CalPERS’ pension fund ‘shortfall’ will cost Huntington Beach $23 million more

Huntington Beach must pay another $23 million to the California Public Employees’ Retirement System pension fund over the next few years, an agency representative said at Monday’s City Council meeting.

Kerry Worgan, a senior CalPERS actuary, said the city will have to contribute another $23 million over a few years, due to a half-point decrease in the assumed investment returns from 7.5% to 7%.

The representative’s appearance was approved by the council at the last meeting after being proposed by Councilman Billy O’Connell.

O’Connell took umbrage Monday with the agency’s request for increased contributions, saying CalPERS has “failed” the city because residents are going to have to foot the bill to cover the shortfall between the fund’s performance and what retired city employees are contractually owed.

O’Connell asked Worgan who is responsible for the $23 million “shortfall.”

“I don’t know if anyone in particular is responsible, it’s a reflection of the economic times,” Worgan responded. “If we don’t think we can earn 7.5%, it’s immoral to assume we can earn that, knowing we can only earn 7%.”

Worgan said CalPERS’ returns have been tempered by global market performance.

O’Connell was not content with the answer.

“We have huge needs in this city,” O’Connell said. “Do you realize the impact you’re having on our city? The impact you’re having on this state with all these jurisdictions you represent is terrible.”

Councilman Erik Peterson said the city has unmet needs, such as road repairs, that are also pressing.

Also at the meeting, the council voted to support pension-reform legislation proposed by state Sen. John Moorlach (R-Costa Mesa).

Moorlach has proposed three bills and three amendments to the state Constitution. One amendment would “prohibit public employers from increasing retirement benefits for their employees without two-thirds voter approval.”

Originally, the council considered the item April 17 but voted to have the Intergovernmental Relations Committee review the legislation before the council took another vote to conform to established protocol.

The IRC, which voted to support the legislation, is a council subcommittee formed by Mayor Barbara Delgleize, Mayor Pro Tem Mike Posey and Councilwoman Jill Hardy. The group reviews pending legislation and its potential effects on the city.

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