During this year’s rough-and-tumble primary campaign for the vacant seat on the Orange County Board of Supervisors, virtually every candidate talked about the challenge of managing public sector pensions and their costs.
None was as vocal as Fullerton City Councilman Shawn Nelson, who won in the primary and will be sworn in Tuesday morning. Nelson will finish the term of Chris Norby, who in January won a special election to the state Assembly. He will have to stand for election again in November for a full term of his own.
Nelson talked passionately about bringing down the unfunded pension liability facing the county, now estimated at more than $3.3 billion.
In reality, there is not much that a supervisor can do to shrink the unfunded liability, especially in the short term. But there is one thing Nelson can do: He can decline a pension for himself.
Under a little-known — and not publicized — state law, each county supervisor has to actually decide to opt into the county’s pension system to get the same benefit most employees do.
I tried to find out Nelson’s pension plans on Monday, but he didn’t return several of my phone calls.
If Nelson does decline a pension, he won’t be the first to do so. Pat Bates — who also faced a ton of questions about pensions in 2006 when she ran for her first term — kept her pledge to not contribute to the expansion of the county’s unfunded liability.
None of the other current supervisors have opted out, most notably John Moorlach who has made battling pensions a hallmark of his elective career.
Bates has rarely mentioned her policy in public, but she doesn’t avoid questions about her decision.
“That was my campaign pledge,” Bates told me. “It was a big issue when I was running for election, and I made a pledge that I would do nothing to add to the unfunded. And putting myself in the pension, I would be one of those future funding responsibilities.”
County budget staffers were not able to provide a cost breakdown for supervisors and their pensions on Monday. But a ballpark estimate — based on an average supervisor’s office payroll of about $1 million and pension payments costing about 21 percent of payroll — is that each supervisor office costs taxpayers about $200,000 in pension payments.
Bates said that she could see an argument for a supervisor getting a pension before term limits. But now that voters have limited a supervisor’s career to two terms, she said it can’t be justified.
“Prior to terms limits, when it became your primary profession, I didn’t have a problem because Social Security wasn’t provided,” Bates said. “With term limits, it doesn’t seem to be an appropriate compensation.”
However, other sitting county supervisors don’t see it that way.
“I have no problem that I’m going to earn a pension,” said Supervisor Bill Campbell.
If you’re going to get good, qualified people to run for public office, they can’t be expected to take a cut in pay and retirement benefits, argue both Campbell and Moorlach.
“People are giving up an opportunity, so I think the compensation should be covered,” Campbell said.
Currently, a county supervisor’s compensation package — not including pension benefits — is a salary of more than $150,000 annually, a defined contribution retirement account (referred to a 401(k) in the private sector), and a car allowance.
However, if Campbell, Moorlach and the other pension takers have a change of heart, they will have one last chance to save the taxpayers money.
Another not publicized option available to county supervisors allows them, within 60 days of leaving office, to simply get the money they paid into the system back and forgo a pension.
— NORBERTO SANTANA, JR.
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