As Orange County officials head into this year’s Super Bowl of labor negotiations with all major union contracts up for renewal, they have made reining in pension costs their primary objective.
For a preview of just how daunting this will be, consider how hard it has been for the five Republican supervisors in this Republican county to find a way to pull back their own pensions.
After a series of false starts spanning a year and a half, Supervisor Shawn Nelson this week finally persuaded his colleagues to approve placing a pension initiative on the June ballot.
While specific language and analysis has yet to be produced, the general idea of the proposal is that supervisors who opt into the pension system would only be allowed to accept a lower-tier benefit plan.
It’s the latest and perhaps the last stop on a winding road that Nelson has traveled on the issue since he took office in late 2010 after a bruising battle with public employee unions.
Nelson ran hard on the pension issue, decrying the county’s unfunded liability, which had crept to more than $3 billion. Orange County unions, in turn, spent more than $1 million in their unsuccessful effort to defeat him.
Yet upon taking office, Nelson immediately signed up for the most lucrative pension available, which deeply angered his conservative base. Some also questioned whether his years on the Fullerton City Council would provide additional benefits.
Nelson reacted by attacking county bureaucrats, saying they never clearly explained that under state law he could opt out of the pension system, as County Supervisor Pat Bates did in her 2006 campaign for office.
He eventually was able to opt out of the system, which calmed his supporters but, he says, will cost him about $38,000 in annual compensation after he leaves office.
County supervisors generally vest — that is, become eligible for pension benefits — after five years, which is the first year of their second term. Their benefits expand based on how many years they remain in the system. Those who leave early basically cash out.
Since Nelson gave up his pension, he’s been trying to get the rest of the Board of Supervisors to join him, without much luck.
“I’m the only one under 65 that doesn’t take a pension,” he said in an interview this week.
Repeatedly, Nelson has put on the board’s agenda replacing supervisors’ pensions with a 401(k) plan, and repeatedly his colleagues have dodged the issue.
“I’ve hit my head against the wall with the most shuck-and-jive conversations,” Nelson said. The message coming through from his colleagues has been straightforward, he said: “You can’t shave down our pensions.”
“It’s all this doublespeak,” Nelson said. “It’s code for, “Yeah, but I plan on coming back here somehow, and I can get my ten years in, so I want my 2.7 at 55 [the highest pension formula possible].”
Even Supervisor John Moorlach, known locally as the prince of pension reform, has publicly resisted altering his own pension, which is based on 2.7 at 55. When Moorlach was re-elected in 2010, he opted back into the pension system.
Moorlach has repeatedly said he supports change but insists that it must be across the board. Other supervisors have consistently poked holes in Nelson’s proposals over the last year.
“Electeds are not going to wean themselves off of it,” Nelson said. “Once you don’t give it to these electeds, they won’t chase these kinds of benefits,” he said.
Nelson said it’s not just elected officials but bureaucrats who love their pensions. Nelson points to a unanimous vote late last year to place his pension idea on the ballot and says staffers sabotaged it.
“Staff wasn’t going to do it,” Nelson said. He had to become involved in the issue to have the ballot initiative placed again on the supervisors’ agenda. “They were just going to let it die. Am I the only guy who is disturbed by that?”
Ironically, if the pension measure slated for the June ballot is passed, the supervisor who stands to benefit most might, in fact, be Nelson. He could go from getting nothing — not even Social Security, because county employees don’t pay into the federal system — to getting a lower-tier pension.
Nelson says he feels he deserves something when it comes to retirement.
“I just want to be like every worker in the U.S.,” he said.