displayed on the RESDC website and in the monthly newsletter (and all RESDC communication avenues) are current and accurate.
• Increase membership and encourage participation on RESDC Board committees.
• Review programs and services available in the community.
• Continue to support and award merit scholarships.
• Continue to encourage volunteerism at RESDC and the community.
• Develop, adopt, and implement a RESDC Secure Retirement Advocacy Strategy.

Space limitations do not allow me to go into detail about all these objectives, but I’d like to highlight a few of them. First, you will notice the words “advocate” and “advocacy” appear several times in these objectives. Your Board of Directors takes its role as the advocate for county retirees very seriously. In fact, during our annual member survey, we often hear that being the advocate for retirees is the number one reason many of our members belong to RESDC. We will be taking those efforts further this year by reaching out to our local federal and state legislative representatives to inform them of the important issues and challenges facing county retirees. We want to make sure our legislators have the facts and know they can turn to RESDC to get more information when they vote on issues affecting public pension funds.

Second, several of the objectives involve you, our members, directly. It’s important we maintain a strong membership base to be effective advocates for retirees Our Each One, Reach One membership campaign will continue as a way existing members can bring their former co-workers into membership. We encourage our members to get involved in our committees and activities. If you have an interest in volunteering at RESDC, contact Mark Nanzer at ED@resdc.net or call him at (619) 688-9229. We will also be continuing to find ways our members can volunteer in the community. We will pass along information about worthy organizations and causes that could use some volunteer help.

Finally, I want to extend a warm welcome to the more than 250 new members who joined RESDC over the past few months. Please introduce yourself to me as a new member at any of our events this year so we can get acquainted.

Return to Top

Recent Events

• New Research Brief – State and Local Pension Reform Since the Financial Crisis. This brief, released by the Center for Retirement Research at Boston College, documents and compares the reform patterns for over 200 major state and local plans between 2009 and 2014 and investigates how and why the changes were made.The brief can be accessed by visiting http://crr.bc.edu/category/briefs/
• Welcome County Supervisor Kristin Gaspar. At a ceremony held January 9th, Kristin Gaspar, the newest member of the County Board of Supervisors, was sworn in as the 3rd District County Supervisor.

Return to Top

Valuation Vs. Valuation Vs. Valuation

By Stan Coombs

In December 2015 our Board of Retirement approved the “San Diego County Employees Retirement Association Actuarial Valuation and Review As Of June 30, 2015.” This awkwardly entitled, 83-page annual report, produced by the retirement system’s actuary, Segal Consulting, provided a snapshot of County retirement.

It also set forth funding requirements for the next (2015-16) fiscal year. “Funding requirements” means needed fund earnings, needed county contributions, and needed payroll deductions from active County employees.

Board members questioned some of the complicated assumptions, projections and calculations, and listened while the respected Paul Angelo, of Segal Consulting, explained actuarial nuances. He did well. The Board seemed satisfied.

Advance one year. In December 2016, the Board of Retirement again considered and approved another Valuation, describing the system in June 30, 2016.

It occurs at this point, that a concurrent comparison of this latest 2016 Valuation with the decade-old, 2006 Valuation, and last year’s 2015 Valuation, adds historical perspective, despite the sometimes excruciating detail.

So we proceed. These valuations tell us that in June 2006 there were 34,187 total members in the system, 12,049 of whom were retired or beneficiaries. In June 2015 the numbers rose to 40,116 and 17,186, and in June 2016, to 40,914 and 17,734, increases of 19.7% and 47.2% in the two categories over the decade.

Average ages of active employees were reported as 44.5 years in 2006, 44.7 years in 2015 and 44.6 years in 2016, and for retirees, 68.5 years, 69.1 years and 69.2 years.

Average wages of active county employees were reported as $56,121 in 2006, $65,891 in 2015 and $67,928 in 2016, while average retiree pensions were reported to be $24,876 in 2006, $34,860 in 2015 and $35,556 in 2016. Those 2016 monthly pensions totaled $52,547,445, we’re told, about $630 million annually, and a year-over-2015 increase of 5.3%. A Census Bureau website says 2015 San Diego median household income was $67,320.

