Marin County is leading all agencies in Pension Reform

By Steve Kinsey

Steve identifies his commitment to pension reform and the actions taken to date by the Board of Supervisors that lead all public agencies in Marin.

The Marin County Board of Supervisors has been aware of our pension challenge for some time and has been working directly with our unions and State legislators to make changes to keep our public agencies financially sustainable over time without undermining important public services.

Since 2009, our Board has negotiated changes in our pension program that will save taxpayers hundreds of millions of dollars going forward. We increased the eligible retirement age for non-safety employees to 61-1/4, over 6 years later than any other agency in Marin. We reduced the salary percentage used in our retirement formulas by 20%. We capped annual Cost of Living adjustments at a maximum of 2% annually and changed employee contribution terms to require a 50-50 split of any future enhancements. These changes all benefit the taxpayer, but there is more to do, and under California law, we need legislation to complete our re-structuring.

That's why Marin County has endorsed the Governor's Pension Reform plan, drawing praise from Marin IJ commentator, Dick Spotswood, "Kudos to Marin supervisors for supporting Gov. Jerry Brown's 12-point public employee pension reforms. Unfortunately, Marin is the only one of California's 58 counties to do so. Sonoma and the others need to stop making excuses and join Marin in being part of the solution." Dick Spotswood, Marin IJ May 5, 2012,

The key change we are seeking is legislation allowing Marin County to create what is called a "Hybrid Plan". A Hybrid plan would insure that all workers are guaranteed a minimum pension amount. (Marin's workforce doesn't contribute to or receive Social Security). Higher paid employees would be eligible to receive an annual contribution above the minimum, but it would only if adequate funds were available to pay for it. A cap on total pension would be in place to prevent the substantial amounts that the highest earners receive today.

We are not waiting for the State Legislature to enact the new laws we need to implement a Hybrid program. We have authorized an actuarial study that will inform both workers and management on how to structure fair, affordable pension reform. If the legislature fails to make the changes statewide, Marin will be in a position to immediately seek special legislation that lets us continue to lead the way.

While Marin County's pension problem is real, and future liabilities remain large, the changes we have already made will add up to substantial savings over time.

To illustrate how meaningful Marin's existing changes are, I will provide an example, using two persons starting work today at age 25. One starts work in Corte Madera, under its existing pension program, while the other begins working at the County under its existing program. They both begin their careers at a salary of $80,000. They each receive identical pay increases averaging 2% annually for the next thirty years. Then, at age 55, they each retire. The annual pension for the Corte Madera worker will be $106,551. The annual pension for the County worker will be $62,364.

If they both lived another 25 years, with normal cost of living adjustments, the difference in the required pension payout would be $1.41M.

Not only does this example illustrate the significant savings that Marin County's existing changes will provide taxpayers, it also makes clear that Statewide adoption of pension changes are necessary to prevent agencies that do the right thing from being penalized because the best qualified workers go elsewhere to reap superior post-employment benefits.

I will continue to lead our Board's efforts to finish the job on Pension Reform. I led efforts that resulted in a Labor-Management Council that is bringing all sides to the table on this issue. I supported the Governor's Plan from its introduction and have encouraged our Board to be outspoken with our fellow counties and with state legislators.