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For the most part, employees have embraced the system. Lafayette representatives have inquired about joining CalPERS, Falk said, but they made no proposal. Orinda's union also asked but did not object when the council declined after consulting with an actuary.
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Employees are encouraged to make additional contributions, which the city matches up to a capped amount. For Lafayette and Danville, that's 5 percent; for Orinda, it's 3. Employees, fully vested after five years, direct their money into the investment funds of their choice. It's theirs to keep when they leave their jobs.
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"Urban planners and municipal engineers who have experience with other cities may be reluctant to take a job in a non pensioned city," Falk said, "because they would stop accruing PERS years that benefit them."
Lafayette, the oldest of the three cities, instituted the plan when it incorporated in 1968.
"The founding council wasn't comfortable losing control of how retirement costs would increase over time," Falk said. "It was prophetic on their part. They bucked the trend."
Said Orinda City Manager Janet Keeter, "There's a lot to be said for Roshe Run Camouflage knowing what your costs will be year to year, because it's all based on payroll."
Danville did likewise when it incorporated in 1982; Orinda followed suit in 1985. (Only police officers, whom the three cities contract through the Sheriff's Office, are exempt. They belong to a county plan.)
If there is a downside to being a non CalPERS city the Contra Costa communities are believed to be the only three it surfaces during job recruitment.
"We've had some employees here for 15 or 20 years, so I wouldn't say it's been a detriment in keeping them," said Danville Town Manager Joe Calabrigo. "All of our employees know what they signed on for when they joined us."
"These three little cities are examples of how municipalities can be run in a way that is fiscally sustainable, yet fair to employees," said Lafayette City Manager Steven Falk. "I think they deserve some credit for taking a prudent approach."
If you've kept up with the hand wringing over public pension plans, you know California is doomed. It someday will break apart from North America and slide to the bottom of the ocean under the weight of unfunded liabilities.
has attacked this topic like a hound on a ham, is already preparing the eulogy. He recently reported that the state's pension debt is $257 billion, or $20,700 for every household in the state.
Keeter said she worried about recruitment when she came to Orinda seven years ago, but it hasn't been a problem. More than 400 applicants applied for an office assistant's position, and a current search for a finance director has yielded a "great pool of candidates."
Orinda, Danville and Lafayette offer defined contribution plans, meaning the city knows exactly how much it pays in retirement costs when each payday arrives. Each city deposits the equivalent of 10 percent of an employee's salary into his or her untaxed retirement fund.
cities are operating free of such concerns. They are unencumbered by pension debt, pay for retirement liabilities as they go, and are staffed by seemingly satisfied employees.
Retirement plans don't have to spell doom. There are three examples in Contra Costa that prove it.
cities participate in the California Public Employees Retirement System CalPERS, as it is known a defined benefit plan that calculates pension payouts by multiplying years worked times highest salary times a fixed percentage (usually 2.5 percent). A 20 year employee, retiring with a $100,000 salary, gets $50,000 annually for life regardless of whether the city set aside that much.
All three are in Contra Costa County: Lafayette, Danville and Orinda.
How three Contra Costa cities avoided the doomsday of pension plans
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