Total San Diego County retirement assets were reported to be $7,330,948,000 in June 2006, reflecting a market value return that year, of 14.98%. By 2015 the fund had responded sufficiently from the great recession to total $10,336,900,000, then settled to $10,269,058,000 in 2016, partially due to lower, 2.25% and .48% earnings those two years.

So we found ourselves, in June 2016, at the lowest funded level reported in Valuations over the past decade, 76.9%. However, these are “valuations values” of assets, meaning they’re impacted by an accounting “smoothing mechanism.” The 2006 Valuation had reported an 83.6% funded level, which rose to a 94.4% high in 2008 and has since moved unevenly downward. This calls for a more detailed explanation, since 2008 included the beginnings of the great recession.

This “smoothing mechanism” deliberately delays recognizing the full value of gains and losses each year, instead acknowledging them in equal proportions over five-year periods, smoothing otherwise abrupt changes in annual funding demands on the County and employees.

But total net assets are affected by more than investment performance. Pension payouts and expenses reduce the fund over the course of a year, earnings, and county and employee payroll contributions, add to it. And as indicated, this ten-year period we’re following includes the 2008-09 recession, the most severe economic dislocation since the Great Depression of the 1930s. It heavily impacted earnings.

So lower funded levels result from funding deficits, described in the actuarial language of the Valuation as an Unfunded Actuarial Accrued Liability, or UAAL. We’re told the UAAL increased from $2.54 billion to $3.32 billion in 2016. How did that happen?

The last few pages of the 2016 Valuation tells the story. Deficits usually occur when investment earnings don’t meet expectations, or when the Board of Retirement reduces formal estimates of future earnings (the assumption rate), meaning more funding will be needed from other sources than was previously expected. One or the other has occurred six times in the twelve years since 2004, the Board having reduced the assumption rate five times during that period, from 8.25%, down to 7.50% in 2015-16 and 7.25% in 2016-17. The individual year deficits are paid off over twenty-year periods.

That’s only part of the picture. Earnings exceeded the assumption rate substantially in six of those years, including 14.98% in 2006, 15.12% in 2007, 13.39% in 2010, 20.91% in 2011, and 13.39% in 2014. Most of those excess earnings were used to pay down the deficits.

The 2016 Valuation tells us that funding needed from the County for their share of “normal costs” due the system totaled $186,934,000, and county payments on the total UAAL totaled another $322,386,000. By my count, this totals about 9.4% of the County’s $5.4 billion budget. The 2016 Valuation also says that funding needed from employee contributions totaled $146,875,000, which translates into an average 12.17% deduction from active employee’s paychecks.

The 2015-16 Valuation says fund earnings needed that year totaled $377,344,430, while total net actual returns totaled $240,985,994.

Return to Top

RESDC Evening at the Theatre
On the 20th Century at Cygnet Theatre, March 15

We invite you to join RESDC for an evening of theatre on March 15th! We will be attending the musical On the 20th Century at Cygnet Theatre in Old Town. We have a limited number of tickets available at a group rate!

Founded in 2003, Cygnet Theatre is a leading regional company and one of San Diego’s cultural icons. Each year, Cygnet Theatre creates an eclectic mix of 6 or 7 mainstage productions, from classics to Broadway-style musicals.

On the 20th Century Show Overview: “It’s nonstop laughs aboard the Twentieth Century, a luxury train traveling from Chicago to New York City. Luck, love, and mischief collide when the bankrupt theater producer Oscar Jaffee embarks on a madcap mission to cajole glamorous Hollywood starlet Lily Garland into playing the lead in his new, non-existent epic drama. But is the train ride long enough to reignite the spark between these former lovers, create a play from scratch, and find the money to get it all the way to Broadway?”

When: Wednesday, March 15. Show begins promptly at 7:30pm. We recommend arriving 30-45 minutes early to locate parking and pick up your tickets from the RESDC representative.

Note: This is a Preview Performance. Previews are a set of public performances of a theatrical presentation that precede its official opening. The purpose of previews is to allow the director and crew to identify opportunities for improvement that weren’t found during rehearsals, and to make adjustments before critics are invited to attend.

