California's Six Figure Pension Club Has More Than 20,000 Members

Former county administrator made $340K in 2015, as CalPERS taxpayer-backed debt climbed to $139 billion.

Ingram Publishing/Newscom

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.

Comments

[Lee Genes]

Headed straight for bankruptcy and a federal bailout. Math wins, every time. Taxpayers lose, every time.

[Fist of Etiquette]

California taxpayers did, as a group, choose this.

[Grand Moff Serious Man]

Pretty sure a substantial number of California voters don't actually pay taxes, or at least not at a level to where they'll be fucked over by this.

[Rich]

Oh, they'll eventually be "fucked over".

Then the fun *really* begins.

[Rational Exuberance]

Oh, they'll eventually be "fucked over".

How? If you don't own property in California and don't pay a lot of taxes, how is this going to affect them? The only people really getting stuck with the bill are property owners in California, business owners in California, and (possibly) federal tax payers called upon to bail out California.

[Fist of Etiquette]

That money has to come from somewhere, and eventually California will draw it from something these people do care about. At that time, to them, it will feel like getting fucked over.

[Rhywun]

Renters pay the owners' property tax increases in the form of higher rents. The only people who won't be screwed as much as those who pay no income taxes - the 47%? - but they will get screwed as every other tax and fee goes up.

[Rhywun]

"are" those who pay no income taxes

[Bra Ket]

They'd be victims of the roving motorcycle gangs and mutants after the system collapses.

[ATXChappy]

Oh, they'll eventually be "fucked over".

Some will. But, the ones that are actually able to afford all those new taxes will be ready, willing, and able to move somewhere else.

[Bra Ket]

California taxpayers are generally idiots, but also not really part of the equation here. The pension system is a kickback to public employees in return for their unions' support during elections. Give them money or they will spend tons on ads opposing you.

[Rational Exuberance]

Probably only about half of Californians pay taxes. Voter participation rate is about 25%. And although Democrats mostly win, still nearly half the votes go to Republicans. If you put that all together, it's a good bet that maybe only 10% of California tax payers actually even supported the representatives that put these laws into place, and of those 10%, most probably don't support these kinds of salaries or pensions.

[Curtisls701]

Fairly accurate. I've lived here for 22 years, and I've never been on the winning side of an election.

[jbsnc]

Yes they have after being mislead, ill informed and lied to by the MSM and high ranking Communist/Socialist office holders and richly paid government employees. Never be fair, its about power, money and feeling good. Do the voters understand the more than $100 trillion in unfunded liabilities that continues to grow because in part politicians often hold their re:election as more important than honesty and the tax payer? Do you agree? Yes or No.

[tommhan]

There are a lot of conservatives in California that did not vote for the left. It is the huge urban areas that have the population that overcomes those with common sense.

[RebeccaAdams]

I'm making $96 an hour working from home. I was shocked when my neighbour told me she was averaging $120 but I see how it works now. I feel so much freedom now that I'm my own boss.
Just working on the internet for a few hours.
This is what I do.------------------- http://bit.do/GvGO0

[Libertarian]

"Former county administrator made $340K in 2015"

Can't we all just hear it now? Maybe in 5 years, maybe 10, how ever long the inevitable California bankruptcy takes, the future governor at the time will say, "no one could have predicted this."

[Als? als? wik]

I always look at these things from the perspective of an individual filer. Imagine the techie or entrepeneur who's managed to get himself to a $300K salary, and shells out maybe $30K in state income taxes alone. Doesn't that guy feel good knowing it's all for just 1/10th of the pension of some hack living in luxury?

[MyNewsLogin]

Of course, that theoretical person does not:
* drive on the roads
* have children attending school and did not attend school himself
* eat food from any place inspected by a public employee
* call the police
* call the fire department
* expect the police to patrol his neighborhood
* breathe the air

[Johnathan Swift Jr.]

