Deputies’ Union Sues Over Retirement Funds

Already in the midst of tense labor negotiations, the Ventura County Deputy Sheriff’s Assn. turned up the heat Friday by filing a lawsuit alleging the county owes more than $100 million to an employees’ retirement fund.

The union’s lawsuit says the county acted improperly when it stopped making employer contributions in 1996 to the Ventura County Employees’ Retirement System, which serves 3,600 retirees, including former deputies. It alleges the county used those contributions to balance its budget.

“They need to get their financial act in order and stop living off the employees’ benefits,” said Glen Kitzmann, president of the association.

County attorneys argue the law allows the county to cease contributions when there is a significant cushion. The $2-billion retirement fund, which receives contributions from 7,400 county employees, has a surplus of $342 million.

Chief Executive Johnny Johnston contended the lawsuit is simply a means of applying political pressure as deputies push for increased retirement benefit plans that could cost the county $100 million. “There’s no question that it’s connected to the bargaining,” he said.

Kitzmann said the suit “really doesn’t have anything direct to do with negotiations.”

Contract talks with the county have stalled over the benefits issue, and earlier this week deputies picketed the office of Supervisor Judy Mikels, who is up for reelection next year. They are threatening to picket others.

“It’s misguided and it probably will be unsuccessful,” Johnston said of the lawsuit. “But if it was successful, it’s not like we have this money in an account somewhere. We’d have to go out and borrow the money to over-fund the retirement system even more. Then we’d have to pay off the money we borrowed by laying people off. We’d have to cut back on public safety officers.”

County officials said they expected the suit. The union brought the same complaint to the county in a claim filed in June and threatened to sue if the county did not offer a settlement.

The union and the county both cite a 1996 opinion on county retirement systems issued by the California attorney general’s office to support their conflicting arguments. Now it will be up to a judge to sort it out.

When the retirement fund has more liabilities than assets, the county must kick in a higher contribution, county retirement administrator Van Perris said. That was the case in 1995, when a bond for more than $150 million was needed to get the retirement fund back on track.

But when the system is brimming with funds, as is the case today, the county is entitled to adjust its contribution schedule, Perris said.

“If you’re underfunded and the county has to pay an additional amount of money, it seems to me when you’re over-funded the county should have to pay a lesser amount,” he said. The booming stock market of the late 1990s accelerated the growth of the county’s retirement fund.

The investments are structured to yield annual returns of 8.25% but since 1996 have yielded an annualized return of 11.4%. That helped over-fund the system by $342 million. As the economy faltered over the last year, however, returns leveled off.