Contra Costa Touts Pension System Safety Net, But Warns Of Cuts
RICHMOND (KCBS) – Contra Costa retirees are being told they have nothing to fear about the pension system going broke, but county officials said there will be cuts in services and in union contracts to meet pension obligations.
Contra Costa Supervisor Board Chair John Gioia said a recent study pointed out that the county has significant pension obligations that are really unsustainable and that by 2025, the retirement investment fund could run dry. However, Gioia said that won’t happen because the county must make up the difference to fund the system.
KCBS’ Dave Padilla Reports:
”We’re going to be making tens of millions of dollars, or more, in cuts to important public safety and support services,” said Gioia. He also said the county will have to renegotiate contracts with major unions like Public Employees Union Local #1 to produce cost savings. Local #1 business representative Rollie Katz expects future talks to center on pension reform.
”The problem with the kind of coverage about this is that it continues to make the focus exclusively on the wages and benefits of public employees,” said Katz.
Like Gioia, Katz believes Contra Costa’s pension system will not go broke, and that economic assumptions used by researchers may be off the mark. County Administrator David Twa estimates that by 2015, the county will need at least $266 million for pensions, alone.
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