The fact that public employees are necessary does not mean that the state can afford to make unrealistic promises to them for retirement. There are simply far too many of them, so when pensions are roughly twice what would be reasonable, the cost to the state is too high. The fact that the state is far behind in what it needs to have to pay them all is clear evidence that the pensions are unaffordable.

The tacit agreement between the public and their employees was that while the were paid substansially less than private industry (excluding small business where salaries are often dismal), there jobs were generally not too hard, job security was great and you had a reasonable pension at the end. Now, in many cases, their salaries often soar well past those of people doing the same sorts of jobs in private industry and they have pensions with guarantees than no one in the corporate world has.

I know people locally that are low level paper pushers who are making $70,00 a year, twice what I would have paid someone in small business. They can retire after thirty years at 70%. Rank and file CHP officers have a top step salary of $92,000 a year. So, after thirty years they will retire on $88,000 a year. An officer starts at $75k a year now. A retirement of 50% of someone's top basic salary should be more than enough and the whole thing should be capped at $150k or something regardless.

[Captkarma]

I think law enforcement, including prison guards, can fully retire at 50 years old.

[Rich]

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.

Or to solve the CalPERS pension crisis, right? RIGHT?!

[Swiss Servator]

Actuarying is hard!

[Johnathan Swift Jr.]

They actually had a good actuary I believe, they just paid no attention to what he said. He warned them for years that they are far, far too dependent on upper income taxpayers whose incomes are much more volatile, so that a massive hole appears in the budget every time the economy goes south. Math is easy, but governing, especially when you are in the pocket of the public employees (who should never been allowed to unionize...thanks Jerry).

[creech]

I understand how cops game pension systems to get a ton of overtime or unused sick time paid in their last few years before retirement, but how does a salary-based county administrator get $340K? What the heck was his highest salary while he was working? One would think taxpayers would demand pensions be capped at something like 50% of final base pay, instead of the nonsense one sees in California and other states. But then, I guess, building walls and transgender bathrooms are more important issues.

[JWatts]

All state employees tend to have the same metric. It's quite possible that the administrator also used accrued over time and sick time to boost his last years earnings through the roof.

"One would think taxpayers would demand pensions be capped at something like 50% of final base pay, instead of the nonsense one sees in California and other states."

Tax payers don't make these rules. Democratic legislators are highly paid by the Unions to make these rules. In the most Union friendly rules possible.

It's notable that under the alternate Census metric, California has the highest poverty rate in the nation. It's becoming a two tier state with extreme wealth and extreme poverty. Meanwhile, the public sector is milking the government in Greek fashion. It will all end badly.

[RaymondhW]

50% wouldn't really let people retire. Well maybe he 340k types could but most workers in calpers are lucky to gross 50k in a year. If you are going to have a pension system it would need to be over 50%. Or if you put a cap, put it in maximum annual payment. Really they just need to tank the pension system. A glorified 401k is what it needs to change to. Or just pay them enough that they are expected to act like adults and plan their own retirement.

[robc]

Defined contribution is the future for everyone.

Then things like projected growth rates dont matter.

[creech]

Oh really? Don't they get s.s. too? When I started out in private industry, it was the standard mantra that you would get 1/3 of your retirement income from the company pension, 1/3 from s.s., and 1/3 you were expected to save on your own. I even remember company pension plans that factored in your s.s. payments in determining your company pension check. Then along came 401Ks and made it even easier to save the 1/3 you needed to put up.

[Pay up, Palin's Buttplug!]

but how does a salary-based county administrator get $340K?

It depends upon when the person retired. CalPERS changed the system a few years ago, so it's hard to game the system in the same way in the past.

Back then, people would accept promotions or take second jobs for the last few years before they retired to boost their income for CalPERS pension calculations.

[Pay up, Palin's Buttplug!]

From Service & Disability Retirement:

You can retire as early as age 50 with five years of service credit unless all service was earned on or after January 1, 2013. Then you must be at least age 52 to retire.

