By Joshua Molina, Noozhawk Staff Writer 

The Santa Barbara County Employee Retirement System’s pension fund has taken a significant financial hit as a result of the devastating financial impacts of the coronavirus. 

The investment portfolio lost about 13 percent of its value between Jan. 31 and March 16, dropping from about $3.3 billion to about $2.87 billion. The losses are about 10 percent going back to the beginning of the fiscal year on July 1, 2019. 

“Just like everybody else in the country right now, there is a significant impact to the value of our investments,” said Greg Levin, chief executive officer for the Santa Barbara County Employees Retirement System. “A lot of it depends on what is going to happen in the next six months.”

Levin said the county’s retirement system is in good shape despite the steep decline in the investment market in recent weeks. In order to pay the current benefit load, the retirement system must draw about $30 million annually, and there’s about $2.87 billion in the plan. 

“There’s nothing that I am worried about right now in terms of taking care of my members and beneficiaries,” Levin said. 

Levin said the value of the retirement fund only reflects about 60 percent of the funds that were immediately available as of March 16, and the full amount of losses won’t be known until later in April. 

“I don’t think anyone can predict what can happen in the financial markets,” Levin said.

Despite the unpredictability, Levin explained that the county learned a lot from the 2008 recession and diversified its investments. The county expects a 7 percent annual return. 

“We tried to create a portfolio that is able to withstand a more specific downturn,” he said. 

County Executive Officer Mona Miyasato also planned during last year’s budget cycle for an economic recession within the next three years.

Levin said any losses will be amortized over the next 20 years and the county will absorb and pay it. 

“We let it work and do its thing over time,” Levin said. 

Steve Lavagnino, Fifth District Santa Barbara County supervisor, has been a vocal critic of the pension fund and its investment strategy, but said he has confidence in how the retirement system is handling investments. 

“I think that the fact that we have only lost 13 percent is a testament of how well we do things,” Lavagnino said. 

Lavagnino said “we’re in it for the long haul” with the pension fund. 

“We are going to have a bad year this year,” Lavagnino said. “We have had a couple of good years. The economy was strong before all this happened and if we are lucky we’ll get a bounce back. It is a long game.”

The county isn’t making investment decisions, he said, based on the next six months. Investment always involves risk, he added. 

“Sometimes when you expose yourself to risk you are going to get caught but everyone is in the same boat,” Lavagnino said. “I am very confident that the pension fund will be able to stay solid.”

Gregg Hart, chair of the Board of Supervisors, said the county built in a long-range fiscal model that assumed an economic downtown. 

“The economy is suffering from a significant shock and our retirement system has also taken a hit,” Hart said. “But because we have diversified our portfolio and learned lessons from the last economic downtown, this downturn’s effect is much less than what other systems may be experiencing right now.

“The full financial hit will be felt over time and that will give us an opportunity to adjust our budget to accommodate,” Hart said.

The city of Santa Barbara was less specific about its losses. City Administrator Paul Casey said the city will get an update April 8.

“We don’t have any numbers from CalPers on what the impact will be or how they will address it long term,” Casey said.

— Noozhawk staff writer Joshua Molina can be reached at jmolina@noozhawk.com.