The Board of Retirement voted to reduce the amount of the Supplemental Benefit Allowance (SBA) effective January 1, 2011, in order to provide payments for a longer period of time. The Board made its decision after extensive discussion and consideration of feedback from SDCERA members. The change will affect all retired Tier A members who currently receive the SBA, and eligible Tier A members who retire in the future, including those receiving a benefit based on a disability.

The SBA is a non-vested, discretionary benefit paid to qualified General and Safety, Tier A members in addition to their guaranteed, lifetime monthly benefit. The benefit is funded from a reserve account containing voluntary contributions of excess earnings approved by the Board in prior years. The Board’s decision provides payments to retired members for nearly two years longer than if benefits were kept at current levels.

Of the $167 million currently in the reserve, approximately $115 million is restricted by the Ellsworth Settlement court ruling, which requires the maximum SBA to be maintained to at least $350, the amount in effect in early 2003, until the $115 million balance lasts. The remaining $52 million in the reserve is not restricted by the court ruling, but the Board agreed to continue to use the funds to pay for a reduced benefit.

The $115 million is estimated to exhaust in approximately four years, or sometime in 2015, depending on the rates of retirement. At that time, the SBA will be further reduced by half, cutting the maximum monthly allowance from $350 to $175. The lower benefit is estimated to last until sometime in early 2017, depending on retirement rates. At that time, the funds in the reserve will be completely exhausted and the benefit will end.

SBA: Monthly Allowance (pre-tax)

A new 8% annual assumed rate of return for the County’s pension program was adopted today by the San Diego County Employees Retirement Association (SDCERA) Board of Retirement. The Board’s vote is a proactive step to benefit its members by adopting an overall financial plan that will strengthen the pension portfolio.

To view the press release, click SDCERA Board of Retirement adopts 8% annual assumed rate of return.

On May 18, County of San Diego active General members voted to re-elect incumbent representative, Garry Sobeck, to the third seat on the SDCERA Board of Retirement. This will be Sobeck’s third term with the Board having been first elected in May 2004. Sobeck’s new term will  begin on July 1, 2010, and expire June 30, 2013.

Over 5,000 members voted in the election: approximately 36% of the eligible active General membership. SDCERA thanks those members for voting and also thanks Hong Au, Martin J. Cherry,  John Semerau and Catherine Turvey for running.

The U.S. District Court for the Southern District of New York dismissed San Diego County Employees Retirement Association’s case against Amaranth Advisors, LLC and certain individuals, arising from the collapse of the $6 billion Amaranth hedge fund. SDCERA, representing the retirement benefits of approximately 36,000 current and former San Diego County employees, is disappointed with the court’s decision and will be filing an appeal. SDCERA had filed the complaint for securities fraud against Amaranth in 2007. The motion to dismiss had been under submission by the court for over 2-1/2 years.

To view the press release, click SDCERA will appeal Amaranth decision.

If you are an active General member, you have an opportunity to be the voice of your fellow General members. Help make important decisions, such as how the pension fund is invested and setting SDCERA’s strategic direction. Consider running in the upcoming election for a seat on the Board of Retirement.

Pick up your candidate petition beginning March 25, 2010, at the SDCERA office located at 2275 Rio Bonito Way, Suite 200, in Mission Valley. Please see the election schedule below for important deadlines. The third seat is one of two seats elected by active General members. The elected candidate will serve a three-year term beginning on July 1, 2010.

Streaming video of Board of Retirement meetings is now available on the SDCERA web site. Watch live meetings or view archives of past meetings by clicking on the Meetings Online button on the homepage.

Visit the Board of Retirement page for more information about the Board of Retirement, including meeting calendars, Board members and responsibilities of the Board.