[Johnathan Swift Jr.]

The CHP can only found basic salary, overtime is not part of their equation.

It is overtime or sick time that is often used to game the system. You keep a lot of sick time, they cash it out your last year, boosting your salary by tens of thousands of dollars, sometimes even $50,000 a year, which at 70% or 90%, depending on whether you are a paper pusher or a public safety employee, means $35,000 to $45,000 a year for life. They can game the system and end up with a total of a million dollars more by gaming the system.

There is a legendary librarian in San Diego who pulls in $234,000 a year in pension and a former city attorney who puls in 307,000 a year. Nice work if you can get it.

[kV]

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.

Fuck these constant apologetic qualifiers. Is Reason trying to get Hit & Run picked up for syndication?

[Swiss Servator]

I think that was thinly veiled sarcasm...

[Rich]

"I can not praise their work too highly."

[Rufus The Monocled]

"If investment returns fall, the retirees' benefits aren't at risk because taxpayers are obligated to make up the difference."

Naturally.

Such bull shit. They're an over protected class. Everyone else doesn't have that kind of privilege. So much for 'fairness', eh?

[Rhywun]

What are they going to do, vote not-Democrat?

Ha ha ha ha ha ha ha ha ha ha ha ha...

[retiredfire]

You mean like the "everyone else" who gets their defined benefit plan (Social Security) despite the fact that NONE of it is placed into any kind of investment?
At least, with all the other defined benefit plans, a good part of the money is investment returns on employees and employers contributions. CALPERS investment portfolio is in the billions.
With SS, it is totally taxpayers who pick up the difference between what we all put in and what gets paid out.
Was anyone critical of these pensions, also on board with GWB's plan to partially privatize SS? Because that's what making these employees go to 401k's is slightly analogous to?

[Lord Humungus]

California - the future of America

[Swiss Servator]

HA! Then that makes Illinois the absolute bleeding edge!

[Rhywun]

Yeah. Hate to break it to TX and LA but you can't hide there for long. You're getting it good eventually.

[JWatts]

"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."

I don't think it's unusual or negative for high ranking government employees to be making +$100,000 per year. But they should be paying for their own retirement!

[retiredfire]

"But they should be paying for their own retirement!"
They are.
These pensions are all part of the salary/benefit package that is the employment contract. The employers pay part, the employee pays part and investments cover the rest.
What the complaints about "unfunded" liabilities are, is because the politicians haven't put their promised share into the pension fund, so that they can go buy votes with it.
The recipients bear none of the blame, unless you think they should just say: "Oh well, you don't have to pay me what you promised". Would anyone, here, do that?

[JWatts]

"he system is based on the assumption?a bad one, .... 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"

It's not an assumption, it's a fig leaf designed to carry the narrative down the road a few more years until the inevitable tax payer bailout.

[Rational Exuberance]

It's not just a "fig leaf". You can bet that a lot of CalPERS investment decisions aren't just driven by maximizing returns, but by political and personal motives.

[dantheserene]

Yeah, divesting from South Africa because of apartheid (or any other flavor of the day) is probably a lot more important than maximizing return since the whole thing is political anyway.

[Johnathan Swift Jr.]

The amusing thing is that before the nation forced everything into the Big Wall Street Casino, they could have stuck the money in a bank and gotten pretty close to the returns they wanted. Years ago people saved in banks, then that money was loaned to young people to buy a house or open a business, so they got a nice rate of return. That, however made too much sense, for Wall Street could not have an alternative where people could come close to the same returns with virtually no risk. There would never be all the Plutocrat class money to use to pay off politicians to keep the favors coming.

[Grand Moff Serious Man]

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.

All things no private entity could ever conceive of doing.

[Doctor Whom]

Whenever government does anything, the fact that it does so is conclusive evidence that the private sector never ever ever could, ever. This is what many people actually believe.

