Status of the General Subsidy

November 19, 2007
At a special meeting on Monday, November 19, 2007, the SBCERA Board of Retirement made the following decision on the status of the General Subsidy:

1. The General Subsidy has been approved for one year. The Board of Trustees approved a motion to continue the maximum General Subsidy payment of $230 based on 20 years of County or district service reduced incrementally per year of service, equaling a minimum payment of $115 for those members with 10 years of County or district service.  This motion is in effect November 1, 2007 through October 31, 2008.
   
   
2. A portion of $8.5 million in excess earnings will be allocated to the General Subsidy.  The Board approved a motion that would split $8.5 million of excess earnings realized as of June 30, 2007.  A 50% allocation will be made to the General Subsidy; the other 50% will go to pay down investment losses from previous years.  The General Subsidy has been actuarially evaluated to be sustainable over the next six years.  Based on the facts of the Plan today, the additional funds would only continue the subsidy for about a quarter of a year.

November 2007

The Board of Retirement will hold a special meeting on Monday, November 19, 2007, to discuss and vote on the plausibility of the General Subsidy for 2007-2008.  The status of this non-vested benefit is reviewed each year by the Board of Retirement in relation to available excess Plan earnings to sustain it.  The public is invited to this meeting, as well as any other open session meeting held by the Board of Retirement.  The meeting will be held at the SBCERA Board Chambers at 348 W. Hospitality Lane, First Floor, San Bernardino, CA 92415. It begins promptly at 9 a.m.

For more detailed information about the origin and details of this benefit, please see the following Frequently Asked Questions (FAQ) General Subsidy brochure prepared by SBCERA Counsel: http://www.sbcera.org/pdf_files/brochures/FAQ_General_Subsidy.pdf

February 2007

In a Special Meeting of the Board of Trustees on Tuesday, February 20, 2007, the Board moved to continue with the current policy of not crediting interest to the General Subsidy Reserve, and for the General Subsidy to continue at the same monthly allowance until it runs out.

September 2006

At its monthly meeting on Thursday, September 7, 2006, the SBCERA Board of Retirement made the following decision on the status of the General Subsidy:

1. There is no change to the current General Subsidy payment structure. The Board of Trustees approved a motion to continue the maximum General Subsidy payment of $230 based on 20 years of County or district service reduced incrementally per year of service, equaling a minimum payment of $115 for those members with 10 years of County or district service.  This motion is in effect from November 1, 2006 to October 31, 2007.
   
   
2. There is no change in the current interest crediting policy. The Board of Trustees approved a motion to table any change in current policy to credit interest to the General Subsidy reserve for two months to enable staff to further research the financial and legal implications of such an action, especially in light of the Kroll Report released from San Diego City.
   
   
3. The subsidy payments will continue to be issued on a monthly basis. No motion was made regarding a proposal on paying the General Subsidy as an annual payment as opposed to monthly payments.