Santa Clara County Grand Jury
• 2017-2018
• Agency Response
Response to:
2017 Update from the City of Santa Clara
custody or rehabilitation on the county's approach to
⚠️ 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 IO 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.
No recommendations for this finding
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.
No recommendations for this finding
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 trnst 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 trnst money whenever the pension-funded ratio is less than I 00%.
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.