In a move hailed as a step toward fiscal responsibility, Nevada County is set to increase the transparency of its pension funding, following the Board of Supervisors' approval of a new pension management policy. This change will enable residents to easily access annual reports on the County's pension status directly on the County's website, including detailed information on funding levels and planned mitigations for pension obligations.
Starting July 1, the community will have the capacity to fully examine the financial machinations of the California Public Employees’ Retirement System (CalPERS)—a transparent venture into a realm often obscured by opaque bureaucratic processes. The reports aim to clearly lay out the latest funding status and the anticipated actions from the County in addressing pension obligations for the forthcoming budget year. This push for transparency comes as part of a larger strategy to not only publicly share information but to actively reduce the unfunded pension liability of the County.
As detailed by Nevada County’s recent announcements, several options are under exploration to tackle the looming unfunded pension liability. Strategies include setting aside incremental funds annually into a pension trust and making discretionary payments beyond the yearly pension costs. These are built upon previous measures since 2006, such as pre-paying the unfunded liability—which has saved the County approximately half a million dollars in potential interest costs—and consistently meeting the full annual CalPERS costs.
The urgency to revise and to robustly implement pension policy is partly a reaction to the recommendations put forth in a 2023-24 Nevada County Civil Grand Jury Report, urging for a strategic plan to eradicate unfunded pension liabilities. With the pension plan currently around 63% funded, the County recognizes that they sit on a looming deficit, with only two-thirds of the necessary funding set aside to cover employee retirement benefits. As of 2023, the County found itself grappling with $273.9 million in employee pension commitments, resulting in a 20-year payoff plan estimated at $449.7 million, including interest.
Discussions around pensions are often shrouded in complexity, but Board of Supervisors Chair Heidi Hall insists on bringing them into the light. "It’s going to be incredibly important for the public to understand we have a $450 million debt and we are going to be responsible for it for many years," Hall explained, recognizing the weight of the financial challenge ahead. Meanwhile, Supervisor Sue Hoek expressed support for the new policy, echoing the need for transparency. "I like the transparency and putting this out to the public, so they don’t feel like we’re hiding something all the time," Hoek told Nevada County.
