Pensions

Retired City Manager Gets $216,000 Pension in City Where Average Family Makes $32,000

Out of whack public pension systems essentially are functioning as massive wealth transfer programs, taking from the poor and giving to the rich.

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AURELIA VENTURA/LA OPINION/Newscom

James Mussenden could very well be the face of California's municipal pension crisis. His friends seems to think so, at least.

Mussenden, the former city manager of El Monte, California, pulls down more than $216,000 in retirement benefits each year, along with free health insurance and the promise of annual cost-of-living increases. He's getting two pensions—one from the city and one from the state—thanks to a loophole created in 2000 that allowed El Monte city employees to double-dip legally.

While Mussenden is living the good life—he recently took a trip to Scotland to play golf at the famous Old Course at St. Andrews, according to a Los Angeles Times piece published Friday—the city of El Monte and its 116,000 residents are struggling. More than a quarter of the population lives in poverty and the city government is groaning under the weight of pension bills that consumed more than 28 percent of the budget last year, giving El Monte one of the worst budget-to-pension ratios in a state full of municipalities with bad finances.

When Mussenden plays golf with his buddies—presumably not people who are on the low end of El Monte's economic scale—he doesn't talk about his pension.

"The guys I play golf with, they get very angry about my pension because they don't have anything like it," Mussenden told the Los Angeles Times.

Anyone who has been reading Reason or following state and local politics for the past decade knows all about the fiscal consequences of poorly run public retirement programs. Cities across the country are struggling beneath the cost of promises made to current and former employees. Some have entered bankruptcy to escape some of those bills, and others likely will.

There's other consequences, though, and Friday's Times story touches on one of them. Out of whack public pension systems essentially are functioning as massive wealth transfer programs, sucking tax dollars from private sector workers (who largely are responsible for funding their own retirements, too) and transferring it to retired public workers.

If pension benefits are in line with community norms, there's little social friction. If Massenden was getting the same sort of retirement benefits as his golf buddies, for example, he wouldn't worry about their reaction.

In El Monte, though, the system is broken. The median household income in the city is just $32,000, while Massenden and other former city workers are pulling down pensions in excess of six-figures. Harold O. Johanson, another former city manager profiled in the Times story, gets $250,000 in annual benefits. Since retiring at age 58, he's earned $3 million in pension benefits.

Unlike most cities in California, where public employees pay between 7 percent and 9 percent of their paychecks into the pension system, El Monte has covered those costs for employees since the 1980s, the Times reports. Public workers there have not had to contribute a dime to the pension system in order to get these lavish benefits (while most private sector workers contribute at least 3 percent to 401(k) plans and other investments).

No wonder Mussenden's golf buddies are mad. Everyone should be mad about that.

NEXT: Meet the Community in Louisiana Where Police Throw People in Jail First and Then Investigate

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  1. Rethuglicans are for the rich.

    1. Liberals and progressives and their lapdog bureaucrats care about poor people! They just don’t want to themselves be poor! Why do you hate children?!

    2. Both party establishments have bought into the Progressive fantasy of the benevolent paternal government, run by Top (themselves) Men. The Populist Right has serious doubts about that, but also a tendency to replace it with Small Town Morals that aren’t much better. The Populist Left is nebulous and malformed, tending to imbecile Statism and Socialism because of the malign forces in the Democrats establishment that foster that.

      Neither party of for the Rich, per se. They are both for a narrowly defined “us” that includes the rich of their Class, the properly Educated, and so on.

      1. No, Republicans are for the top .4 %
        Democrats are for the top 10 and bottom 20 %

        1. So let it be said that the top ten percent make millions per year, I guess. Unless you meant the top ten people.

        2. No, Republicans are for the top .4 %

          It’s surprisingly easy for them to win elections when they don’t do anything for 99.6% of the country.

        3. Politicians are for themselves, their first concern is re-election and then feathering their own nests. They are “for” no one except themselves. If you think one party is “good” and the other is “bad” then you are not seeing that all career politicians are corrupt.

    3. Well who the fuck wants to emulate poor? Faggot cookies maybe? Maybe it’s the irritation from my chronic lower back pain talking, maybe it’s the booze and codeine mixed righter, I don’t know. But what I do know is we should redistribute the assets from those progtard motherfuckers and harvest their organs for fun and profit.

      Happy fucking new year!

