Full-career Orange County city retirees earn 54% more than residents’ average salary

For Immediate Release
Contact Robert Fellner, 559-462-0122, 201-206-6469 (cell)

Full-career retirees from Orange County municipalities received an average CalPERS pension 54 percent greater than the average salary of area residents, according to just-released 2014 pension payout data fromTransparentCalifornia.com. Full-career police and fire retirees took home pensions worth nearly double the average salary.

The over 600,000 records — obtained through a series of public records requests to the California Public Employees’ Retirement System (CalPERS) ­— reveals an average full-career pension of $81,372 for miscellaneous, which includes all non-safety retirees, and $99,366 for safety retirees of all Orange County cities enrolled in CalPERS.

By contrast, the average annual salary in Orange County was $53,010 last year, according to the Bureau of Labor and Statistics.

The 3 largest CalPERS payouts to Orange County retirees went to:

  1. David N Ream, former Santa Ana City manager: $277,194,
  2. John J Schatz, former Santa Margarita Water District general manager: $270,613, and
  3. Thomas J Wood, former Anaheim City manager: $248,914.

“Average full-career pensions that significantly exceed the wages of most full-time workers shatters the myth that CalPERS only provides a modest level of retirement income,” said Robert Fellner research director for Transparent California.

Fellner says that such exorbitant benefits are the reason pension contributions are skyrocketing, adding that, “Retirement costs are directly related to the generosity of the benefits promised and, unfortunately, taxpayers are now being required to pay an equally exorbitant sum to help fund them.”

Average full-career CalPERS pensions for Orange County cities

Fellner noted that the median contribution rate for Orange County cities — 25 percent for miscellaneous and 42 percent for safety employees — is significantly higher than the 6.3 percent that private employers pay for their employees’ retirement benefits, according to the Bureau of Labor and Statistics.

Fellner warned that, “As high as the current rates are, CalPERS is projecting significant rate hikes over the next few years, which threatens to break already cash-strapped municipalities. What’s worse, weakening market conditions means rates will rise even further than anticipated.”

Statewide

The 2014 report contained 19,728 recipients with a monthly allowance of $8,333.34 or more — representing an annualized benefit of at least $100,000 — a nearly 35% increase from 2012’s report.

The average pension for full-career miscellaneous and safety CalPERS retirees was $65,148 and $85,724, respectively.

The top three 2014 CalPERS pension payouts went to:

  1. Michael D Johnson, former Solano County administrator: $375,990,
  2. Joaquin Fuster, UCLA retiree: $325,278, and
  3. Donald Gerth, former Cal State at Sacramento president: $305,002.

The top 10 CalPERS agencies with the highest average pensions reveals retirement income that can more than double the earnings of full-time, working residents:

10 largest average full-career non-safety CalPERS pensions by employer

10 largest average full-career safety CalPERS pensions by employer

A full-career for miscellaneous retirees is defined as at least 35 years of service, the minimum required to qualify for Social Security benefits without penalty, while a full-career for safety employees is defined as 30 years or more.

Despite accounting for only 11 percent of service retirees, it is necessary to look at full-career pensions to accurately gauge the system, according to Fellner.

“Just as one assumes a 40-hour work week when comparing salaries, any discussion of pensions implicitly assumes a full-career.

“Furthermore, the disproportionally greater pensions for those who work a full-career reveal an inequity within CalPERS. Part of the generosity of the full-career benefits comes at the expense of partial-career retirees, who receive disproportionally smaller benefits.”

Fellner concluded,“With retirement costs expanding to as much as ten times what private employers are paying, maintaining the status quo is extremely irresponsible. It’s particularly indefensible to force taxpayers to bear the entire cost for the recklessness of union-backed officials who gambled on sky-high investment returns, lost, and now expect taxpayers to bail them out.”

To view the entire dataset in a searchable and downloadable format, visit TransparentCalifornia.com.

To schedule an interview with Transparent California, please contact Robert Fellner at 559-462-0122 or Robert@TransparentCalifornia.com.

 Transparent California is California’s largest and most comprehensive database of public sector compensation and is a project the Nevada Policy Research Institute, a nonpartisan, free-market think tank. Learn more at TransparentCalifornia.com.

2 thoughts on “Full-career Orange County city retirees earn 54% more than residents’ average salary

  1. It is much worse than it appears: Compare the “cost” of the pensions, including POB+interest, annual contributions and Unfunded deficits. The total cost per year is about double the size of the govt. pension.

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  2. For me a more meaningful comparison would be to compare the 30 year public sector employee retirement pay with the average pay level of 30 year still working public sector employees and also with private sector workers who are still working at 30 years or more. In other words, use the same number of years (30 or more) to compare each group. Also, the perceived inequity between retirement benefits for long term vs. shorter term employees is by design in order to incentivize long careers. Nothing wrong with that goal.

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