If public service truly is a sacrifice, then join me in shedding a tear for the 20,900 public workers in California who pulled down more than $100,000 in retirement benefits during 2015.
Thanks to Transparent California, a project of the Nevada Policy Research Group, you can now check out the retirement benefits for the more than 625,000 people who drew a pension last year from the California Public Employees Retirement System, or CalPERS.
Leading the way for 2015 was Michael Johnson. The former Solano County administrator received a $388,407 pension last year. There are some payouts for 2015 that exceeded Johnson's because they included one-time settlements, but Transparent California considers his pension to be the richest in the state because it's the highest annual payment.
Rounding out the top three are Stephen Maguin, a former Los Angeles County Sanitation District general manager who pulled down $340,811 in 2015 and Joaquin Fuster, a former UCLA professor who got a pension worth $338,412 last year.
Here's a few stray observations about the list of beneficiaries published by Transparent California (download the full list here):
- More than 23,000 workers in the CalPERS system retired in 2015 and started collecting pension checks. Of those, there are 76 getting six-figures per year. David Breninger, who previously worked for the Placer County Water Agency, leads the way with an annual payout of $190,904. Jeffrey Kolin, former city manager in Beverly Hills, wasn't far behind with an annual payout of $182,621. [UPDATE: Robert Fellner, reasech director for Transparent California, points out that there were actually 853 people who retired in 2015 with annual pensions of $100,000 or more. Here's why, according to Fellner: "When analyzing the number of $100k pension for only those who retired in 2015, its important to remember that because the values reported are the actual amount paid during the 2015 year, all of those amounts will be fractions of the actual pension. So, for example, if someone retired in June 2015, their 2015 payout on our website is only half of their actual pension."]
- The longest-retired employee in the system is Curtis Bowden, a former member of the California Highway Patrol. He retired all the way back in 1947, which means he's been collecting pension checks for 68 years, after working just 5.3 years for the state. He got $24,800 from CalPERS in 2015.
This is not meant to besmirch the work Johnson, Maguin, Fuster and their colleagues have done. Some public workers might be so invaluable that it makes sense to pay them six-figures to administrate counties, make sure trash gets collected or teach neuroscience.
Still, those big pensions are part of the systemic problems with CalPERS.
The pension fund is more than $139 billion in the red and just reported another awful year of investment returns. The East Bay Times reported last week that CalPERS' retirement debt "averages out to $11,000 for every California household which is relevant because taxpayers, not government workers, must make up the shortfall."
None of that matters for the workers who are getting these guaranteed payouts. That's because of how public sector pension systems like CalPERS work. Unlike your 401(k) that might increase or decrease in value with the stock market, public sector pension benefits are locked in place. If investment returns fall, the retirees' benefits aren't at risk because taxpayers are obligated to make up the difference.
Most state pension funds are deep in debt, but CalPERS is among the worst in the nation. Things are only getting worse, since the fund reported in July that it had achieved just a 0.61 percent rate of return in the past 12 months. The system is based on the assumption—a bad one, according to people who study this sort of thing, like the Society of Actuaries—that it will earn 7.5 percent every year. Anything less than that only adds to what taxpayers already owe in the form of future pension promises.
Last year's poor returns weren't an aberration. CalPERS' average earnings haven't met the current 7.5 percent average annual return target over the last three, five, 10, 15 or 20 years, the East Bay Times reported.