Not all California cities are struggling to overcome the unfunded liabilities in pension funds. Some don’t even have to worry about those liabilities at all. Three cities in Contra Costa County have never offered its employees a defined contribution plan. Instead, employees in the cities of Lafayette and Orinda, as well as the Town of Danville, have always been enrolled in a 401(K) style plan.

The municipalities started off too small to support the defined-contribution plans and typically used mostly outsourced services. However, as they grew – Danville now has more than 40,000 residents – they continued to only offer the 401(K)’s.

In fact, these towns break the mold in more ways than just their pensions. Layafette, for example, has been able to maintain its fiscal solvency and protect its reserve fund – which equals about a year’s worth of expenses.

From the California

While most of the state’s roughly 480 cities and towns are entangled in a heated debate about future pension costs, three small cities in Contra Costa County are quietly sitting on the sidelines.

Most public employees in California receive a defined-benefits pension, which guarantees an employee a specific monthly payment upon retirement.

But the town of Danville and the cities of Lafayette and Orinda don’t offer one.

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