Public pension debt in Sacramento and other counties is much higher than governments have reported, according to a study released Tuesday.

Sacramento County's retirement plan has 55 percent of the funding needed to pay the benefits it owes, according to the report by the Stanford Institute for Economic Policy Research and California Common Sense.

That's 28 percent lower than the funded status reported by the Sacramento County Employees' Retirement System, or SCERS.

The reason for the difference in estimated debt?

The Stanford report used a lower annual rate of return, 5 percent, compared to the 7.75 percent used by SCERS, said Dakin Sloss, executive director of California Common Sense, a group of Stanford students and alumni involved in public policy analysis. Lower investment returns would mean higher costs for the county.

Sloss said the authors employed the same type of analysis used on private-sector investment plans, and shunned the method used by SCERS and other local governments. The study examined 20 local government pension systems and found them to be funded at an average of 54 percent.

Local and state pension plans follow the reporting requirements set by the Governmental Accounting Standards Board.

Richard Stensrud, chief executive officer of SCERS, called the study flawed because it ignored the board's approved methods. He said the board spent more than three years studying the matter before adopting the standard.

SCERS expects an investment return of 7.75 percent a year because it has averaged 8.2 percent a year since 1986, Stensrud said.

Steve Maviglio, spokesman for the labor union-backed Californians for Retirement Security, also said the report is misleading.

"They're cherry-picking statistics for a doom-based scenario," said Maviglio, who characterized the Stanford organizations as conservative, with an agenda of rolling back pension benefits.

Sloss said California Common Sense is trying to promote debate on an important issue.

"We want people to have a fair retirement – how do we pay for that?" he said. "To pay for these increased costs, we will have to raise taxes or cut services."

As the report points out, Sacramento County's retirement costs have been going up. Compared to the $47 million paid to the plan in 1999, the county can expect to pay almost $200 million to SCERS this year.

The county would have to pay more than twice that amount if SCERS adopted more realistic projections identified in the report, the authors argue.

The report also showed how Sacramento County's public safety employees get much more generous benefits than other employee groups, which is also the case statewide.

The county's public safety retirees made an average of $64,000 in the last fiscal year, compared to other retirees, who made an average of $27,000.

Those amounts were slightly below the average for the 20 local systems in the report.

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Call The Bee's Brad Branan, (916) 321-1065. Follow him on Twitter @BradB_at_SacBee.

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