Elected official pensions: target for reform?

Stockton has enrolled three mayors and 14 city council members in CalPERS since 1991, despite a provision in the city charter that clearly states no council member shall receive retirement or death benefits, the Stockton Record reported last week.

The discovery of $276,954 in unlawful city pension contributions comes as Stockton is in the national media spotlight during a last-ditch attempt to avoid bankruptcy, mainly by getting unions to agree to cuts in retirement and other costs.

It’s the latest quirk in the hodge-podge of laws and practices, drawing the attention of a legislative committee, that gives some elected officials pensions, prohibits pensions for other elected officials and allows some to choose no pension.

Elected official pensions are “under consideration” and “may be included” in the proposal made by a two-house legislative committee on pension reform, a co-chair, Sen. Gloria Negrete-McLeod, D-Chino, said at a hearing in her district this month.

The nonpartisan Legislative Analyst’s Office told the hearing that the Legislature has attempted to regulate pensions for elected officials in the past, but has not been completely successful.

A bill two decades ago (AB 3664 in 1994) said that members of all local legislative bodies should not receive pension benefits greater than the “most generous” pensions for non-safety employees.

In San Diego, city council members are eligible after four years of service for a “3.5 at 55” pension (3.5 percent of final pay for each year served at age 55), well above the “2 or 2.5 at 55” formulas for most city workers.

Some council members decline to enroll in the pension plan. The council pensions have been mentioned in the debate over an initiative on the June ballot in San Diego that would switch new city employees to a 401(k)-style individual investment plan.

San Diego operates under its own charter, rather than state general law, and has its own pension system, which was plunged deeply into debt by two agreements between the city and unions that lowered city contributions and raised pension benefits.

A legislative committee analysis of the two decade-old bill raised the question of whether the legislation would apply to charter cities, currently 120 of the 482 cities in California.

“It’s possible that is the reason San Diego doesn’t appear to be in compliance,” Jason Sisney of the Legislative Analyst’s Office told the hearing. “That law has never been litigated as best we can determine in talking to the Legislative Counsel.”

Another two decade-old bill (SB 53 in 1993) made some types of elected or appointed officials, such as board members of school districts and special districts, ineligible for pensions through the California Public Employees Retirement System.

“There are a few cases where water districts have figured out a way around that law,” said Sisney. “I think they have the right to do it under the law. But I am not sure that is what the Legislature intended back in ‘93.”

The analyst said at least two water districts contract with CalPERS for pensions for employees and provide pensions for elected board members through the Public Agency Retirement Services, a trust governed by a board of public agency employers.

Last week the Water Replenishment District of Southern California confirmed that its pensions are through PERS for employees and PARS for board members. The West Basin Municipal Water District did not return several calls.

Part of the rationale for prohibiting CalPERS pensions was that even if providing minimal service and receiving only meeting expenses, board members could get full credit for lifetime pensions.

Some elected officials serve full-time and others do not. The analyst said state controller’s data shows that more than half of all California cities, 252, provide pensions for council members. Most of the counties, 51 of 58, provide pensions for supervisors.

In San Jose, where worker pension costs are soaring, the city council voted in January to end CalPERS pensions for council members. A widely watched June ballot measure would cut pensions earned by current San Jose city workers in the future.

San Jose council members receive a salary of about $80,000 a year and are limited to two four-year terms. Councilman Pete Constant said the council pensions, authorized in 1998, already have a debt or “unfunded liability” of more than $400,000.

Last week a bill prohibiting public pensions for part-time elected and appointed local officials (AB 2429) was among several bills that an Assembly committee sent to “interim hearing” because the subject is being considered by the two-house committee.

Marcia Fritz, president of a pension reform group, told the committee the Citrus Heights city council, receiving $600 a month, voted to give council members a retroactive pension.

She said that when a council member moved to a commission job paying $100,000 a year, the retroactive credit for 13 years of part-time service on the Citrus Heights council added about $45,000 a year to his pension.

Another bill sent to interim hearing last week (AB 1874) would close the Legislators Retirement System to new members. An initiative that imposed term limits on legislators, Proposition 140 in 1990, prohibits public pensions for new legislators.

