It’s no secret that I really do not care much for OC Board of Supervisor’s Chair John Moorlach.Â I even have a special name for him, Emperor Chicken Little. But this guy is just starting to piss me off. If you are not one of the approximately 27,299 active and deferred members or 10,122 retired members of the Orange County Employees Retirement System (OCERS) you probably do not care much, or know much, about the games being played with the retirement board by Supervisor Moorlach.
For county workers, OCERS pension system is our Social Security plan. We do not pay into Social Security, and most of us won’t be able to get any money from Social Security when we retire, even if we paid into it. OCERS is all we’ve got, and like Social Security we get a defined benefit when we retire.Â On average, our pension benefits are more than what we would get from Social Security. That is because we pay more into it than we would into Social Security. In my case, I am paying 14.18% of my paycheck for my pension, the Social Security tax is 6.2%. Some county workers pay a lot more than I do.
Supervisor Moorlach has decided to engage in a crusade to bankrupt the OCERS. He is doing this so that he can say “I told you so.” That’s right; he’s playing a childish game with your tax money, and with mine. The taxpayer money is the amount of money that the County must contribute for each worker towards their pension. If he can jack up the amount of money that must be contributed, he can climb aboard his soapbox and say, “That’s too expensive.” On the county worker side, he does the same so that the workers will say, “That’s too expensive.”
The game he’s playing is real simple. All he has to do is get the OCERS board to lower their projections of investment performance and change the assumptions about when people will retire and how long they will live. Based upon those manipulated calculations, the amount that the county and workers need to contribute to meet projected costs goes up dramatically. This process also inflates what is called “unfunded projected liability” of the plan. A small 0.25% change is performance assumptions can dramatically affect the projections of such liabilities over 30 years. The problem with “unfunded projected liability” is that the so called short fall would only happen if everyone benefits, projected into the future were paid out all at once. Simply put, that will never happen.
The OCERS board controls who is hired to calculate all those assumptions and determines how they are based. Moorlach, with the consent of the Board of Supervisors appoints 4 out of the 5 votes needed to get his way. The 5th vote for Moorlach’s plan comes from the County Treasurer, who also sits on the OCERS board.
Earlier in the year when the OCERS board voted to vigorously defend its member’s funds against a frivolous lawsuit that Moorlach and his Chief of Staff Mario Mainero dreamed up, Moorlach vowed to get rid of those appointed members who went against his plan. The first target was replaced a few months ago; the second is being recommended for appointment this coming Tuesday. His name is Tom Flanigan. He is a fired former Chief Investment Officer for OCERS, who has a direct relationship with a company, Ryan Labs, which has been pitching business to OCERS. Flanigan was forced out of OCERS because he shares the same radical views of Moorlach. I find it curious, if not highly unethical, for Moorlach to hold a meeting in his office with OCERS staff, the CEO of Ryan Labs and Flanigan to discuss OCERS investment policies, and then move to appoint one of the participants to the OCERS board.
Moorlach and Mainero claimed initially that Flanigan had no involvement with Ryan Labs. When their fraudulent claim was debunked by an OCRegister investigation, they claimed that Flanigan was volunteering at Ryan Labs and has no financial relationship with the company. In addition to it being unethical and possibly illegal for a member of the OCERS board to have a relationship with a company doing business with OCERS, the fact that Moorlach and Mainero are trying to pull a fast one raises even more suspicion.
People like Moorlach have bankrupted the social security system and they want to do the same thing to pension plans. This is my future retirement fund he’s playing with. He has talked about changing the plan so that new employees would pay into a 401k system instead of a pension. One problem with that Moorlach, while many 401k pension plans have lost as much as 40% of their value this year due to the crash of the markets, pension plans like OCERS are far more stable, having lost approximately half of that amount.
But the bottom line is this; Moorlach claims to be on the side of taxpayers, to be fighting for reform. The reality is far more sadistic. He is intent on breaking everything about government so that he can “prove” that government is broken. Moorlach’s selection of Flanigan is one of his more transparent moves towards the implementation of his self fulfilling prophecy.
Moorlach needs to stop screwing around and playing politics with my pension fund. It belongs to me and the other 37,000 members who have paid into the system. It is not his personal toy to play with and break.
I urge the Board of Supervisors to reject the appointment of Tom Flanigan to the OCERS Board on Tuesday.