By Cari Hachmann
As part of its 2020 fiscal year budget approval, the Transportation Corridor Agencies’ Boards of Directors of the Foothill/Eastern Transportation Corridor Agency (F/ETCA) and San Joaquin Hills Transportation Corridor Agency (SJHTCA) voted to pay off the TCA’s unfunded pension liability with the Orange County Employees Retirement System (OCERS) on July 1 of this year.
TCA is the government agency overseeing operations of California’s largest network of toll roads: State Routes 73, 133, 241 and 261.
TCA’s unfunded actuarial accrued liability (UAAL) currently stands at $12.8 million, according to a June 13 press release from the TCA. Director Joe Muller, chair of TCA’s Joint Finance & Investment Committee and Dana Point mayor, explained that by paying that amount off now, TCA can lower its employer contribution rate by almost half of the 24 percent of salaries that it is currently obligated to pay.
“Paying off the unfunded pension liability allows TCA to realize a present value savings of approximately $2 million based on the interest we pay to OCERS, compared to the interest we earn on our cash,” said Amy Potter, Chief Financial Officer for TCA.
Muller contrasted TCA’s action with the growing number of Orange County cities resorting to tax increases to cope with rising unfunded pension liability costs that consume expanding percentages of their budgets.