Santa Clara County Grand Jury
• 2011-2012
• Agency Response
Response to:
City of Santa Clara
Grand Jury Report: An Analysis of Pension and Other Post Employment Benefits*
⚠️ Translation Notice: This content has been automatically translated. The original English text is the official version. Translation may contain errors.
⚠️ Este contenido ha sido traducido automáticamente. El texto original en inglés es la versión oficial. La traducción puede contener errores.
Findings and Recommendations 7 findings
F1
Public sector employees are eligible for retirement at least 10 years earlier than is common for private sector employees.
Related Recommendations (1)
R1
The Cities should adopt pension plans to extend the retirement age beyond current retirement plan ages.
F2
Campbell, Gilroy, Los Altos Hills, Los Gatos, Milpitas and Palo Alto have adopted second tier plans that offer reduced Benefits, which help reduce future costs, but further changes are needed to address today's unfunded liability. Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale have not adopted second tier plans.
Related Recommendations (3)
R2A
Page 3
Santa Clara County and the cities of Cupertino, Los Altos, Monte Sereno, Morgan Hill, Mountain View, San Jose, Santa Clara, Saratoga and Sunnyvale should work to implement second tier plans.
R2B
Page 4
For Gilroy, Los Gatos, Milpitas and Palo Alto, which have not implemented second tier plans for Misc and Public Safety second tier plans should be implemented for both plans.
R2C
Page 4
All Cities' new tier of plans should close the unfunded liability burden they have pushed to future generations. The new tier should include raising the retirement age, increasing employee contributions, and adopting pension plan caps that ensure pensions do not exceed salary at retirement.
F3
Retroactive Benefit enhancements were enacted by Cities using overly optimistic ROI and actuarial assumptions without adequate funding in place to pay for them.
Related Recommendations (1)
R3
The Cities should adopt policies that do not permit Benefit enhancements unless sufficient monies are deposited, such as in an irrevocable trust concurrent with enacting the enhancement, to prevent an increase in unfunded liability.
F4
The Cities are making an overly generous contribution toward the cost of providing Benefits.
Related Recommendations (2)
R4A
Page 5
The Cities should require all employees to pay the maximum employee contribution rate of a given plan.
R4B
Page 6
The Cities should require employees to pay some portion of the Past Service Cost associated with the unfunded liability, in proportion to the Benefits being offered.
F5
The Cities are not fully funding OPEB benefits as evidenced by large unfunded liabilities and small funded ratios.
Related Recommendations (1)
R5
The Cities should immediately work toward implementing policy changes and adopting measures at making full OPEB ARC payments as soon as possible.
F6
The City of San Jose permits the transfer of pension trust fund money, when ROI exceeds expectations, to the SRBR, despite the fact that the pension trust funds are underfunded.
Related Recommendations (1)
R6
The City of San Jose should eliminate the SRBR program or amend the SRBR program to prevent withdrawal of pension trust money whenever the pension-funded ratio is less than 100%.
F7
The Cities defined benefit pension plan costs are volatile. Defined contribution plan costs are predictable and therefore more manageable by the Cities.
Related Recommendations (1)
R7
The Cities should transition from defined benefit plans to defined contribution plans as the tier plans are implemented.
No Responses Found 2
Government entities assigned to respond to this report. No response documents have been linked in our database.
Santa Clara County
County
Santa Clara County Board of Supervisors
Elected County Office
* This report's PDF did not contain easily extractable text and required Optical Character Recognition (OCR) for analysis. There may be minor errors in the extracted findings and recommendations due to OCR limitations with scanned documents.