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Strapped O.C. Seeks Cut in Pension Contribution

Finance: County says the reduced amount would reflect the smaller raises workers are receiving.

April 09, 1996|SHELBY GRAD | SPECIAL TO THE TIMES

In a bid to boost bankruptcy recovery efforts, the county is expected within the next month to seek a reduction in the amount of money it contributes to the employee retirement system.

The issue was discussed Monday by the Orange County Retirement Board, which received a report by an actuarial consultant who analyzed how a reduced contribution from the county would affect the $2.9-billion retirement fund.

Over the last few months, some retirement board members have accused the county of trying to "raid" the independently run system, which handles pensions for more than 20,000 current and retired government workers.

But Monday, officials were more circumspect as the actuarial consultant and county officials outlined the issue.

The county contributes about $59 million a year to the retirement system. In determining how much money to set aside for worker benefits, the system assumes that county workers will receive an average pay increase of 6% per year.

The county has suggested that its contributions be recalculated on the assumption that pay raises over the next five years would likely be in the range of 3.5% and at 5.5% for the following five years. Such changes would lead to lower county contributions, but officials said they were not sure by exactly how much.

Both retirement board officials and Robert A. Griffith, director of county's General Services Agency, said any contribution cut would not affect the financial stability of the system, nor result in reduced benefits for workers.

"What we are talking about is not changing the benefits employees receive," Griffith said. "It's about changing the assumptions of how much money has to be in the system to pay the benefits."

Both Griffith and the consultant's report noted that the lowered pay increase assumption would be more in line with trends nationwide.

Retirement board member Bruce A. Moore said he would reserve final judgment until a detailed county plan has been submitted. "I'm not necessarily opposed as long as it doesn't effect the integrity of the system," Moore said. "I want to see the hard numbers."

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