Del Norte supervisors approve Section 115 trust with PARS to prefund pension and OPEB liabilities

The Del Norte County Board of Supervisors voted unanimously Jan. 14 to establish a Section 115 combination trust and to enter an administrative‑services agreement with Public Agency Retirement Services (PARS) to prefund pension and other post‑employment benefits.

The action, item 21 on the agenda, creates a county trust administered by PARS, appoints the county administrative officer as plan administrator, and directs staff to work with PARS while the proactive financial management technical advisory committee will monitor investment strategy. Supervisor Short made the motion; the board approved the measure 5-0.

County leaders said the trust is intended to provide greater investment flexibility and potentially higher returns than the county’s current holdings invested through CalPERS, reducing the need for the county or employees to shoulder increased costs when statewide returns lag. "What is in front of the board and the county today is once again the, what we call our combo trust, which is an opportunity to pre fund both your pension and your post employment benefit obligations for your people," said Matt Spooner, representing Public Agency Retirement Services.

The board heard detailed public comment and questions from residents asking for a fuller public presentation before any funds move. One commenter urged the board to "table this until we get a complete presentation," saying the change could affect employees' retirements. County staff and PARS representatives repeatedly said establishing the trust does not remove Del Norte County employees from CalPERS’ defined‑benefit plans; rather, the trust is a separate prefunding vehicle.

"We are not asking the board to approve moving out of CalPERS pension plans," said Neil Lopez, county staff, during the discussion, adding that the trust would be a funding mechanism rather than a replacement for CalPERS. PARS staff described the trust as both more flexible and liquid than some other options: "One of the ways that we like to talk about our trust is that it is like a savings account on steroids," Spooner said.

Clarifying details presented to the board included: - The county has roughly $1,000,000 in existing trust assets that could be transferred from the CalPERS‑administered account to the new PARS trust; the exact amount will be verified before any transfer. (County staff said the most recent statement showed a little over $1,000,000.) - PARS fees are charged on a sliding scale based on assets under management; PARS representatives said fees accrue only after the trust is funded. - The trust is liquid and can be tapped in emergencies, but staff said agencies that withdraw funds should plan to reimburse the trust to maintain the prefunding benefit. - The board designated the proactive financial management technical advisory committee to oversee investment strategy and appointed the county administrative officer as plan administrator.

Several residents asked for published performance metrics and a full presentation on fees and investments before any funds are moved. PARS representatives offered to return for a deeper public presentation and said historical performance data comparing PARS to CalPERS could be provided to the county and posted for public review.

The board approved the resolution and administrative services agreement 5-0. Neil Lopez said the next step will be to bring back the item required to complete a trustee‑to‑trustee transfer if the board wants to move the CalPERS assets into the PARS trust; that transfer was not taken at the Jan. 14 meeting.