O.C. IN BANKRUPTCY : Some County Employees Fear Savings May Be in Danger

More than 100 county employees, worried that Orange County’s financial fiasco could soon become their own, have halted payments to the county’s retirement savings program in the days since the bankruptcy filing, officials said Monday.

“This is my children’s whole future, and I don’t know if they’re ever going to see it,” said Municipal Judge Margaret R. Anderson, who said she has switched her future payments to another savings plan outside the county and is trying to get whatever she can out of the county fund.

“I have no idea what’s going to happen,” said Anderson, a county employee for nearly two decades who has always put the maximum allowed into the retirement savings fund, which is similar to a 401k plan. “It now looks like I could have just taken that money to Vegas--that’s what the Board of Supervisors and (resigned Treasurer-Tax Collector Robert L.) Citron did.”

About 2,000 people participate in the county-run savings plan, in which employees can place up to $7,500 a year tax-free, and double that amount for the three years immediately preceding their retirements.

Employees can retrieve money they have had automatically taken from their paychecks and put into the account only when they retire or move to another job.

The fund contains $80 million, according to senior accountant Suzanne Luster. Although only $3 million of that money was directly invested in the county’s failed pool, many employees worry that all of it will be considered “county assets” available to creditors because of last week’s bankruptcy filing.

“It’s not a huge percentage of people, but it’s much more than we normally have,” Luster said of the 100 employees who have called her office during the past week to stop their automatic payments into the retirement fund. “A lot of them are saying, ‘I think I’m going to stop it for now, I can always start up again, can’t I?’ I think they’re taking a wait-and-see attitude.”

County officials said Monday that they are unsure how the bankruptcy will affect the plan.

Ironically, two of the county’s five supervisors are among those poised to be most immediately affected by what happens to the fund, as they are due to retire in January. Thomas F. Riley, the board’s chairman, has $100,000 tied up in the fund; Harriett M. Wieder has an undisclosed sum invested.

“I’m concerned, of course, but there isn’t a great deal I can do about it until I know something. I can’t go off half-cocked,” Riley’s wife, Emma Jane, said Monday. “I get very annoyed with everybody trying to groan, moan and figure out what’s going to happen without even thinking about it.”

According to last year’s annual report from the deferred compensation plan, the $80 million was invested in a variety of short, medium and long-term notes.

The county offers a second place to put retirement funds, and many employees, including Anderson, are now considering switching their savings to the Columbus, Ohio-based Public Employees Benefits Services Corp., hoping that because it is run outside the county it will not be affected by the bankruptcy.

“Even though they’re telling us it’s safe, we know from reading the contract that the creditors can attach it in dire emergencies. This is a dire emergency,” said Deputy Public Defender Mindy Graves, who has put money in the Ohio-based fund for three years. “They’re talking about layoffs, they’re talking about salary cuts, they’re talking about losing benefits. There are a lot of rumors flying around, but at this point we’re all hoping for the best, hoping for a miracle.”

Some employees who put off saving for the future are now breathing an ironic sigh of relief.

“I was postponing getting involved in (the retirement plan) until January. I’m quite relieved,” said Stewart Hicks, a deputy district attorney in the writs and appeals section who has worked for the county for eight years.