Where: Cygnet Theatre in Old Town, 4040 Twiggs Street, San Diego, CA 92110

Tickets: A limited quantity of group-rate $30 tickets are available for purchase through RESDC. Please make a check payable to RESDC, enclose with the Reservation Form, and mail to 8825 Aero Dr. Suite 205, San Diego, CA 92123. Please inform us of any special requirements, e.g. wheelchair, difficulty with stairs, etc. Tickets will not be mailed. Tickets will be distributed by a RESDC staff member starting at approximately 7:00pm on the evening of the performance outside the Cygnet Theatre Box Office.

Directions
From I-8: Take I-8 west and exit at Taylor Street. Cross over the freeway and make a right onto Taylor Street. At the third traffic light, make a left onto Juan Street. Make a right at the second stop sign onto Twiggs Street. The theatre is the first building on the right.

From I-5: Take I-5 to the Old Town Avenue Exit. Head east on Old Town Avenue (left from I-5 South, right from I-5 North). Make a left on San Diego Avenue. Follow San Diego Avenue until it ends at Twiggs Street. Make a right. The theatre is the second building on the left.

Parking
There are several free parking lots in Old Town, all within walking distance of the theatre. Street parking is free, but please be aware that there are often time limits, especially along San Diego Avenue.

There is a small free public lot located next to the theatre, however, it fills up fast. A courtesy parking attendant is stationed at this lot beginning two hours prior to the performance. The attendant can assist you with directions to alternative parking options.

For no-hassle parking, we recommend parking in the Caltrans lot just a few blocks away. Located on Taylor Street, at the end of Juan Street, this lot is free weekday evenings after 5pm and all day on weekends.

Return to Top

Save the Date!
Tuesday, March 21
Meet and Greet with RESDC Leadership

RESDC members and any other interested parties are cordially invited to join RESDC President John McTighe and Executive Director Mark Nanzer for an informal gathering.

This is your opportunity to interact with our leadership, learn more about the organization, and to ask any questions you may have. We hope to see you there!

DATE: Tuesday, March 21, 2017
TIME: 10:00 a.m.
LOCATION: RESDC Office
8825 Aero Drive, Suite 200
San Diego, CA 92123

Return to Top

San Diego County Credit Union

In a big bank trap? Eligible SDCCU® cardholders can transfer their high-rate credit cards to a low-rate SDCCU Visa®! Transferring is easier than ever with the new SDCCU Easy Balance Transfer mobile app. Simply take a picture of the credit card payment stub you want to transfer and the app will collect the required information. It’s as easy as Balance. Snap. Transfer.SM The app is available from either iTunes® or Google Play®, search for SDCCU.

Start saving today. You can make your balance transfer request by using the SDCCU Easy Balance Transfer mobile app, calling us at (877) 732-2848 or by visiting one of our more than 30 convenient branch locations.

Return to Top

Pension Facts

Pension “Spiking” and the “California Rule” – Part I

By Chris Heiserman, Director

Great media attention is focusing on two retirement benefit issues for public employees – pension “spiking” and the long-standing legal precedent called the “California Rule.”

• Pension “spiking” is generally regarded as methods of boosting final compensation at the end of a public employee’s career and inflating retirement benefits by adding unused vacation time, sick leave, auto allowances or other types of specialty pay outside of basic salary.
• The “California Rule” holds that public workers obtain a vested contractual right when hired to receive a pension calculated on terms in place the day they started work.

Anti-public pension forces, including many of California’s major metropolitan newspaper editorial boards, would like to erase defined benefit retirement plans for future public workers and force them into 401(k) style savings accounts – the prevalent retirement model in the private sector. With regard to current public employees, they hope to reduce their pension benefits to save future taxpayer dollars. These pension “reformers” believe a state Supreme Court decision expected in the next several months on a case involving benefit “spiking” may pierce the legal armor of the “California Rule” and lead to further erosion of constitutional protection for public employee retirement benefits.

Basically these critics of public pensions want to allow cities, counties, districts, and the state to reduce retirement benefits for active workers to take a bite out of the growing tab to cover future benefits promised retirees. They propose to accomplish this by curtailing pension “spiking” and lowering benefit levels going forward without touching those already earned.

While it seems simple and fair to keep promises made to workers about their retirement benefits, it can get complicated when viewed across the hundreds of state and local agencies establishing the benefits. Agreements are not always documented in writing; some labor groups contend that in negotiations they accepted lower wage increases in exchange for the ability to include vacation or sick leave balances in their pension calculation at retirement.

