BAKERSFIELD, Calif. - The Kern County Pension fund is underfunded by two billion dollars according to a new report by Transparent California. What could that mean for taxpayers down the road?
The significant gap in funding for pensions in Kern County has experts worried about what the future has in store.
Research director of the firm Transparent California, Robert Fellner, became concerned while examining Kern County this year.
"The 2 billion dollars relative to Kern County is extremely worrisome and significantly above average when you factor in the face it's being spread over," noted Fellner in a Skype interview from Las Vegas.
The coffers of Kern County's pension fund are sitting at about 65%, Fellner explains, one of the lowest ratios of California's major pension plans.
Steven Van Metre, a financial planner in Bakersfield, argued that while that doesn't mean tomorrow people will lose their retirement security, volatility could have an impact.
"If there's a major downturn in stocks, which i predict there will be in the near future, pensions are going to have a real problem. they're either going to have to go to the taxpayer and ask for more money, ask for the members of the pension to pay more or they're gonna have to cut benefits, and possibly, all of the above," said Van Metre.
These experts say the county risked and promised too much initially. So how to correct?
"One way is to not offer those same benefits to the younger people coming in," explained Van Metre.
The county scaled back for new hires in 2007.
For example Monday we reported that former Kern County Water Agency General Manager James 'Jim' Beck received the highest pension in the county in 2016, earning roughly 265,000 in retirement.
If he had worked the same 32 years starting in 2007, Fellner argues, under that new rate, beck's pension would have been closer to 110,000 a year.
The Kern County Employees' Retirement Association and the County Administrative Office were unable to speak with us today due to scheduling conflicts.
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