Saying they must rescue the retirement system, Stanislaus County Employees' Retirement Association board members voted 7-3 on Wednesday to replenish some reserves wiped out in 2008 and 2009 investment losses.
Retirees aren't happy because the fund doing the replenishing has ceased paying them some benefits.
But employers — Stanislaus County, Ceres, the Superior Court and five special districts — also are irked because board members decided against shifting $12.6 million to a pot specifically protecting those agencies.
At issue is StanCERA's benefits reserve fund, which used to pay retirees up to $370-a-month health care stipends and supplemental cost-of-living increases. The money was collected when investments performed well in years past.
But those benefits never were guaranteed in labor contracts. So board members have shifted away $81.5 million in recent months, mainly to blunt pension obligations of agencies struggling to bridge multimillion-dollar budget gaps.
Retired Employees of Stanislaus County says the shifts to the main pension fund are unfair and sued StanCERA in an attempt to block the transfers. The group's lawsuit accuses the board of manipulating funds "by the artifice of various actuarial schemes."
On the table Wednesday were several transfer recommendations with a combined value of $69.4 million, mainly to replenish reserves, augment a burial payout fund and partly shield employers from future increases in pension obligations. The latter would have received $12.6 million.
But the board majority apparently is tired of bailing out the agencies.
"We have to make the system whole," said board member Darin Gharat, after making a motion to approve all transfers except the $12.6 million.
Board member Lyn Bettencourt urged the board to wait for an in-depth report expected in about a month that could "impact this dramatically." He and board members Jim DeMartini, a county supervisor, and Gordon Ford, the county's treasurer-tax collector, were outvoted by Gharat, Mike Fisher, Linda Stotts-Burnett, Clarence Willmon, Mike Lynch, Ron Martin and Maria De Anda.
After the vote, Monica Nino, county assistant executive officer, said the county would have preferred no vote on any of the recommendations, or tabling the matter until more information is gathered, rather than lose the piece most valuable to employers.
StanCERA investments lost more than $400 million in 2008 and 2009, sharply driving up employers' required contributions. Nino said the county's $44 million obligation could swell an extra $15 million to $20 million next year.
Bee staff writer Garth Stapley can be reached at firstname.lastname@example.org or 578-2390.