Early retirements and the longer life spans of retirees have beset Ventura County's retirement fund with financial troubles, forcing officials to consider spending $500,000 from the county's General Fund each year to bail out the pension program.
The need for more cash from county coffers comes as officials are pressured to cut staff, slice programs and find other ways to shave millions of dollars from every corner of the budget.
"It wouldn't look so bad except we are already in a hole," said county Treasurer-Tax Collector Hal Pittman, who oversees the retirement system. "How many more (layoffs) does it mean? We don't know."
The county spends about $30 million each year from the General Fund to match employee contributions into the retirement system. In turn, about $32.4 million is paid to retirees annually.
Although the system is also supported by returns on $800 million in investments, without the additional $500,000 annual contribution, the retirement fund could be in danger of eventually running dry, Pittman said.
"We are just trying to watch things and make sure the money is there," he said. "You read about corporations that run into trouble for not doing what they are supposed to do. We want to make sure that doesn't happen."
On Tuesday, Pittman will report the situation to the Board of Supervisors. The news comes on the heels of a county decision to slice $20 million from its General Fund to help offset a $36-million shortfall in state funding.
"This, of course, is more bad news," said county Chief Administrative Officer Richard Wittenberg. "It just seems to get worse."
Pittman said the pension fund troubles appear to be caused by several factors, including retirees' living longer, the so-called golden handshake program and a low turnover rate.
Before the recession of recent years, county employees often moved to other jobs before they were entitled to money from the county retirement system. If employees remain on the job less than five years, their accumulated pension dollars are returned to the county's retirement fund.
Now, more employees are staying long enough to cash in on the system, Pittman said.
According to earlier estimates, Assistant CAO Robert Hirtensteiner said, officials were fearful that the county might have to spend between $8 million and $10 million a year to cover future pensioners.
But county officials have lowered the projected bailout sum, saying the recession has reduced estimated costs.
"It's not as devastating as it could have been," Hirtensteiner said. "It is the best that could have been reached at this point."
Supervisor Maria E. VanderKolk, who serves on the county's retirement board, said she asked Pittman to make Tuesday's presentation to the board.
"It is just a critical situation," VanderKolk said. "I want the Board of Supervisors to have a heads up.
"The retirement system is a major source of financial problems throughout the county. We as a nation are getting older. There are severe problems with the whole system and we need to look at it."
Rick Roeder, a San Diego actuary who analyzed the county's pension plan, said Ventura County is not alone in its plight.
"I don't know of any institutions that are doing well," Roeder said. "Ventura County is not the Lone Ranger. It's a balancing act to preserve the long-term integrity of the plans."