GENERAL SUBSIDY PAYMENTS HAVE ENDED

November 15, 2011

The Discretionary Retiree Subsidy payment (also known as the General Subsidy) has ended.

Beginning with November payments, all eligible members and beneficiaries who were receiving the General Subsidy will no longer receive this discretionary amount. Please see below for more details.

GENERAL SUBSIDY PAYMENTS ENDING

October 4, 2011

This is a reminder that the Discretionary Retiree Subsidy payment (also known as the General Subsidy Adjustment) paid to eligible recipients of the San Bernardino County Employees’ Retirement Association (SBCERA) is ending.

Eligible members and beneficiaries will receive the subsidy only through October 31, 2011, as previously approved by the SBCERA Board of Retirement. After this date, all General Subsidy payments will end and members and beneficiaries will no longer receive this discretionary subsidy amount.

The General Subsidy is not a guaranteed or vested benefit, and no member or retired member has a vested right to receive the General Subsidy. The assets to provide for the subsidy have at all times been secondary to the assets required to provide for the normal retirement, disability and death benefits of the membership.

On April 7, 2011, the SBCERA Board approved the transfer of $40.6 million from the Discretionary Retiree Subsidy Reserve to the County Advance Reserve (also known as the Employer Current Service Reserve). The County Advance Reserve is an SBCERA reserve that holds the total accumulated employer contributions for the benefit of its members for service rendered to help fund normal future benefits. As a result of this transfer, the Discretionary Retiree Subsidy Reserve will be depleted.

At SBCERA, we strive to keep our members informed about important changes that may affect their retirement benefits. Detailed information about termination of the General Subsidy has been provided on the SBCERA web site for several months, and has also been included in the SBCERA “Quarterly Review” newsletter. For more information, please review the General Subsidy Frequently Asked Questions (FAQs).

BOARD APPROVES TRANSFER, SUBSIDY TO END OCTOBER 2011

April 7, 2011

On Thursday, April 7, 2011, the SBCERA Board of Retirement voted to approve the transfer of $40.6 million from the Discretionary Retiree Subsidy Reserve to the County Advance Reserve (also known as the Employer Current Service Reserve). Of the Board Members present, 5 voted for and 4 voted against this action.

This decision will have the following impacts:

• The Discretionary Retiree Subsidy Reserve will be depleted, ending the possibility of future subsidy payments.

• SBCERA’s funding status will increase slightly.

• Average employer contribution rates will decrease over the next 20 years.

The County Advance Reserve is an SBCERA reserve that holds the total accumulated employer contributions for the benefit of General and Safety members on account of service rendered.

Of SBCERA’s 9,210 payees, 7,131 receive the subsidy. All retirees and/or beneficiaries currently receiving the subsidy will continue to receive these payments through October 31, 2011, as previously approved by the Board of Retirement; however, after this time, all subsidy payments will end.

We will be notifying those retirees and beneficiaries receiving the subsidy to inform them of how this decision will affect their benefit.

The discretionary retiree subsidy of up to $230 per month was awarded to members with more than 10 years of service credit. The subsidy is not a guaranteed or vested benefit to retirees or eligible beneficiaries. It is a direct outcome of the plan’s performance. Only members who retired on or before April 1, 2010 are eligible for the subsidy. The assets to provide for the subsidy shall be at all times secondary to the assets required to provide for the retirement, disability and death benefits for the benefit of the membership.

The SBCERA Board of Retirement has a fiduciary responsibility to make decisions that are in the best interest of the entire membership, which includes more than 32,000 active and retired members and their beneficiaries.

BOARD OF RETIREMENT TO DISCUSS DISCRETIONARY RETIREE SUBSIDY

March 31, 2011

On Thursday, April 7, 2011, the SBCERA Board of Retirement will review and discuss the following action with regard to the Discretionary Retiree Subsidy:

• Transfer the money from the Discretionary Retiree Subsidy Reserve back into the County Advance Reserve. Such an action would transfer the remaining funds into the County Advance Reserve, also known as the Employer Current Service Reserve. If approved, the transfer of these funds would deplete this reserve and end any future Discretionary Retiree Subsidy payments as of October 31, 2011.

The SBCERA Board of Retirement has a fiduciary responsibility to make decisions that are in the best interest of the entire membership, which includes more than 32,000 active and retired members and their beneficiaries. Therefore, the Board will closely review this item to determine if this is in the best interest of all SBCERA members and beneficiaries.

