Supervisor Moorlach’s response to today’s Register criticism of BOS Pensions

The major Local Section story in today’s Register is entitled ‘Height of hypocrisy.’ Reporter Peggy Lowe takes the Supervisors to the woodshed with a sub heading which reads “Supervisors criticized for souping up their own pensions while moving to restructure those of sheriff’s deputies.”
In her report she says that “the five supervisors upped the biweekly contribution to their 401 (k) accounts … to 8 percent from 6 percent.”

Late this morning I received an email from Supervisor Moorlach responding to the story. Over the lunch hour we spoke about the story where he felt that he was not given an opportunity to respond. John said he would welcome an opportunity to discuss Defined Contribution plans with the county union. He also said it was OK for me to blog his response which follows:

John Moorlach’s rebuttal:

“The topic of pensions and pension reform continues to get press attention.

Today’s OC Register has an article on a recent pension increase for electeds and an editorial submission on one pension reform remedy that I have advocated for quite some time.

The headline for the article begs for a response, as the article does not provide the full story.

Transportation costs have increased. Oil is trading today at $82 a barrel.

Let me share what elected Supervisors and department heads in Orange County do not get.

They do not get paid sick time off. They do not get paid vacation time. They do not get annual leave. There is nothing to accrue. Accordingly, the annual payoff from 90 hours to 170 hours does not apply to me.

Appointed department heads (Executive Management) do receive sick and vacation time, now known as annual leave, putting elected department heads at a financial disadvantage. Consequently, a 401(a) defined contribution program was established many years ago to provide some sense of parity between appointeds and electeds with an opportunity for electeds to accrue a similar benefit. This has been at 6 percent for some time. An increase to 8 percent was a reasonable adjustment to keep up with inflation. But it doesn’t provide a sufficient remedy to resolve the different compensation packages, as Executive Management also received a 401(a) contribution of 3 percent. This has gone up to 5 percent for department heads and 4 percent for senior management. On a personal level this translates into an annual additional contribution for me of $2,746.43. For contrast, an additional 80 hours of annual payoff would amount to more than twice this amount. This was approved when we voted on the Orange County Employees Association bargaining unit agreement.

Every bargaining unit is attempting to obtain increases in salaries and benefits. I find it amusing that the president of the Orange County Attorneys Association would begrudge such a small one for the Supervisors. “Hypocrisy?” I don’t think so. Hypocrisy would have been making the increase retroactive to the date of my hire more than 12 years ago. But, oops, how would one do that with a defined contribution plan?

But, let’s discuss a few other interesting observations. We’re giving an increase to a defined contribution plan, not a defined benefit plan. If the good employee union president would like to discuss defined contribution plans, then I’m up for that discussion.

Maybe we should also discuss defined benefit plans here at the County, considering the dialog that was provided at yesterday’s Board of Supervisors meeting. The County’s contribution to the defined benefit plan for members of the Association of Orange County Deputy Sheriffs (AOCDS) is approximately half of their salary. And the County pays all of it; their members do not contribute one dime. However, the members of other County employee unions pay an employee contribution and, for those that recently adopted the 2.7 percent at 55 formula, are also paying in for the increased cost of the benefit. But, don’t get me started on defined benefit pension plans…”

What are your thougths on this latest pension action and Supervisor Moorlach’s reply?

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