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Much has been written about the financial health of public sector pension funds these days. The usual theme is that such funds are grossly underfunded, the sky will fall and we will all face an unbearable amount of potholes in our roads, municipal bankruptcy, or both. Or, worse yet, taxes will go up to pay for it all.
Amidst this atmosphere of financial doom comes some good news from the actuary for the Orange County employees Retirement System (OCERS). This is the retirement system for county employees, as well as employees of the Orange County Fire Authority, Orange County Transportation Authority, the Sanitation District and a few other government employers.
The actuary for OCERS, Segal Consulting, reported to the OCERS Board of Directors on May 19 in a preliminary Actuarial Valuation Report that the unfunded liability of OCERS had fallen as of December 31, 2013. This means that the system that was funded at 62.52% at the end of 2012 was funded at the end of 2013 at 67.65%, an increase of over 5%. This good news is coupled with a policy of the OCERS Board that the retirement plan will be 100% funded in 20 years by contributions from both employers and employees and investment income.
Additional good news is that as of December 31, 2012 the OCERS fund had $ 9.566 billion in assets, and a year later – December 31, 2013 – the fund assets have gone up to $ 10.679 billion. Even better news is that according to the OCERS management the fund assets had surged to $ 11.6 billion by the end of this past April.
So, it seems the OCERS retirement fund is growing and the unfunded liability is shrinking. The system is being well managed and things are under control. Sorry, prophets of doom!