Santa Rosa’s pension costs are continuing to climb and probably will for several years despite state and local reform efforts, but officials say healthy investment returns and lower benefits for new workers may eventually help rein in costs.
The city recently learned that its largest annual retirement cost, its payment to the California Public Employees Retirement System, is set to increase by about $1 million next year, to $20.4 million.
A sharply divided Santa Rosa City Council approved a new two-year police union contract characterized by some as an important step toward pension overhaul and by others as far from the restructuring needed to save the city from financial peril.
The full CalPERS board voted this morning to lower its forecast from 7.75 percent to 7.5 percent. The change is expected to cost the state an additional $167 million a year out of the general fund. CalPERS’ chief actuary had recommended a reduction to 7.25 percent.
The number is misleading because the support for reform is much stronger than that. The poll shows fewer than one in four Californians contend the governor’s plan goes too far. Fourteen percent oppose the governor’s plan because they believe it doesn’t go far enough.
The $250 million hole Sonoma County is in for unfunded retirement benefits could get deeper following a state Supreme Court decision that severely limits the ability of counties to cut health care benefits for retirees.