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SLO County’s unfunded pension liability soaring, now over $1 billion

March 26, 2025

By KAREN VELIE

San Luis Obispo County’s unfunded pension liability is now over $1 billion primarily because of huge pay raises and large cost of living increases for retirees. Other factors include more retirees than current employees (dependency ratio), and retirees living longer.

The SLO County Pension Trust Board reported an unfunded pension debt of $1.008 billion on Jan. 1, up from $943 million a year earlier, according to the Annual Actuarial Valuation report. The county is more than $1 billion short in the trust account set aside to pay former employees their monthly pensions and benefits.

Summary of key valuation results in thousands

For every dollar the county doles out for payroll, more than 54 cents currently goes into the pension trust. This includes both employer and employee contributions.

The county pension fund generally receives money from employee contributions, employer contributions and returns on investments.

In 2023, the pension deficit grew by $65.6 million, or 6.7%.

In addition, projected employee payroll grew by 4.9% to $253.8 million. Pension trust administrators had anticipated a 3% yearly increase in payroll.

The total owed to present and past employees in retirement benefits (actuarial liability) increased more than expected primarily because of large salary increases and higher than expected cost of living raises for retirees (inflation), according to the report.

As the county’s unfunded pension liabilities soar, the number of retirees receiving more than $210,000 in pension and benefits a year is growing, according to Transparent California.

The top SLO County pensioners in 2023:

Frank Freitas, tax collector – $247,730

Jeff Hamm, health agency director – $243,719

Pat Hedges, sheriff-coroner – $219,848

Dan Hilford, assistant district attorney – $219,031

Gerald Shea, district attorney – $218,410

Gere Sibbach, auditor-controller – $213,761

Enn Mannard, medical director – $211,234

 


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What’s absurd is that the “governing class” always winds up rich.


8

There must be caps on pensions. Here is one idea:

Cap county pensions to no more than $104K a year. That’s $2000 a week. Government employees who paid into Social Security will now get that money as well, remember. Make this effective in, say, three years, so someone at the top or over $2K a week can leave early for another job elsewhere without the cap in an effort to get a higher retirement, or retire in three years at his higher amount.

This would save money in retirement payouts without reducing anyone’s benefits, but when the three years are up, either retire with your higher amount the day before it is effective or move to another job elsewhere.

The time delay would give people a chance to plan. It would also result in higher paid workers leaving, making room for younger, less-well paid employees who would then fall under the cap.

These are still very generous benefits. By the time you retire I would hope you could live on $2000 a week in retirement from the county plus any investment income and Social Security. That’s more than many people make working full time!


7

California implemented a system to cap pensions under AB340 in 2012 (effective date 01.01.2013). This only applied to new employees entering the State or a local retirement system. Any effects this may have will have to wait until these employees start to retire.


6

This happens when you run government like a gravy train rather than a business.


7

Its simple… put on your memory caps folks… we have raised taxes… still the deficit grows… we have laid off employees… still the deficit grows… we have shut down whole county departments and privatized them… still the deficit grows… cutting someone’s benefits won’t work either… growth is the only thing we haven’t seriously tried…


-5

Memory cap is on, name me one time benefits were cut? The most recent unemployment reports said even though the unemployment rate rose one area where there was growrth was government employees, so growth has been tried and that doesn’t work. Compensation has never been cut.


17

County workers pensions have been cut for new employees and we have not tried growth… obviously your definition of economic growth is different from mine… allow development… that’s how government earns money for schools roads and payroll… you don’t get there by cutting benefits or raising taxes… you are operation on envy… not common sense…


-2

sorry a cut is when something you had has been reduced, new employees never had the really outrageous pensions so it wasn’t a cut, it was just lower than what previous employees had. Cutting costs also stimulates the economy.


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