Still eligible for the LRS: the state constitutional officers (governor, lieutenant governor, secretary of state, attorney general, treasurer, controller, superintendent of public instruction), the insurance commissioner, four elected state Board of Equalization members and four top legislative staff members.

With shrinking enrollment, the LRS is a rare public pension system that has been “superfunded” in recent years, requiring no annual contributions from employers or employees.

During fiscal 2009-10, payments to 266 retirees totaled $7.9 million, an average of $29,535. The pension formula is generous, based on 5 percent or more of final pay for legislators and constitutional officers and 3 percent for legislative staff.

But pension payments are capped at 60 to 60 percent of pay. If they pay any additional costs, LRS members can switch while in office to CalPERS, where the main state worker plan has been uncapped.

State Treasurer Bill Lockyer, a former state attorney general and legislator, is an active CalPERS member. One of the most famous former legislators, longtime Assembly Speaker Willie Brown, is a CalPERS retiree receiving a monthly pension of $6,491.

A list of 264 LRS pension recipients in January was topped by Jack O’Connell, a former superintendent of public instruction and legislator, at $95,921 a year. Next was former Gov. George Deukmejian at $94,201.

A dozen current members of Congress receive LRS pensions: John Garamendi $80,442, Dan Lungren $56,709, Jim Costa $7,233, Jackie Speier $6,060, Tom McClintock $6,016, Maxine Waters $5,720, Howard Berman $5,712, Sam Farr $4,989, Jerry Lewis $4,539, Lucille Roybal-Allard $2,285, Wallie Herger $1,951 and Howard Berman $1,827.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at http://calpensions.com/ Posted 30 Apr 12

11 Responses to “Elected official pensions: target for reform?”

  1. Ted Steele, Leader of the Internet Says:

    Posters— Please wake up earlier and get on these important posts with your thoughtful comments!! I can’t continue to carry this blog all by myself. — Ted

  2. gery katona Says:

    This is yet more ammunition for reform. It seems part of being elected means you do not have to be accountable for your actions and brings out the worst out in people. I’m in San Diego and their case is unfortunately typical as far as shunning accountability, corrunption, and acting in a self-serving manner. The unions were pressing the city because they were not making contributions to the pension fund, seems reasonable even if the benefits were excessive. So they reached an agreement to boost pensions in lieu of the payments! Can you believe that? And it was done twice! Shouldn’t everyone that was involved have been jailed for abuse of the taxpayers? Astonishing.

  3. stevefromsacto Says:

    Gery takes a story about ELECTED OFFICIALS abusing pensions in Stockton and turns it into a screed against public employees.

    The anti-public service crowd will only be happy when public employees lose their benefits altogether, and then they’ll bitch because it wasn’t done sooner.

  4. spension Says:

    Willie Brown sure has a small pension for 28 years of service in the Assembly.

  5. Paul McIntosh (@CSACED) Says:

    This story is simply about the city of Stockton not paying attention to their charter and violating the law. Nothing more nothing less. No reason to paint all elected officials with this brush just because Stockton officials can’t read.

  6. GOPRita Says:

    I live in Stockton and this outrages me. Why should a short-term part-time public SERVANT receive any retirement benefits from their service? They are suppose to serve their community not pad their retirement pockets.

  7. Tough Love Says:

    Quoting …”Marcia Fritz, president of a pension reform group, told the committee the Citrus Heights city council, receiving $600 a month, voted to give council members a retroactive pension.
    She said that when a council member moved to a commission job paying $100,000 a year, the retroactive credit for 13 years of part-time service on the Citrus Heights council added about $45,000 a year to his pension.”

    If the Council vote to grant the retroactive pension and Council member’s move to the $100K job were close in time, clearly there is a case to challenge the legality of this …. and quite possibly a criminal conspiracy charge if the Council member making the move voted for it.

  8. Foofey Says:

    I need to add a few comments. I’m afraid I am bitter and disgusted with California government as it exists and operates. I was in a position with the State to see alot of ugly stuff that the public doesn’t. I worked for more than a couple of departments and know plenty of abuse exists – predominantly in management.

