No road work ahead on projects throughout the county
July 8, 2013
ORANGE – On June 27, OCTA received the Golden Hub of Innovation award from the Association of California Cities – Orange County (ACC-OC) for its pension reform plan.
Under OCTA’s pension plan, administrative employees will contribute an average of two percent of their salaries to their pensions beginning Jan. 1, 2014. That contribution will increase each year until employees are paying 100 percent of their employee share by Jan. 1, 2017.
“It is an honor to be recognized by the ACC-OC for OCTA’s pension reform plan,” said OCTA CEO Darrell E. Johnson. “Phasing in this implementation is the right thing to do for our employees and will help minimize the impact to them while looking to the long-term financial sustainability of our agency.”
OCTA has been paying an average of eight percent for each administrative employee’s share of their pension costs. OCTA’s 1,100 union-represented coach operators, maintenance workers, facilities technicians and parts clerks already contributed 100 percent of the employee share.
The progressive plan will result in an $8.2 million savings to taxpayers over the three-year period. During the next 20 years, employees paying their own pension share is expected to result in a savings of $85 million.
"OCTA's proactive and collaborative approach to addressing rising pension costs is a great example for other local government agencies to model," said Lacy Kelly, Chief Executive Officer of ACC-OC. "The plan mirrors the best practices identified in ACC-OC's Pension Reform Principles, which provide a road map for local governments looking to mitigate the impacts of unfunded pension liability to taxpayers. We're proud of OCTA's leadership on this issue."
OCTA’s nearly 450 administrative employees belong to the Orange County Employees Retirement System and the overwhelming majority – 96 percent – has a retirement formula of 1.67 percent at the age of 57.5. This is one of the lowest pension formulas in the state.
In the era of shrinking budgets and belt tightening, OCTA continues to lead as an innovative and nimble government agency. Administrative employees serve at-will and are not members of a union. OCTA has a merit-based, pay-for-performance model much like the private sector where employees only receive raises if they achieve clearly defined goals and objectives. And in response to the Great Recession, from mid 2009 through 2012, OCTA administrative employees received no merit-based pay raises.
“From innovative transportation solutions to administrative efficiencies, OCTA has long been a pioneering public agency that runs like a private-sector corporation,” said OCTA Chairman Greg Winterbottom. “This is one more example of ensuring the taxpayers’ dollars are spent most effectively.”