  2. The guys I play golf with, they get very angry about my pension because they don’t have anything like it,

    I wish people would apply the same kind of social pressure to people like this that they apply to Trump voters.

    Who the hell wants to hang out with someone who is essentially a large leech?

      1. Paying for friends is the best kind of friendship.

        1. I could do with more friends like that.

        2. Especially if it’s in the form of sex

          1. Sex with James Mussenden sounds like doing all the work while he lays there with his arms behind his head asking whether you like taking it.

            1. And why wouldn’t he do that? He pays the working girls well.

    1. Who the hell wants to play golf?

    2. They should take the long view and beat him up for his lunch money. Regularly.

  3. Where’s commie kid to tell us CA has a ‘balanced budget’?

    1. Fapping to pics of James Mussenden.

  4. Out of whack public pension systems essentially are functioning as massive wealth transfer programs, taking from the poor and giving to the rich.

    I hate that the bolded portion of the sub-headline will make this more of an outrage in many people’s eyes. As if stealing from the rich and giving to the poor is less egregious.

    1. His golf buddies are chipping in more per person, I assume, so yeah. The wealth transfer is from the non-connected to those in control of legitimized violence. Not as catchy, you have to admit.

    2. Working as designed

    3. “As if stealing from the rich and giving to the poor is less egregious.”

      Yes, rich people stealing from poor people can be seen as more morally repugnant than the reverse. The libertarian argument against well transfer that has been compelling for me is a purely consequentialist one, ie wealth redistribution is wrong because it does not work. If it *did* work, if you could pass a hefty tax on multimillionaires and solve poverty without destroying nonmonetary human rights, then I would say go for it. There are moral imperatives other than negative rights. Its important not to confuse what can be accomplished eithin the bounds of a civil, rights-respecting society & what is moral. The sort of argument you are making here is in large part responsible for the public perception of libertarians as Mr Burn caricatures. Thanks for that, btw. And read more Hayek.

    4. Government = Robin Hood has been the accepted norm for a long time now.

      Sadly, it’s government as the Sheriff of Nottingham really. But people don’t see that.

  5. Somehow I knew, just from the headline, that this city was in California.

    1. To be fair, it could also have been Illinois or New Jersey.

    2. I had thought New Joisey.

      1. Which exit?

    3. I live in Vallejo, CA and knew it too.

      Are there any states where local government employment isn’t the highest paying jobs around?

  6. Isnt wealth transfer the main purpose of government?

    1. Not the main purpose. Just the main activity.

  7. Cadillac public pension tax sounds just to me. Excess public wages tax sounds good as well. Liberals like that 95% tax bracket.

    1. For others, though.

      1. By others who took it through the evil profit schemes. Not those that took it through benevolent tax schemes.

        1. Interestingly enough, I heard those very claims from Cal State professors, who had never worked in the private sector in their lives, while taking intro courses in an MPA program.

          Profits are bad.

          Private companies make profits by raising prices, thus, stealing from people

          Government is non-profit. Government is noble. Without government, we’d all be plebes subject to tyrannical, for profit corporate rulers.

          It was nauseating!

  8. And now for a bit of well-deserved schadenfreude after the last several nut-punchy articles. Anti-NRA hatchet job Miss Sloane didn’t just bomb, it cratered like a nuclear bunker-buster.

    But two weeks after its national release, it has made only $3.2 million. During its second weekend, it averaged just $102 per movie theater per day. With a ticket price of $10.30 per adult, that comes to an average of only 9.9 people a day seeing the movie in any given theater. At least people had no problem finding a good seat.

    1. And it wasn’t for lack of trying to get people to show up. Out of the 200 highest-grossing movies of 2016, only ten exceeded the $15.9 million television advertising budget of Miss Sloane, and seven of those did so by very small amounts. Miss Sloane spent more than the Star Wars spinoff Rogue One, Star Trek, Pete’s Dragon, Arrival, Doctor Strange, and Hacksaw Ridge. It had twice the advertising budget of such hits as Sully, The Girl on the Train, and The Secret Life of Pets.

      For every dollar spent on advertising, Miss Sloane brought in just 21 cents in ticket sales. By this measure, it came in dead last out of the 200 top-grossing movies in 2016. No one else was even close. Coming in second-to-last was Collateral Beauty, which made 53 cents per advertising dollar. The average movie made almost $2 for each dollar spent on advertising.

      1. 😀

        A perfect microcosm of the divide between hollywood and reality.

