According to a new document from the County, Contra Costa is now at a tipping point as it faces unsustainable pension costs. Between 2007 and the end of 2012, Contra Costa County portion of unfunded pension liability rose from $0.47B to $1.89B. Overall, the unfunded actuarial accrued liability (UAAL) of the County, as a percentage of covered payroll has grown from $84.11% in calendar year 2007 to 349.38% at the end of calendar year 2012.
The unsustainable pension costs just keep climbing with new union contracts. Meanwhile, the projected rate of growth of the County employer rate will increase an average (across classifications) 33% in 2014-15 over 2013-14. At the same time the rise in County employer cost for employee pensions in 2014-15 originally estimated at $22M, will jump to $56M, from $173M to $229M.
County unsustainable pension costs just keep rising
The increase likely means not filling vacant positions and other reductions in services. Depletion of Contra Costa Fire’s reserves, Obamacare costs, new union negotiations, and continued sequestration will compound budget issues even further. Unsustainable pension costs are ruinous to County services and those most in need of County services. The County employee unions have lost any right to calling themselves “progressive,” or to representing “working families”.
County Supervisors must stem the tide of unsustainable pension costs. They must make a stand to pass legislation to phase out Defined Contribution Pensions completely by 2018-19.