Riverside County government’s unfunded pension liabilities are now about $3.8 billion, down $160 million in the last two years, with projections for the pension gap to continue to narrow in the coming decade, according to a report that the Board of Supervisors will review Tuesday.
The 2026 Pension Advisory Review Committee report, which the board will scrutinize during its policy agenda Tuesday, said the county’s retirement apparatus is now 77% funded, compared to 75% previously. The key metric reflective of a sound pension system is considered 80% funded status.
The county’s current total unfunded pension gap compares to $3.93 billion estimated in the 2025 report, according to PARC. All figures are trailing indicators, based on calculations that end in fiscal year 2023-24 — the most recent period for which confirmed data is available via the California Public Employees’ Retirement System.
“Based upon several factors, the long-term pension outlook remains favorable, with rate increases projected to peak early in the next decade,” the report stated. “The combined funded status of the plans is anticipated to return to a funded status greater than the board’s goal of over 80% within the year. Projections will be tempered by year-to-year financial market performance, both favorable and unfavorable, impacting investment returns.”
The county’s current asset base supporting the pension system is $12.86 billion. The “actuarial accrued liability” is roughly $16.6 billion.
There are two main categories in the local pension system — safety and miscellaneous. The safety category covers sheriff’s deputies, District Attorney’s Office investigators, probation agents and others, while the miscellaneous rolls cover clerks, custodians, nurses, social workers, technicians and remaining employees not involved in any law enforcement function.
The amounts available to fund workers’ nest eggs in CalPERS fluctuate with the pension system’s investment performance. The most recent estimate tentatively showed an 11.6% rate of return for last year. The assumed rate of return going forward is 6.8%. In 2021-22, the investment portfolio ran a negative 6% return.
Poor investment returns over the duration of the Great Recession have required the county to pay higher amounts to CalPERS to cover loses in the safety and miscellaneous categories.
The aggregate contribution rates in the next fiscal year will be the equivalent of 51.9% of payroll for the safety category, and the equivalent of 27.4% of payroll for the miscellaneous category, according to the report.
Employees across the spectrum in county government generally contribute less than 10% of gross earnings toward their defined-benefit plans with CalPERS.
Annual General Fund allocations to support the retirement system will steadily rise over the next decade, cresting at $814 million in support by the mid 2030s, PARC said.
The county gained some relief from higher pension costs by selling $716 million in bonds at low interest rates in 2020 and applying the proceeds to pension debt reduction, or what then-Supervisor Kevin Jeffries compared at the time to “using a credit card to pay off a credit card.”
The 2020 bond debt was added to similar issuances in 2005 that were also intended to pare down long-term pension obligations, relying on advantageous interest rates. The county is expected to be able to repay the IOUs before 2040.
In the past, Jeffries and other supervisors had expressed a desire for the county to phase out some defined-benefit plans in favor of defined-contribution plans, analogous to most private sector retirement guarantees. But Executive Office staff described the process as riddled with hurdles because of requirements in state law.
Under pre-2012 plans negotiated with collective bargaining units, safety workers accrued retirement earnings according to a “3% at 50” formula, fixing compensation at 3% of the average of the three highest-paid years of an employee’s career, multiplied by the number of years on the job. An employee could begin collecting full retirement at age 50.
Miscellaneous workers received benefits based on a “3% at 60” formula.
Beginning in September 2012, new hires in the safety category began accruing retirement benefits under a 2% at 50 formula, while newly hired miscellaneous workers began accruing benefits under a 2% at 60 formula.
Legislation signed into law soon afterward added another category for public sector employees hired after Jan. 1, 2013. The lower benefit formula is 2% at 62 for miscellaneous and 2.7% at 57 for safety workers.