MARIN
CHAPTER
Minutes
MCCGJA Meeting
Board of Supervisors Room Marin Civic Center 11/16/06
The meeting was called to order by President Mattea at 9:35 a.m.
Roll Call and Quorum Identified
Guest Speaker: Marty Miller
Lowell Smith introduced the speaker Marty Miller who is a consulting actuary. He was a member of the 03-04 and 04-05 Marin County Grand Juries. Marty was also the principal author of the 04-05 Grand Jury pension report. He gave those present an overview of retirement programs and spoke about the recent article in the San Francisco Chronicle (4 days ago) on retiree medical obligations.
He defined retirement programs as a set of plans/benefits for retirees, including income and health care. There are a variety of programs. On the income side, there are pensions, personal savings (401(k), 457, 403(b), for example), and Social Security. On the health side, there are Medicare and retiree health plans.
He spoke, at length, about retirement plans. The relative value of the retirement piece might be 15% of compensation. One can pre-fund benefits load on 15% in beginning while person is working (to cover retirement program). Public sector employees belong to either CalPERS or the County retirement fund which pre-funds.
Retiree healthcare, on the other hand, is mostly unfunded. Thus, public sector employers arent aware of the implications of funding because there is a lack of understanding of the obligation.
The County retirement plan has $1.1 billion in obligations with assets of $1 billion; deficit of $0.1million historically understood; substantially funded.
Retiree health $0.2-0.3 billion deficit is $0.2-0.3 million Thus, the smaller obligation (when compared to the retirement plan) is actually a bigger problem for the County. But, the problem has been, over time, largely ignored, and never understood, and never funded. There will be extreme focus in the future on this obligation
The Chronicle states that the mounting benefits tab cannot be ignored. It has been ignored for years. Public sector entities have gone to great extent to ignore obligations. Private sector in early 90s had to be put these obligations on the books. Accounting standards are going to be happening very soon might be July 1 of this year that entities will have to put on books. The newspapers are just getting wind of this.
GJ report revenue pays us for compensation, benefits and services. In good days: the compensation piece stays the same good investment results surplus assets drive down costs and benefit costs go down. Since the costs of services stays the same, the public sector often views the windfall as found money. People like to spend it. Some spend on more benefits, raising benefit levels. If and when bad times recur, these same public sector entities have to make up the shortfall which arises.
What may happen to deal with the retiree health issues (i.e., what happened in the private sector about 15 years ago):
1. Plans cut big time systematic cuts nothing before 65. Nothing for dependents. Steeper service requirements (only 2% instead of 3% of service). Early retirement reductions. Managed care (tighter costs controls).
2. No more plan benefits eliminated
3. Cash equivalents for retiree health we will give you a certain sum per year, and the retiree has to spend the money effectively. The retiree makes up shortfalls
4. Different Medicare coordination to the detriment of the retiree
The County of Marin has to put the (substantial) costs on its books. Might affect bond ratings. The numbers are going to be a lot higher than expected.
The report argues about mix of compensation. Reconfigure so people wake up participate more into how to manage costs.
What private sector did can scale down pension, and retiree health care can be taken away.
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Approval of agenda approved
Report from GJ foreperson Betty reported that Karin said there were 7 approved investigations. Suggestion that surrogate come in forepersons place.
Bettys report: The meeting place is assured for next year BOS chambers and time 9:30-11:30. Lowell will e-mail workplan which we will deal with at the January membership meeting. Look for that in December.
CGJA report: Betty will chair the Nominating Committee. She will serve on the Finance (sub) Committee, serve as secretary to Membership Committee, and vice chair of OLLI (Osher Lifelong Learning Institute). The deadline for The Journal is 2 days after a Board meeting. There are 6 brand new Board members. Special meeting with new president to approve appointments. Six were absent. Timing of agenda and minutes was discussed. Annual conference is in San Francisco next year. $99 a night at hotel. Congratulations to Irwin who was elected to the CGJA Board. Conference in Redding was one day a little rushed. Chris Godley was a speaker at the Conference; he was well-received. In the future, hoping to have a session for aides/assistants to grand juries like Patti. Al: The Conference seemed rushed. Catherine is on Training Committee, and Lowell is on PR Committee. Discussion re. Conference: Owen reports that a committee was established to review internal, state, and IRS documents re. reports/actions to act as a central watchdog.
Lowell re. future speakers: Brad Breithoff, Vernell Crittenden, Dennis Brown/Stu Brown re. Marin Coalition. He will firm up the dates. League of women voters plus one of judges are a possibility.
Gene Dyer report and proposal follow up to BOS responses status of reports. On the County website, all reports plus responses are available. Favorable commendation. The time is right for Board to approach Susan Adams. One missing piece . subsequent action for further study. Discussion emphasize current list. Motion/second approved.
Chapter comments on items not on the agenda reimbursement of $50 for attendance at Conference. Discussion re. timing of speaker.
The meeting adjourned at 11:30.
Respectfully submitted,
Catherine McKown, Secretary