Will Unfunded County Pensions Un-fund Our Future?

Humboldt County has a CalPERS unfunded pension liability of approximately $232 million. If not addressed, continuing pension payments will become an increasingly larger percentage of our budget, and could jeopardize vital programs, even Humboldt County’s solvency.

Through Proposition 162, Humboldt County is responsible for paying its share of any loss of revenue caused by CalPERS investment strategies, resulting in lack of predictability of future program budgets.

Humboldt County has reduced its pension liability requirement by negotiating new retirement plans with its “Miscellaneous” and “Safety” employees which have provided some positive benefits in addressing the unfunded pension liability issue.

Any recession, whether at the County, State or Federal level, will seriously impact Humboldt County’s unfunded pension liability problem.

If Humboldt County’s unfunded pension liability remains unchecked, it will have a devastating effect on our County government, roads, facilities, and infrastructure.

Although Humboldt County’s Board of Supervisors and the County Administrative Office have begun to address the unfunded pension liability issue by creating a Section 115 Trust with Public Agency Retirement Services (PARS), which currently contains $750,000, future impacts cannot yet be determined. The Trust agreement provides that assets are held by the Trust for the exclusive purpose of funding participating employers’ benefit obligations.

The Humboldt County Administrative Office is investigating ways to fund the PARS Trust fund beyond simply depositing General Funds.

The failure of the Department of Health and Human Services to contribute to the PARS Trust fund significantly undermines the County’s efforts to address the unfunded pension liability issue.