The Board of Retirement meeting will take place at 9:00 a.m. in the SBCERA Board Chambers located at 348 W. Hospitality Lane on the First Floor in San Bernardino, CA. The meeting is open to the public.

If the Board makes a decision that will affect members receiving the Discretionary Retiree Subsidy, SBCERA will contact these members and beneficiaries directly to inform them of the impact to their retirement benefits.

SBCERA welcomes feedback from its membership. Members are encouraged to attend the meeting to express their opinions on this matter. Comments may also be directed to cporter@sbcera.org.

DISCRETIONARY RETIREE SUBSIDY TO BE DISCUSSED

March 18, 2011

On Monday, March 21, 2011, the SBCERA Board of Retirement Administrative Committee will review and discuss the following actions with regard to the Discretionary Retiree Subsidy:

1. Transfer the money from the Discretionary Retiree Subsidy Reserve back into the County Advance Reserve. Such an action would transfer the remaining funds into the County Advance Reserve, also known as the Employer Current Service Reserve. This reserve includes the total accumulated contributions of the employer held for the benefit of non-retired general and safety members on account of service rendered as a member of the retirement system.

2. Discontinue or take back the remainder of Discretionary Retiree Subsidy awarded on November 15, 2010. This item is up for discussion and a legal opinion will be presented in regards to this matter.

The SBCERA Board of Retirement has a fiduciary responsibility to make decisions that are in the best interest of the entire membership, which includes more than 32,000 active and retired members and their beneficiaries. Therefore, the Board will closely review these items to determine if this is in the best interest of all SBCERA members and beneficiaries.

Upon the Administrative Committee’s review and discussion, these items will be taken to the full Board of Retirement for a final vote at the next regularly scheduled SBCERA Board Meeting on Thursday, April 7, 2011 at 9:00 a.m. Both meetings are open to the public and will take place in the SBCERA Board Chambers located at 348 W. Hospitality Lane on the First Floor in San Bernardino, CA.

If decisions are made at the April 7, 2011 meeting that affect those receiving the Discretionary Retiree Subsidy, SBCERA will contact the members and beneficiaries directly to inform them of the impact to their retirement benefits.

SBCERA welcomes feedback from its membership. Members are encouraged to attend these meetings to express their opinions on this matter. Comments may also be directed to cporter@sbcera.org.

For more information about the Discretionary Retiree Subsidy, please read SBCERA’s General Subsidy FAQs.

November 15, 2010

At a special meeting on Monday, November 15, 2010, the SBCERA Board of Retirement made the following decision on the status of the General Subsidy:

• The General Subsidy has been approved for one year. The Board of Trustees approved a motion to continue the maximum discretionary 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.  Only members who retired on or before April 1, 2010 are eligible for the discretionary General Subsidy.  This motion is in effect November 1, 2010 through October 31, 2011.

The Board discussed the remaining General Subsidy reserve balance of $61,618,000. The Board of Trustees reviewed and discussed the availability of the remaining assets in the General Subsidy reserve.  The subsidy commitment is subject at all times to the availability of funds, and at all times is secondary to the assets to provide for retirement, disability and death benefits for retirees and beneficiaries. The one-year cost for providing the discretionary General Subsidy is approximately $16 million. 

November 17, 2009

At a Special Board Meeting on November 16, 2009, the SBCERA Board of Retirement made the following decisions on the status of the General Subsidy:

1. Granted General Subsidy payments for another year, through 2010.  The Board of Trustees voted to continue General Subsidy payments from November 1, 2009 to October 31, 2010 with no changes to the existing payment structure. The maximum General Subsidy will remain $230 based on 20 years of County or district service, and will decrease incrementally per year of service equaling a minimum payment of $115 for those members with 10 years of service.  Eligible surviving spouses of a deceased retiree will automatically receive 60 percent of the amount the retiree received. In addition, service-connected disability retirees with less than ten years of service will automatically receive 50% of the subsidy.

2. Approved amendments to General Subsidy Policy.  The Board of Trustees reviewed and approved revisions to the Discretionary Retiree Subsidy Policy, awarding a General Subsidy for members who retire from SBCERA on or before April 1, 2010. Based on the revisions, any member who retires after
   April 1, 2010 will no longer receive a General Subsidy award.