Interestingly, this type of trade-off at the bargaining table meant the employer saved a great deal of money upfront by not paying higher wages to all workers; and the cost of the add-ons at retirement would be spread out over many years and affect individual employees very differently. Some workers might need to use their sick leave and want to take family vacations; others may work years without using many sick or vacation hours and retire with a lifetime monthly pension larger than their earnings while working full time.
After many years where retiring workers enhance their pensions this way, it becomes viewed as the norm and newly hired employees may assume they can expect similar treatment if they work long enough to vest in the pension plan.

That brings us to the aforementioned Supreme Court case related to pension “spiking.” The original court action involved the Marin County Employees’ Retirement Association (similar to our SDCERA) and arose in the aftermath of 2012 state legislation (California Public Employees’ Pension Reform Act, or PEPRA) which took effect in January, 2013. The law changed retirement calculations for newly hired workers, requiring them to work longer for somewhat reduced benefits at retirement. It also placed a cap on most public pensions, and a companion measure curtailed the practice of “spiking” benefits at retirement.

While the PEPRA changes clearly affected new employees hired since January 2013, the Marin Retirement Association decided to apply the anti-spiking provision to all retirees beginning in 2013. The Association’s move to begin excluding standby pay, callback pay, and other cash payments from pension calculations resulted in legal action by four labor unions.

In August a state Court of Appeal upheld a Marin County lower court ruling that the restrictions could be applied to current workers. The California Supreme Court has agreed to hear the matter on appeal. A second more recent Court of Appeal decision eliminating public employees’ ability to buy extra retirement credits to enhance pensions will likely also be appealed and the Supreme Court is expected to hear both cases.

Potential landmark rulings could result.

In the Marin County case the justices unanimously concluded that public employees had a vested right to a “reasonable” pension, but the benefits are subject to change before they actually retire. The justice that wrote the opinion indicated the elimination of “spiking” in this case would reduce the pension calculations, but the employees would still be able to receive the additional compensation they earned before they retire.

Labor union representatives across the state say the promised pension benefits of hundreds of thousands of current public workers are threatened by this potential weakening of the “California Rule.” Public pension critics, of course, hope it will open the door to more substantial reductions in state and local benefits promised to future retirees.

NEXT MONTH: The “California Rule” and a “Reasonable” Public Retirement

Return to Top

2017 Scholarships

By Carlos Gonzalez, Scholarship Committee Chair

RESDC will again offer five $2,000 scholarships to graduating high school seniors who are immediate family members of a RESDC member. An immediate family member is defined as a child, grandchild, step child, or step grandchild.

Applications are available at our office at 8825 Aero Dr., Suite 205, San Diego, CA 92123 or by calling the office toll free (866) 688-9229. You may use the RESDC e-mail address to request an application: resdc@resdc.net. You can also download the application off the RESDC website at: www.resdc.net/scholarship-program.

The deadline this year is Friday, March 3, 2017. We are unable to accept applications postmarked after that date.

We suggest you start this process early and coordinate your references. In the past, we have had to disqualify applications for lack of references.

As a reminder, the Yakel Scholarship application period closes on February 1, 2017 at 2:00 p.m. For more information about the Yakel Scholarship through the San Diego Foundation’s Common Scholarship Application program, visit www.sdfoundation.org. Applicants will be notified about the Yakel Scholarship by June 1, 2017.

We strongly encourage all those who applied for the Yakel Scholarship to also apply for the RESDC Scholarship.

Return to Top

Bits and Pieces

Frank DuPont celebrated his 80th birthday in January. He worked for Probation and Superior Court before retiring in 1992 as a Juvenile Traffic Hearing Officer. Frank and his wife, Marilyn, also a County retiree, live in Blacksburg, Virginia. He has published a historical novel, The Diviner’s Chronicle, set in Mesopotamia, and is at work on the sequel.

Mareta “Rita” Martin celebrated her 90th birthday in December. Her birthday celebration was in Nevada with her children, grandchildren, and greatgrandchildren. Rita retired from Probation.