[sarcasmic]

It's not so much that as that if the private sector does it then someone will make profits. Profiting from basic human needs is immoral. So what if the private sector could do a better job for less money. They'd be making profits. That leads to inequality and other evils. Better to have these things done by an incompetent and inefficient government, because at least no profits go to rich people.

[Rational Exuberance]

Private entities do this all the time. But they pay for it with their own money.

[Rhywun]

The true nature of pubsec work:

When it comes to government, if you aren't involved in the provision of actual public goods, you are involved in extortion. It may be legal. It may have the blessing of the mayor, the city council, and your union representative, but it's still extortion. And you should be ashamed of yourself. If your only purpose is getting in the way until somebody hands you money, then you are part of a protection racket. And you might want to think about going into a more honorable line of work.

[Johnathan Swift Jr.]

Which in many cities is who does it. Many cities order out for many of these services, so one has to wonder where all the money goes.

[ThomasD]

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.

How old is this guy? And has anyone verified he is still alive.

Assuming he 'retired' at the ripe old age of 32 that would make him 100.

[Brian]

Let's see...68 years, assuming ~$25k/year adjusted for inflation...

Comes to about $1.7 million + salary for 5 years of highway patrol during WW2.

It's the like the government creates an alternative reality lottery system in which some rare, lucky people get rich doing nothing. I call that fairness.

[Johnathan Swift Jr.]

His pension was of course actually miniscule for most of his long retirement, light years from what it is now. They made the pensions retroactive to older retirees years ago, ones who signed on to much less generous benefits and of course the projected cost ended up being many times what they said the measure would cost, so these old guys were brought up to scale.

The CHP only hit the big casino in recent decades. When my friends signed on in the 1970s, the pensions were not out of line. It was the big jump to 90% of their top salary (just salary with the CHP, overtime doesn't count) that hit the state hard. Once they got that deal 30 years/90%/Collect at 51, then all the other employees demanded and got 70% under the same terms. Then almost all the municipalities followed suit. There are simply too many of these employees for anyone to make this type of agreement.

[Bodica Slayer of Woodchip]

His spouse could be collecting those benefits.

[ThomasD]

So he bought a teenage Filipina second wife?

[Johnathan Swift Jr.]

In many cases this is indeed the case. That is the problem with these laws. There are cops I know who have married much younger women, so their pension may extend ten, twenty, even thirty years beyond what was projected. Some elderly men may even marry someone just so they can collect the pension.

[daveski99]

Are my eyes OK, Fire Captains getting over $500,000 a year?

Boy I chose the exciting technology sector. What a mistake.

[Brian]

You have to pay people lots of money to do government work because it's so boring. Who wants to be a sanitation administration manager for 30 years?

So, there's the market failure right there.

* hiccup *

Just drink a case and it all makes sense.

[Paper Wasp]

It doesn't sound so bad, actually, when you think about it. You clock in around 10, you spend most of your day playing games on your computer or phone, or shopping online; you clock out between 3 and 4 and head out for happy hour with your work buds, in the nice, new state-paid vehicle. Nobody's clocking you, so why not?

Customer complaints bubble up to you about trash not being collected or trash can lids being strewn everywhere because your trash collectors are also worthless union fatasses, but you only move on complaints if your boss is watching. After all, nobody's tracking your performance; what would be the point? There's no concern about competition, no worry about job loss or auditing. After all, nobody would dare fire you because you're probably Mexican or black, and it's not like there's a competing trash collector that customers could use, LOLOL.

Your state senators have their noses so far up the union's ass that they don't even respond anymore when customers complain to them about shitty service from the trash collection mobster monopoly.

[Rational Exuberance]

Don't exaggerate: it's only about $460000/year

[Johnathan Swift Jr.]

Hey, who wants to be President anyway. Public safety is where it's at.

