Grand jury slams county on pension fund management | April 24, 2013 | Almanac | Almanac Online |


News - April 24, 2013

Grand jury slams county on pension fund management

by Dave Boyce

In its second report in two years on this topic, the San Mateo County civil grand jury lambastes county officials over a pension plan for county employees that it says is underfunded by at least $1 billion and likely $2 billion.

The county will pay $92.5 million of its $1.9 billion budget toward that liability for the current fiscal year, according to the April 10 report. To put that number in perspective, over that same period, the county is paying $89.7 million for Sheriff's Office services, $83 million for capital projects, and $56.6 million for road construction and operation, the report says.

Over the past four years, annual payments to pensioners from the pension fund, known as SamCERA, have risen 34 percent to $139.2 million. The median annual benefit per retired employee is $23,981, the report says. Twenty-four of those retirees receive $150,000 to $199,000 and five receive over $200,000.

The grand jury accuses the county of consistently overestimating the annual return on its independently managed $2.3 billion investment portfolio. The most recent projection is an annual return of 7.5 percent, but over 10 years, the rate has been 5.54 percent a year, the report says.

That return compares poorly to the 7.6 percent annual return for 69 of the largest college endowment funds over 10 years, the report says.

Got to to read the grand jury's report.