In 2009, OCEA took the lead, by negotiating a one-time option for current employees to elect a hybrid retirement benefit consisting of a 1.62 @ 65 defined benefit formula coupled with a modest defined contribution plan. Since then, OCEA and the County of Orange have been working to overcome an IRS taxation barrier to current employees who want to choose the new option.
OCEA’s Berardino wrote in a June editorial in the Orange County Register, “OCEA and the county have done far more far, and done it sooner, to address the sustainability of public employee retirement benefits than… any other public entity and its employees in California. And we did it through a collaborative process at the bargaining table – crafting something everyone could live with and avoiding costly legal challenges. Now, that’s the real model.”
“I feel good about the work we did today. We need to continue to work together and to explore every option on how to move forward,” said Sanchez. “In Orange County, our pension system has become unsustainable. Unless an alternative is adopted soon, the County of Orange will no longer be able to afford the benefits that its employees have rightfully earned. That is a reality that Supervisor Campbell and GM Berardino know too well.
“We must continue to work collectively to ensure that the growing underfunded pension plan situation does not leave our state and local governments overwhelmed with costs and hardworking government employees without a well-deserved retirement plan. The hybrid pension agreement reached by OCEA and Supervisor Campbell is a true common-sense compromise. My bill, HR 2934, would allow this compromise plan to be implemented.
“I have written a letter to the Joint Committee on Taxation asking for a revenue estimate on the legislation in order to push it further in the House. I’ve had positive discussions about the legislation with my colleagues on the Ways and Means Committee, including Ranking Member Sandy Levin and Chairman Dave Camp. I have discussed the issue with my colleagues in the Senate and I have also met with senior officials at the Department of Treasury to discuss our situation. However, there is more to be done and I am committed to work tirelessly on behalf of every hardworking government employee.
“Ultimately, it is most crucial that we build a coalition that will move the Administration and relevant parties to act quickly. I look forward to working with my colleagues here today to ensure Orange County has a solvent and reliable retirement system in place.”