        1. Not in California.

      2. there were more than 200 movies at the box office in 2016?

        1. Four mainstream releases each weekend? Never mind the arthouse movies.

          I know Siskel and Ebert were always able to do three new movies each week, so I don’t think four or five, getting to over 200 movies, is that big a stretch.

          1. Fair enough, Mr. Maths. Now that I thought about it a bit, I did see more 2016 releases than I initially realized, up from 4-5 to around 10.

      3. I am reminded of The Producers except that gun grabbers are so incompetent they couldn’t even keep it a secret to (a) avoid the humiliation and (b) fool their investors.

      4. I can’t stop smiling.

      5. Sometimes advertising backfires. All they needed to do was show that Jessica Chastain was in it, and not hint at the political content.

    2. Let’s hope that Miss Sloane was such a train wreck that it destroys the careers of everyone associated with it.

  9. Every financial report I’ve seen on our Police/FF retirement system here in WA shape shows it’s in good financial shape.

    As a contrast.

    And yes, it was one of the things I researched before transferring here…

    The old system – LEOFF I was poorly conceived, too generous and that’s why the state retooled the retirement system…

    LEOFF II is (arguably) not generous enough in some areas, too generous in others, but on balance is pretty reasonable and in fact is so well funded we’ve actually on a couple of occasions had our contribution amount LOWERED because it was doing so well.

    wow.

    I realize Reason wouldn’t dare report on a SUCESSFUL and solvent public retirement system because their narrative deserves support by only selectively reporting on failures vs. successes.

    if they dared report on well funded responsible fiscally sound retirement systems – well, how would that help the “sky is falling” mantra?

    The Office of the State Actuary’s latest report says our plan has 119% funding. That is the ratio of the PUC assets over the liability.

    119% funding is pretty good.

    1. There is no reason for your pension to be run by the state even if it is successful. You have a union, do you not? It can run the pension.

      1. I’m not arguing it should or shouldn’t be run by the state

        my statement is descriptive not normative

        I am saying it is run in a manner such that it is well funded without placing the tax payers or anybody else in dire straits…

        it is a COUNTERexample to Reason’s cherry picking…

        1. What is the purpose of presenting a counterexample if not to support a counterargument?

        2. Shouldn’t you be out slurping cop balls, Faggot Known as Dumphuck?

    2. Moreover, having your contributions reduced because of strong investment returns is the height of hubris. That and similar actions are part of what has screwed over other pension systems. Your excess contributions should be saved to pay for the inevitable investment shortfalls.

      1. But those shortfalls will most likely come after the next election cycle anyway.

    3. I realize Reason wouldn’t dare report on a SUCESSFUL and solvent public retirement system

      Blind squirrels and nuts come to mind, and of course any “sucessful” program can rapidly be turned around by union reps and politicians conspiring to bleed taxpayers for votes. But the point is taken, perhaps Reason should focus on the scant handful of pensions that aren’t bankrupting their municipalities.

      1. I don’t quibble about the currently funded and solvent state of the NYS ERS on these articles because I’m aware of three important factors.

        First, the solvency is dependent upon a continued rate of return from investments. Mismanagement (or worse, politisized investing) could gut that.

        Second, the contributing entities are constantly arguing to have to pay in less (both employer and employee contributions) which could undercut the initial investment.

        Third, the legislature and governer keep seeing what looks like a big pot of money they want to get their mitts on to piss away on pet projects and pork. Only the diligence of an independantly elected Comptroller defending his fiefdom keeps them from looting it.

        Other than that, it’s doing great.

        1. Walking the razor’s edge, couldn’t be more stable.

          1. If you’re not living on the edge you’re taking up too much space.

    4. Check the Office of the State Actuary’s report and look at the economic assumptions. 7.80 percent lowering to 7.7 percent. Ridiculous. The rate of return a responsible public pension plan should use is closer to 5 percent depending on the asset mix. That makes a huge difference in calculating the pension liability.

      Put simply, LEOFF 2 isn’t “successful” or “solvent.” It’s underfunded because it’s using an unsustainable rate of return. But don’t worry. When you’re working at second or third public safety job (double or triple dipping), the State will make good by screwing taxpayers.

      1. Links:

        Actuarial assumptions
        Plan assets

        Of note, the actual rate of return for 2015 was 4.64% against the assumed rate of 7.5% for LEOFF 2.