    I was a State employee for 35 years in Human Resources and my pension benefit is $2000 a month! After taxes I have less than $1700 a month to live on. Since I lost my house when Schwarzenegger furloughed the State employees, I retired with no savings, no house, no credit – I am disgusted at the disregard and lack of compassion shown to the State employees by the elected officials.
    .
    My rent is $1600 a month so I have to work to eat.
    The fact that some CLOWN – one of the group that made the decisions that got Caliornia into this horrible fiscal mess – can walk away after 2-4 years service with enough pension money to live well pisses me off. Some of those examples get more per month than I get all year! No wonder we need pension reform.
    I paid into PERS every month of my career. I paid my taxes every year. Before the furloughs I had perfect credit for 15+ years – as a single mom. Now – I cannot get a car loan for less than 12%. I cannot get any credit. I tried to save my house with my savings – to try and wait out the furloughs – but the State employees didn’t get any income back at the end of furloughs. So I lost everything I had worked for my entire career – because I stuck with my job. I am 60 years old and have nothing left. In essence I get to start over – a grim, hopeless prospect at my age.
    I have progressve heart disease (surgery and heart stent) and the mechanizations of trying to ‘make it’ financially got to be so stressful I felt compelled to retire and find part time work. I had been commuting 2 hours per day, and since we were not allowed overtime – but still required to put out more work to process furloughs – I was taking work home, staying late, and not allowed to claim overtime pay for it. This meant that frequently I was putting in 10-12 hour days for no overime pay. This was a terrble, and exhausting strain – but necessary to get the job done.
    Then gas prices went up and I just couldn’t squeeze my pennies anymore. If you don’t have the money – you don’t have the money.
    Of course – this does not line up with California’s fiscal policy of cutting from the bottom line, and using credit. Consistently the State has spent more money than it has – and calls it a sound policy that they have repeated over and over for many years. Have we forgotten the countless late budgets, and compromises made to bring the budget in? Isn’ it ‘good cause’ to leave a job that costs more than you earn? To slowly spiral down into debt is a better policy? Clearly the State thinks it’s a good policy – they do it all the time. I don’t operate my budget that way – and never have.
    I was denied unemployment benefits because the State doesn’t think heart disease and the need to make adjustments to decrease the stress factor was “good cause”. EDD concluded that I have an “adversarial relationship with my employer” (i.e. State – Vets Affairs at Yountville) per the EXPRESSION ON MY FACE during my hearing at EDD. This is the conclusion in writing on my hearing disposition, and prevailed over all other documentation/statements provided to them. It took them 8 months to get to that conclusion – which is a ridiculous amount of time to wait when you’re starving. How is it that they remembered the expression on my face and made conclusions based on that alone after so much time had passed? Another broken department! Thank God for food banks. I’d sue the State if I could afford a lawyer.

    It appears as though losing your home (thru no fault of your own), losing an adequate income (thru no fault of your own), compromising your health, and going into debt to afford a commute is not enough for the State to recognize and admit the damage inflicted on the innocent taxpayers and employees of this State. Do not forget that the State employees are tax payers too – so they get a double hit. Their income goes down, and their taxes go up – again.
    Personally, I have not heard of even ONE elected official losing their home to foreclosure. Or any bank personnel. That is not only unfair – it seems very suspicious. Is anyone else curious about this?
    OK. I’m done – for now.

  9. Foofey Says:

    I apologize. I didn’t mean to go off on my favorite bitch and kind of get off subject. Sorry.

  10. bill Says:

    living in Florida our formula for state employess is 1.6 times years worked based on your 5 highest years of salary. so many teachers walk away with about 30,000 a year but special risk and elected get A LOT more it is a rigged system

  11. Richard Says:

    We hear so much about cutting back on expensive entitlement programs, why don’t we begin with the pensions of the spouses of our elected officials in Congress and the Senate. Their spouses don’t work for us, so why should they receive pensions in addition to their elected partners? Where in the world do you get a pension for life even if you only work for one term, either four or six years. Let them set the example and remove what they don’t contribute to.

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