The new OCMA Employee Retirement Rate Calculator has now been released by the County Budget Office. Contribution rate changes, either up or down, are normal for retirement systems that pre-fund retirement benefits. These new rates will be effective Pay Period #15.
This adjustment occurs every year, but in the past the increase was relatively small (usually less than 1%) compared to this year’s increase. This year, the increase in the rates is significantly higher, likely due to two recent actions taken by OCERS. One was the reduction of the assumed rate of return (of the entire OCERS fund) from 7.75% annually to 7.25%. The other is the amortization of the Unfunded Actuarial Accrued Liability (UAAL) from 30 years to 15 years. Combined, these two actions have caused, among other things, the reverse pick-up to increase significantly (from 2.152% to 2.652%, depending on one’s age of entry into the system).
As it currently stands, OCMA and most other County of Orange labor units are bearing the full burden of paying for the enhanced 2.7% @ 55 retirement formula. The County is paying none of it. In addition, we are aware of the ever-increasing burden this is placing on the Managers and take this issue very seriously as we move forward in reaching agreement at the bargaining table.
It is also noteworthy that a significant increase in the OCER’s fund value has occurred over the past couple of years. Since January 2012, the fund’s value has increased over 2 billion (yes, billion) dollars for a total fund value of over $11.6 billion.