[Mainer2]

We had a nice view into the mentality of these people in the Union Leader last week . A state police Major wrote an editorial complaining about recent reforms to the NH state pension system. The police are now expected to contribute 11 percent towards their pensions, and can't retire till they're 52 years old. And "detail pay" (i.e. standing around road construction projects playing pocket pool) no longer factors into calculating pensions. The entitled attitude is astounding. Can't retire in my 40's ? Can't juice the pension with detail pay ? The horror.

[Johnathan Swift Jr.]

The amusing thing about all this is that none of them seem to consider that at some point perhaps the states or other entities will default and perps the federal government can't or won't bail them out. I have friends in the California CHP and at least their pension is only based on their salary without overtime. Some of them are wide enough to know that the state may not be able to keep the promises it has made.

[fvg01233]

Hudson . although Henry `s article is flabbergasting, last thursday I bought a brand new Buick after having earned $7028 recently an would you believe ten-grand this past-munth . it's actualy the most-comfortable job I have ever had . I began this 4 months ago and practically straight away started making a nice at least $83.
+_+_+_+_+_+_+_+_+ http://www.factoryofincome.com

[Bodica Slayer of Woodchip]

The end is near and it will be glorious!

[Bodica Slayer of Woodchip]

The best way to end socialism is to move & get out of its way.

[Johnathan Swift Jr.]

You mean to a less indebted state, like virtually all of the "Public Safety Employees" do once they are on retirement. They leave high tax California far behind and go where their 90% will go further. Idaho is full of retired LAPD officers, Montana has its share of Firemen. The best thing is to live in Wyoming along the Montana border. Wyoming has no income tax, Montana no sales tax.

[MarkLastname]

Tony no doubt will be here soon to explain to us all how much worse it would be if a cent of these oppressed working class six figure pensioners' checks were left in the hands of the private citizens who earned the money.

[tommhan]

This is just an impossible situation to fix. How can taxpayers possibly pay 11 grand per household to right this ship? They cannot. The size of these top pensions is just ridiculous and think about how many taxpayers it takes to just pay one of these huge pensions.

[retiredfire]

Seems like you don't understand how this works.
The employer pays a share of that pension, over their entire time in employment - that is a recorded, unavoidable amount.
Add to that, what the contracted portion the employer is supposed to pay and you have what gets put into a pension fund, that is invested.
The return on the amounts invested is supposed to pay for the difference between what the employer and the employee contribute and what the benefit payout is.
Where the system fails is in the portion that the employer is supposed to put in.
They get to decide how much that is. Some years, the rate of return on the investments is enough, and they don't have to put in much, if anything. With the recent economic downturn, these politicians - the employers - have failed to put in the amounts needed to keep the systems solvent, because they are using the money elsewhere to buy votes. The taxpayers are going to have to bail out these feckless politicians, not pay, directly, for these pensions, as you seem to think is happening.

[MyNewsLogin]

Since the debt is over a thirty year period, that works out to $367 per year or $30 per month or $1 per day. With 2.9 people in the average household in California, that is 35 cents per day per person. So drop your spare change into a jar - that'll cover it.

[ypq82322]

Ella . you think Victoria `s storry is astonishing... on saturday I bought themselves a Car after bringing in $7899 this - 5 weeks past and-more than, 10-k last munth . it's by-far the best-job I have ever had . I began this 8-months ago and almost straight away started to earn minimum $77
?????????? http://www.factoryofincome.com

[MyNewsLogin]

So, there are 76 retirees added to the "$100K Club" out of "more than" 23,000.

In other words - 0.3% - 3 out of every 1,000 retirees that started collecting pensions in 2015.

[Captkarma]

These articles make me angry when we spend 30 years working, many times without raises, seeing managers make 100,000+ a year while we might make 35,000-50,000 then to see them receive way more than a retiree needs to survive while the average retirement income including these high paid administrators is somewhere in the $20 thousand dollars a year range. Cap the maximum an retire can get would be my suggestion.