Mendocino County Employees Retirement Association

Changes in Unfunded Pension Obligations Over Time

So - on an annual basis, what was the change in Unfunded Pension Obligations without considering the impact of the POBs? In other words, what was the underlying trend produced by MCERA and the County - was MCERA and/or the County making things better or worse? This graph shows the answer:

Annual Changes in Underlying Unfunded Pension Obligations
County of Mendocino - MCERA

The 2009 value is based on our projection of what the UAAL will be on June 30, 2009.

The 1994 through 2008 values are obtained from MCERA's Actuarial Valuations and the County's Audited Financial Statements. In 13 of those 15 years the County's Pension Funding deficit - or Unfunded Pension Obligations - grew. The grew smaller in only 2 of those 15 years.

As we've said, the factors under MCERA's control produced most of the growth of Unfunded Pension Obligations over the 10 year period leading up to the 2002 Pension Bonds. While we haven't analyzed which part of these yearly changes can be ascribed to MCERA and which to the County - the bottom line is from 1994 through 2005 the underlying Unfunded Pension Obligations grew every year!

We are unaware of anyone in either MCERA or the County even noticing this trend, much less trying to do something about it.

Our analysis leads us to conclude the biggest cause of the County's pension debt is that MCERA's overall returns on investment over that period of time was significantly below its target. The next page presents MCERA's rebuttal of a part of our findings related to that conclusion.