Return to Top

See’s Candy Certificates
Increase in Price for 2017

See’s Candy has increased the retail price of their candy commencing January 2017 to $19.90 per pound. Our office will offer See’s Candy Certificates to our members for the price of $16.90 for each one pound gift certificate. This is a $3.00 savings over the retail price.

Please send a check payable to RESDC for the number of certificates you want to purchase with a business-sized (#10) stamped self-addressed envelope to RESDC, 8825 Aero Dr., Suite 205, San Diego, CA 92123. For more than five certificates please affix .68 cents postage on the return envelope.

RESDC members are also entitled to a group discount at the two See’s Discount Stores: 3751 Rosecrans Street, San Diego, 92110; and 1830 Marron Road, Carlsbad, 92008. You must show them your RESDC Membership Card for the discount. The group discount price for a one pound pre-packed box of chocolates is $15.80 if purchased in person at either of these two stores.

Return to Top

Join the RESDC Email List!

We encourage you to join the thousands of other RESDC members who are on our email list. By joining, you’ll receive occasional updates, news, and The NETWORK, all delivered directly to your inbox. Plus, we’ll be launching a new online member self-service area in March, and you’ll need to have an email on file with us in order to participate. More details about this new service will be in the March NETWORK.

To join the email list, send us your full name and email address by contacting us at resdc@resdc.net or by calling 619-688-9229. Please also let us know if you’d like go green by receiving The NETWORK by email only. We’ll continue sending you The NETWORK via postal mail unless you specify otherwise.

Return to Top

Welcome New Members

By Mark Nanzer, Executive Director

On behalf of our Board of Directors, I would like to extend a special welcome to our newest members. As you can see by the list below, our most recent membership recruitment drive was very successful!

In collaboration with SDCERA and Pacific Group Agencies, RESDC mailed out a membership packet with the 2017 Benefits Open Enrollment Kit to over 7,500 non-RESDC member retirees.

I want to extend special thanks to our partners in this effort, SDCERA’s Communications Manager Jerry Fafaul, and Pacific Group Agencies’ Steve Pettee and Greg Margulies.

True to our mission of advocating for retiree interests and providing pertinent information, social opportunities, and service for our members, it is critical that this advocacy demonstrates a strong voice and representation.

We sincerely appreciate your membership and encourage you to visit our website at www.resdc.net, where you will find information on upcoming events, keep up-to-date on what’s happening in the world of public pensions, and learn how to access great RESDC member benefits and community resources.

Thanks so much for your support and I hope to see you at our upcoming events including our February 22nd General Membership Meeting in Escondido and our Meet and Greet on March 21st at the RESDC office.

Return to Top

In Memoriam

Kevin Adams – Public Defender
John Bidwell – Public Works
Antonio Campos – Superior Court
Joelle Carrine – Health & Human Services
Walter Carter – Health & Human Services
Marta Corral* – Health & Human Services
Patricia Davis – Health & Human Services
James Doyle – Health & Human Services
Gloria Frazer – Housing & Community Devel
Yoko Fujita – Health & Human Services
Ronald Gribble – Sheriff
Rodger Griessel – Sheriff
Gerald Hillbrand – Medical Examiner
Gary Hollomon – Probation
Alice Hood – Public Works
Karen Jacobs – Air Pollution Control
David Johns – Environmental Health
Bettylou Johnson – Public Works
Lottie Johnson – Health & Human Services
Patricia Johnston – Sheriff
Laurence King – Sheriff
Richard Kline – Health & Human Services
Beatrice Lewis – Health & Human Services
Augusto Loaiza – Health & Human Services
John Mason* – Public Works
Anne McClelland – Health & Human Services
Gerald McDaniel – Health & Human Services
John Miesner, Jr. – Technology
Wilma Morrell – Public Works
James Mulrean – General Services
Jean Nelson – Assessor/Recorder/Co Clerk
Laura Olsen – Assessor/Recorder/Co Clerk
Brett Rhoades* – District Attorney
Doris Rogers – Superior Court
Ernesto Sasis – Child Support
Mary Tamburello – Medical Examiner
Theodore Vinson – Probation
Robert Wilkie, Jr. – Health & Human Services
Debra Zanders-Willis* – Health & Human Services

*Active

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

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.

Return to Top