The Riverside County Board of Supervisors agreed to salary hikes for county employees recently, in exchange for changes to the pension system.
The supervisors approved the granting of more than $730 million in raises over four years, according to a story published by the Press-Enterprise.
However, in order to make this happen, new hires will now receive less in pension benefits – and current employees will have to pay more toward their retirement funds, the P-E reported.
The county – which still closes its offices on Fridays in a money-saving move instituted when the country plunged into a recession – has lost $230 million in tax revenue since 2007, according to published reports.
This year, the county has laid off 229 employees in an effort to balance the 2013 fiscal budget and has not ruled out the possibility of more layoffs in future, the P-E reported.
The county’s pension system now owes $4.7 billion to current and future retirees and lists assets worth $4.2 billion -- already running at a deficit -- published reports stated.
According to the newspaper report, UCLA Prof. David Lewin said pension reforms to counter pay raises are usually done in times of economic prosperity, not when a county is cash strapped.
The P-E reported that Barbara Olivier, the county’s human resources director, said it was a challenge to achieve pension reform because it is illegal for a county to remove an employee benefit already in place.