The Contra Costa employee retirement fund has lost an estimated $1.3 billion or a quarter of its investment assets in the first 10 months this year.
The dramatic drop means higher county contributions to the pension plan from a county that has already cut almost $112 million from its budget since May, with more trimming expected. The fund dropped from $5.28 billion to $3.98 billion.
"Unfortunately, when the market goes down like it has, 18 months later the county has to pay more into a retirement system which takes away from important services," said Supervisor John Gioia of Richmond, a member of the Contra Costa County Employees' Retirement Association board. The county's pension pay structure adjustments have an 18-month lag time.
Based on a 30 percent drop in the retirement fund by Dec. 31, Contra Costa would have to pay $14 million more to employee pensions over the next six years, said county finance chief Lisa Driscoll.
The county would begin paying $868,000 more annually in July 2010, with incremental increases over the next four years, she said.
In July, the county will actually contribute about $1 million less to the pension fund because of the previous stock market surge.
Contra Costa employees will not be affected by the severe fund drop.
"When there is a shortfall in the market, the employer picks up the tab, not the employees," Gioia said. He added that the retirement fund had no exposure to failed Advertisementinvestment funds.
The county retirement fund has averaged a 7.8 percent return rate.
"Over time it all balances out because historically it's been in that range over time," Gioia said.
Alameda County reported a loss of about $1.7 billion, about 30 percent of its worker retirement fund, during the same 10-month period this year.
The Alameda County fund, as of October, sits at approximately $3.9 billion — down from $5.6 billion in December 2007.
It is the lowest the fund has been since 2003, when it also sat at around $3.9 billion.
Earlier this month, officials with the California Public Employees' Retirement System said its portfolio was down $81.4 billion since hitting a peak in October 2007.
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