(May 10) The county’s taxpayers will shell out $172,478,057  prior to August 1 to cover the cost of pensions for retired county employees in the upcoming fiscal year.
This week the board of supervisors authorized auditor-controller/treasurer/tax collector Larry Walker to make an advance payment of the county’s estimated fiscal year 2013-14 annual contribution to the board of retirement within 30 days after the commencement of the county’s fiscal year July 1.
According to Walker, “For fiscal year 2013-14, the total county general fund retirement contribution is estimated to be $179,068,000, discounted by $6,589,943, at a simple interest rate of 3.68% for a prepayment amount of $172,478,057.”
Walker said “Government Code 31582 allows the county to advance pay part or all of the county’s estimated annual retirement contribution, if paid within 30 days after the commencement of the county’s fiscal year. The county has taken advantage of this alternative in the past, prepaying the general fund contribution to the board of retirement for the entire fiscal year. The prepaid amount is discounted by the board of retirement, resulting in savings for the general fund. For fiscal year 2013-14, the county has calculated a 3.68% simple interest discount rate, which results in a discount of $6,589,943 to the general fund.”
Walker said he and the office of county CEO Greg Devereaux had analyzed the financial impact of prepaying the retirement contribution, and “determined that the county will benefit from the transaction. The estimated retirement contribution of $179,068,000 and the related discount amount of $6,589,943 are estimated and may change. Any benefit or loss realized by the board of retirement as a result of the retirement pre-payment will be incorporated into San Bernardino County’s employer’s contribution rates, thus ultimately accruing to the county.”
The county’s retirement costs have been escalating.  In 2011, the county made a $132,263,097 prepayment to the board of retirement to cover the cost of pensions for retired employees during the 2011-12 fiscal year, reflecting a prepayment discount of $5,299,603 from the $137,562,700 owed by the county as its annual contribution to the retirement fund that year. Last year, the county made a $154,626,037 prepayment to the board of retirement to cover the cost of pensions for retired employees during the 2012-13 fiscal year, reflecting a prepayment discount of $5,907,863 from the $160,533,900 owed by the county as its annual contribution to the retirement fund through June 30 of this year.
In this way, county taxpayers have seen an average $20,107,480 per year increase in the cost of paying for pensions over the last two years.