From the Capitol Weekly:
The San Ramon fire chief, Craig Bowen, had a final salary of about $221,000, but he retired last December at age 51 with an annual pension of $284,000.
The Moraga Orinda fire chief, Peter Nowicki, had a final salary of $185,000, but he retired in January at age 50 with an annual pension of $241,000. [...]
Public employee pensions are often based on the highest annual total pay received on the job. A variety of ways can be used to "spike" pay shortly before retirement, thus boosting lifelong pensions that increase annually with inflation.
And remember: These pension funds not only bust budgets in 2009 (what with California spending more than 22 times the amount on pensions this year than it did less than a decade ago in nominal terms), but the obligations going forward make state budgeting an exercise in fantasia and/or entire Red Seas of deficit. There will never be enough money to pay that out. And as Jon Entine reminds us in his February cover story, those massive funds themselves have been losing money hand over fist due to unwise and politically motivated investments.
Well, at least the new head of California's pension fund is an experienced investment hand who wants to take the gambling out of the pension-obligation business! Oh wait:
Joseph A. Dear....is not an investment seer by training, but he thinks he has the cure for what ails Calpers, or the California Public Employees' Retirement System, the largest in the nation with $180 billion in assets.
Mr. Dear wants to embrace some potentially high-risk investments in hopes of higher returns. He aims to pour billions more into beaten-down private equity and hedge funds. Junk bonds and California real estate also ride high on his list. And then there are timber, commodities and infrastructure.
That's right, he wants to load up on many of the very assets that have been responsible for the fund's recent plunge. Calpers's real estate portfolio has tumbled 35 percent, and its private equity holdings are down 31 percent. [...]
He was hired in large part for his management skills and political savvy — honed in Washington, where headed the Occupational Safety and Health Administration in the Clinton years. He does not have an M.B.A. or any other advanced degree in finance. Harvard, Yale or Wharton is not on his résumé. Instead, his lone degree, in political economy, is from Evergreen State College in Olympia, Wash.