This is in response to Andy Caldwell’s opinion piece published on May 16 (“How to retire like a millionaire,” Voices).
Mr. Caldwell has engaged in generalizations as he seeks to undermine the true benefits to our community provided by the Santa Barbara County Employees’ Retirement System (aka, SBCERS).
At the close of its fiscal year on June 30, 2020, SBCERS had a total of 4,240 retirees who were paid an average retirement benefit of $3,466 per month, with general retirees receiving only an average of $2,826 per month or $33,912 annually. That’s a far cry from Mr. Caldwell’s unsupported and erroneous claim that “the average pension is more than $75,000 per year.”
Nevertheless, with retiree benefits approaching $200 million annually, SBCERS has one of the largest annual payrolls in the county, and the lion’s share of that amount likely is spent right here in Santa Barbara County.
Does Mr. Caldwell wish to eliminate that local stimulus?
SBCERS is funded by employee and employer contributions (56%) as well as income from investments (44%).
Since 1987, SBCERS has had an average annual rate of return of 7.99% over good and bad investment years, beating the present assumed rate of 7.0%. One can fairly consider an employee’s pension as a form of deferred compensation for those who elected public service at a rate of salary generally lower than is available in the private sector.
Private sector employees can negotiate collectively for similar defined benefit retirement plans if they choose to do so.
Finally, a well-managed public pension system, such as SBCERS, provides predictable security for retired employees through professionally managed funds with lower risks and costs than an average individual could and would obtain on their own.
Santa Barbara is fortunate to have SBCERS reliably assisting retired county employees. The statistics cited in this response are derived from the SBCERS Annual Report for the fiscal year ending June 30, 2020, and available at www.sbcers.org/wpcontent/uploads/2020-Annual-Report-Web-Version.pdf.
Rory O. Moore