        So it’s on track for insolvency just like every other pension system.

      2. So much this. You’re being defrauded, TakD.

        1. If every other state/municipality is any indication, he’s not being defrauded, the taxpayers are.

    5. Well hooray for you in Washington state. For those of us in New Jersey, Illinois and California, the sky truly is falling.

      But don’t boast too loudly. One reason (though, in fairness, not the only one) why New Jersey’s pensions are in trouble is because they did exactly what Washington state is now doing ? ? lowered contributions when things were going well. You maintain contribution levels good times to ensure you have a reserve cushion to survive the bad ones. It’s called income averaging, and every individual investor with half a brain knows this. New Jersey eliminated employer contributions and reduced employee contributions during the 1990s when the stock market was booming, and then got slaughtered on the market dropped. Seems like you folks in Washington state did not learn this particular lesson.

      1. I live in WA. Believe me, no one working in Olympia has ever learned a goddamn thing.

    6. What’s the assumed rate of return? They love to assume ridiculous returns as a way of pretending to be viable and need less funding.

    7. Yes, a government can run a successful pension program as a broken watch can correctly report the time twice a day. It happens sometimes. But that really isn’t the point. The problem is the implicit guarantee of a taxpayer funded bailout if the pension plan goes south.

    8. Who is providing these “financial reports”?

      The public agencies, the state, the unions and the government employees all say the same thing in California. And, they point to all sorts of financial reports that support their position.

      In the meantime, every actuarial professional I’ve ever encountered – usually insurance company analysts – says it is clear that the defined benefit, public employee retirements systems are unsustainable. And no one ever asks them for their analysis when preparing these “financial reports”.

      Beware of your sources.

  10. Did they check their mom’s basements?

    http://www.foxnews.com/world/2…..-list.html

  11. What can be done to fix this? It’s absolutely infuriating, but it’s hard to see a solution short of complete collapse. While stories like this don’t get as much coverage as “real news” (like the caliber of the celebrities at Trump’s inauguration), it’s also not exactly a secret. It’s not a cover-up. It’s not like he’s secretly embezzling funds. It’s out there. It’s legal theft. And nobody really seems to care enough to be animated by it.

    I don’t even really blame the guy. It’s possible that he’s a real cock, but it’s also possible he just kind of worked his way into this job and took what was on offer. If it wasn’t him cashing those checks, it would’ve been the next guy in line.

    It seems like there’s no motivation to clean this stuff up. It’s just going to result in slow decline and eventual collapse of lots of municipalities and eventually states, and eventually the fedgov.

    1. Give the pensions a haircut. It doesn’t have to be overnight, but capping out their benefits would be a good start. For example, tell this guy that he’s going to get $10,000 less each year until he dies or his pension is reduced by 50%.

    2. While stories like this don’t get as much coverage as “real news”
      Especially in libtard rags like the LA Times.

    3. It is assumed by all, at least in California, that they can never collapse because of “the California rule”. i.e. the state and thus the taxpayers, will have to foot the bill.

      What’s to worry about? ;-(

    4. As a local government employee with more than 20 years experience in local government and, 20 years before that in the for-profit private sector as a finance professional, I share your infuriation.

      But, I can tell you, it will drive you nuts if you let it.

      There is no one, absolutely no one, minding the store! I can tell the press, our legal counsel, new board members, the state AG, friends and family to no avail. No one will take this on.

      It’s Nero fiddling as Rome burns. It doesn’t stop until the fuel is gone.

  12. Damn, I was going to ask if it’s just me or are the nutpunches coming one after the other here? But then I see our stalwart nutpunch defender has been attracted by the nutpunch bait so I guess that answers that question.

  13. Completely OT: What’s going to happen to Snowden when Sessions pushes Trump to ask his butt-buddy Putin to ship Snowden’s ass straight to Gitmo?

    1. If Snowden ends up in prison, it will be in ADX Florence or another supermax, not Gitmo.

  14. just because it falls short of the legal definition of “criminal” is not going to allay the hand of the mob.

  15. The neighborhood I live in is lousy with these types. I can’t really blame them personally. The incentives dictate that the double dip is good sense. I can fault them for their entitled attitude towards it.

    1. Saw that too where I lived. Lots of former government employees retired at 50 or 55 living well while the other half was still working and wondering how they were ever going to retire.

      I kept hoping this juxtaposition would incite a revolution against the government retirement programs. Particularly the 3%@50 “safety worker” plans. But, no dice.

