Two high-ranking officials at the Orange County Employees Retirement Agency have been placed on paid leave in connection with a $228 million mistake that has resulted in multi-million dollar pension catch-up bills for agencies countywide.
In particular, the Orange County Fire Authority has been handed a catch-up bill of $76 million – the amount of contributions that went uncollected for eight years for “special pay” stipends for paramedics, EMT’s, and others with specialized jobs.
“To get a bill like that was devastating,” said Joe Kerr, president of the 800-member Orange County Professional Firefighters. “How could this oversight have gone on for some many years?”
OCERS has agreed to let the firefighters pay the bill over a 25-year period, at $4.5 million a year, beginning in July, said Lori Zeller, OCFA assistant chief of business services.
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The frustrating part is that the OCFA now has 25 years to pay off the same amount that should have been paid in 8 years. That three-fold extension is unheard of anywhere else. Imagine asking your bank to allow you to take an extra 25 years on 8 years of back mortgage payments.
That is $76,000,000 of principal that will not accrue the interest that it would have had the money been collected correctly. Now taxpayers have to backfill this screw up and make up the difference NOW. We don't get 25 years to pay it off because many of the pensioners have retired and nearly ALL of those currently on the job will have retired by the time we are done paying the bill to cover lost interest. No wonder OCFA was looking like a bargain to so many cities seeking to contract fire services to them: OCFA wasn't paying their bills!