Del Norte supervisors approve transfer of OPEB assets from CalPERS SERP into PARS 115 trust after public questions

Del Norte County’s Board of Supervisors on an otherwise routine agenda voted unanimously to authorize the county administrative officer to send certification letters to CalPERS requesting liquidation and a trustee-to-trustee transfer of the county’s post-employment benefits assets from the CalPERS SERP into the Public Agencies Post-Employment Benefits Trust administered by PARS.

The action followed a 40-minute presentation from Matt Spooner of Public Agency Retirement Services (PARS), who described PARS’s 115 trust as a vehicle for pre-funding pension and OPEB (other post-employment benefits) liabilities and said the program gives counties “access to an investment professional” through PFM Asset Management and a trustee relationship with U.S. Bank. “Just to be clear what I’m not here to do today is to propose a change in your pension program which you currently have with CalPERS,” Spooner told the board.

Why it matters: Del Norte officials and PARS presented the transfer as a step to reduce the county’s long-term unfunded OPEB liability and to smooth future pension-cost volatility, citing projections presented by PARS showing rising CalPERS contribution rates. During the meeting PARS told the board the county’s OPEB liability is roughly $73,000,000 and is funded at about 1.4 percent; PARS contrasted its historical net returns to CalPERS-serviced programs in marketing slides shown in the presentation.

Public concern and board response: Multiple members of the public, including Norma Williams, chapter president of DNCEA SEIU Local 101, and commentator Alicia Williams, urged caution and called for transparency and limits on access to the funds. Norma Williams said union members feared the trust could become a “piggy bank” and asked that withdrawals be strictly limited to pension or OPEB purposes. Alicia Williams asked for clearer, “apples-to-apples” performance comparisons between PARS and other independent managers and for written safeguards on when the county could access the money.

Supervisor Valerie Starkey raised the same procedural concern on behalf of the board and public: “The way it’s set up now, I believe that it’s the CAO who could withdraw those funds. So perhaps we need to put more protection mechanisms in place.” Supervisor Short proposed a change in the county’s rules to require a four-fifths board vote before any withdrawal, and County Administrative Officer Neil Lopez said staff would add language on the Admin Manual requiring such a supermajority if the board directs it.

PARS’s reply: Spooner and other PARS representatives said the 115 trust is designed as a purpose-specific vehicle and that funds placed into a pension or OPEB trust are legally restricted to those uses. Spooner also emphasized that PARS provides asset management via PFM and that reported performance comparisons shown at the meeting were net of fees. He offered to provide further comparative performance data and said PARS would work with the county to set risk tolerance and an investment policy statement.

Formal action and vote: The board voted 5–0 to authorize the CAO to sign and send the certification letters to CalPERS to transfer OPEB assets from the SERP into the PARS trust and to authorize the CAO to execute any documents needed to complete the transfer and close the SERP account.

What the board said about oversight: Supervisors and staff agreed to return with more specific written parameters. Supervisor Starkey asked staff to prepare language for the Admin Manual requiring a four-fifths vote before using the funds; CAO Lopez said he would add the item for a future board revision. County staff and a panelist also noted the auditor’s role and existing audit controls that would apply to trust disbursements.

Ending: County staff and PARS committed to return with additional documentation — including investment policy details, statutory citations and comparisons to other funds — and the board directed staff to draft a written safeguard requiring board action before any withdrawals not directly tied to the trust purpose.