      It would take a full out revolution to end this. Addicts don’t give up that easily.

  16. if you want to talk about stupid wastes of money, let’s talk about the amount of $$$ the taxpayers shell out when police administrations violate our rights.

    I’ve sued invidivually and as part of my union and won every time.

    and it comes out of taxpayer pockets.

    when police admins are reckless with OTHER people’s money… those others pay!!!

    big time

    1. Violations such as?

      1. Being told he can’t slurp cop balls.

  17. Out of whack public pension systems essentially are functioning as massive wealth transfer programs, taking from the poor and giving to the rich.

    Progressivism in a nutshell: unaccountable bureaucracies do what is good for bureaucrats.

    Who knew?

    1. Back to those MPA courses I mentioned: One of the textbooks addressed bureaucracy. One of the characteristics it listed for bureaucracy was that it will always protect itself.

  18. More frequently the transfer is from middle class taxpayers to government employee elites. In my California town the average family income is $68,000 and the average firefighter’s pension is $128,000 plus bennies. Yet, come election time tax measures never seem to fail.

    1. CA has mastered the tax hike bait-and-switch. They’ll say they’re only going to tax “the rich” but the revenue comes from the middle and upper-middle, not the top.

      1. Did you see how many bond measures and new transportation taxes passed in the SF Bay Area in this last election?

        It’s amazing. People really do think money grows on trees. 🙁

    2. Yeah. When retired cops and firefighters are challenged about their lucrative, publicly financed pensions and they fight back, they never mention the cost of their lifetime healthcare benefits that is on top of the pension. That whole issue gets overlooked which I find very unfortunate.

      As a finance officer in a local public agency, I can tell you that health care premiums for an employee & one dependent aged 55 or older are nearly $2,000/month. More than most house payments. Even in RE obsessed CA.

      You younger folks on this forum should take note of that for your financial planning in your future. The only thing stopping this 60 year old from retiring is the $24,000/year I’d need to spend on Kaiser Health Care until we hit 65, when a Medicare supplement will cost us “only” $800/month. 🙁 I’m not a cop or firefighter so, I don’t have healhth care in retirement benefits.

      You’ll all be facing this someday. The best time for reforms are right now, before you are forced to deal with it individually.

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  21. Look into whether Mussolini there is a member of the American Society of Association Executives. The outfit invades associations then injects its own attorneys as phages. The primary infiltrator gets the bylaws amended to set that individual in the catbird seat and normal picayune squabbles are guided and retasked to increase ASAE income and control. These worthies took over a translators association and turned it into a milch cow for staff, even invented nonexistent laws to frighten boardmembers into voting the parasite agenda. Meta-predators may be the wave of the future.

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  25. Don’t be mad at him for cashing the checks. Be mad at the dopes who made the rules, and change the rules ASAP.

    1. City managers are responsible for city finances and long range planning. That should dictate an ethical approach to compensation, including their own.

      There is such a thing as ethics. Even if most city managers don’t have any.

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    1. This retired city manager does better than your best uncle’s ex-wife! And, he’s retired.

  27. Long before I got into government employ, in California no less, I was saying that government salaries and benefits were out of kilter with the general population. Whenever there was a labor dispute, the public employee unions along with their cronies in local and state government management, would make comparisons of what some other governmental agency, usually far away, was paying. This is a self inflating pyramid.

    There is no reason that local government pays any higher wages and benefits than what is required to recruit talent locally. It doesn’t matter what they’re paying in Peoria. Just what must be paid in Podunksville, CA to get qualified people to work for the City of Podunksville. But, don’t tell guys like this city manager that.

    By the way, city managers, at least here in California, are the biggest carpet baggers you’ve ever seen. They have contracts with no fault severance clauses, jump from city to city every three to five years, get to count all of their time in any government employ towards vesting in the state retirement system and, seldom live in the very cities they are “managing”.

    If we don’t get this genie back in the bottle soon, we are all doomed to a life of servitude to our betters in state and local government employee.

    All hail Ceaser!

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  31. Public Servants? Two words never meant to be used together, “career” and “politician”. Re-elect No One.

  32. Although Mussenden was the City Manager he managed the city’s affairs to benefit himself but NOT the city. Sounds like a strong case of fraudulent enrichment.

    The criminal justice system need to charge him, put him in jail for fraud and eliminate his pension…

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