Board Urged to Stop Paying Retiree Bonuses : County: Supervisors recommend a policy change that would direct excess earnings from the investment portfolio to the general fund.

Ventura County supervisors Tuesday recommended that the county’s retirement board stop giving away surplus dollars in bonuses to retirees and instead direct all future surplus earnings from its $900-million investment portfolio to the county general fund.

The board voted 4 to 1 to recommend the policy change, which drew protests from some county retirees. Supervisor Susan Lacey abstained, saying she did not have enough information to cast a vote.

The board’s action came just weeks after learning that the county would have to pay an additional $5.8 million into the pension system this year because of low returns on investment bonds.

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Supervisors John Flynn and Frank Schillo proposed the policy change to protect the county from future losses. They said the county never should have paid bonuses to retirees because there was no guarantee that the high investment returns from recent years would last.

Between 1990 and 1994 alone, county retirees received $20.4 million beyond their guaranteed pensions. No bonuses were paid last spring because returns dropped.

“It just does not seem like a prudent way to operate a retirement system,” said Schillo, a financial consultant who administers pension programs for small companies and who represents the supervisors on the retirement board.

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County Treasurer-Tax Collector Harold S. Pittman, who oversees the retirement program, agreed that the county should not pay out any bonuses at least until it has paid in full the $207-million funding shortfall in its pension program. Officials estimate that it will take about 14 years to eliminate the shortfall.

Once that is done, they said it is possible that the county could consider again paying retiree bonuses.

The county began paying bonuses to retirees in 1977. By 1994, 2,100 people were receiving supplemental payments that ranged from $35 to $70 a month, depending on length of service. In 1983 and 1990, two other bonus plans were created that paid some retirees an additional $10 to $210 each month.

The bonuses were discontinued last year, over the objections of the 1,800-member Ventura County Retirees Assn.

Ann Michalski, an association representative, said the bonuses that had been paid to retirees were to correct inequities in the pension system, which provides recent retirees higher pension checks and more benefits.

Moreover, Michalski said the county was to blame for some of its increased liability. She noted out how the supervisors decided in 1991 to increase the county’s contribution to the retirement fund by another $9.6 million in lieu of pay raises for employees.

Pittman agreed, “we did a little of this to ourselves.” But he insisted that in the future the county cannot be expected to shoulder all of the financial losses from poor investment returns.

“I can’t imagine going to Las Vegas and gambling and having the casinos say, ‘Well, if you win you get to keep it. And if you lose, we’ll cover it for you,”’ Pittman said. “It doesn’t work that way. Fair is fair.”