Twenty year payment plan selected to pay off massive debt
Posted by Seth Conners
According to a press release from the county, The Inyo County Board of Supervisors took proactive steps at a board meeting on Tuesday March 28th to address major, unavoidable employee cost increases that will confront the County in coming years.
The Board voted to select a 20-year amortization plan offered by CalPERS, the State of California’s manager of its employee pension and health benefits, in order to pay down $59 million in unfunded accrued liability for both miscellaneous and safety employees’ retirement plans. The Board also decided to make a lump-sum payment of nearly 4.5 million dollars on what is owed next Fiscal Year, rather than make monthly payments over the course of 12 months.
The decision to select the 20-year payment plan instead of the minimally required 30-year plan will save Inyo County taxpayers an estimated 14.5 million dollars in interest costs. The decision to make a lump sum payment instead of monthly payments will save the County $118,594 in next year’s budget.
Because of the way in which CalPERS structured the County’s payment options, the annual cost of the 20-year plan is only higher than the 30-year plan for the first five years; after five years, the 30-year plan would actually cost the County more each year.
Inyo County is one of hundreds of counties and cities throughout California that CalPERS will be billing for their estimated share of growing pension debt resulting from investment earnings falling short of forecasts. Estimates from January placed the unfunded liability at 139 billion dollars.