GRAND JURY SOUNDING WARNING ON RETIREE FUND.

Byline: ERIC LEACH

Staff Writer

The Ventura County Grand Jury is urging government officials to make changes in the management of their retirement system, saying the county plan has gone from a $368 million surplus to a $482 million deficit over the past six years.

The grand jury attributed the deficit to employee compensation increasing more than projected, employees retiring younger and living longer and the retirement plan's investment portfolio performing worse than expected.

Among the recommendations from the grand jury are annual reports on the plan to the county Board of Supervisors and increased emphasis on a defined contribution 401(k) plan.

The grand jury also recommended that Ventura County contribute to a reserve account at times when employer pension contributions are not required so the reserve funds can be used to cover deficits if they occur later.

The number of employees contributing to the plan has been constant, while the number of retirees increases, the grand jury found. For the six years ending June 30, the number of retired members collecting benefits increased from 3,520 to 4,570, while the number of active members in the plan remained constant at 7,403.

Members of the Board of Supervisors said although the grand jury report is helpful, there is no cause for alarm.

"Our (retirement) fund is in good health," Supervisor John Flynn said, who was on the Ventura County Employee Retirement Association board for 20 years. "We have one of the best retirement systems in California. We always have to be cautious, but it is nothing alarming."

Johnny Johnston, the county's chief executive officer, also said the county's pension fund is healthy because the Board of Supervisors has followed conservative policies for years to avoid trouble.

He said the county's pension plan is about 83 to 85 percent funded, and in a few years it could be 90 percent funded.

"We welcome the grand jury's interest in the subject," Johnston said. "There are some good thoughts in the report."

But he said it also reaches some incorrect conclusions.

"The grand jury took a snapshot in time which did not represent the overall performance of the portfolio," he said. "We will substantially exceeded the pension plan's earnings expectations this year."

He said supervisors already receive annual reports on the pension plan and monthly updates, and for years they have been addressing issues raised by the grand jury.

"The county supervisors have resisted pressure from the county's labor unions over this very issue," Johnston said. "We are already doing almost everything (the grand jury) said. I bet the Ventura County Board of Supervisors is the best informed board in the state when it comes to pension benefits."

County officials are already considering a reserve fund as recommended by the jury, he said.

Johnston said because of the Board of Supervisors' conservative approach, the county's pension benefits are at around the same level as when he became CEO in 2001.

[e-mail]

[phone]