Unfunded pension liability soars

Advisory panel estimates gap to be $3.66B and below 80% `sound' metric

Riverside County supervisors have signed off on a report showing county government’s unfunded pension liabilities have spiked, largely due to poor investment returns at the state level, and it means higher near-term costs to the county today.

The 2024 Pension Advisory Review Committee report said the county’s retirement apparatus is now 75.3% funded, compared with 86.6% previously. The key metric reflective of a sound pension system is considered 80% funded status.

The county’s total unfunded pension gap is $3.66 billion, compared to $1.88 billion estimated in the 2023 report, according to the committee. The figures are based on calculations that end in fiscal year 2021-22 — the most recent period for which confirmed data is available from the California Public Employees’ Retirement System.

The committee estimated liabilities will decline going forward, with the funded status gradually returning to 80% over the next eight years.

The county’s current asset base supporting the pension system is $11.2 billion.

There are two main categories in the local pension system — safety and miscellaneous. The safety category covers sheriff’s deputies, District Attorney’s Office investigators, probation agents and others, while the miscellaneous rolls cover clerks, custodians, nurses, social workers, technicians and remaining employees not involved in law enforcement.

The amounts required to fund workers’ nest eggs in CALPERS will steadily rise over the next five years, according to the committee.