The total pension benefits promised by the San Diego County Employees’ Retirement Association (SDCERA) increased 1,237 percent from 1986-2016 — an amount which is over 300 percentage points more than the increase found at CalPERS over that same time period.
After tracking fairly closely with the other economic indicators from 1986-2000, the size of promised pension benefits exploded after 2002, as shown in the chart below:
This sudden growth reflects a dramatic benefit enhancement approved by the county Board of Supervisors in 2002.
Transparent California Executive Director Robert Fellner blames a broken governance model as the key factor behind such recklessness:
The 2002 enhancement was approved, in significant part, because U.S. state and local pension plans like SDCERA employ accounting methods designed to hide the true cost of the promised benefits — despite such methods being outlawed in the private sector and rejected by public pension plans in over 100 countries worldwide.
This scheme incentivizes politicians to over-promise benefits on the backs of future taxpayers — as they are immediately rewarded for doing so, yet immune from accountability when the costs show up several years later.
This also explains why such lavish pension benefits are only found in the public sector. Academic studies have shown that workers vastly prefer higher salaries to higher future pension benefits. The costs of higher salaries, however, are immediate, transparent and easily understood by all.
The costs of pensions, by contrast, are inherently opaque, which makes it a uniquely effective way to covertly enhance public workers’ compensation.
The below chart reflects the cumulative growth in SDCERA’s promised pension benefits (accrued liabilities) alongside a variety of San Diego County economic metrics:
|San Diego County Indicators||Growth from 1986-2016|
|Promised Pension Benefits||1237%|
|Median Household Income||173%|
- Promised pension benefits reflects the growth in accrued liabilities, as reported by the San Diego County Employees’ Retirement Association (SDCERA).
- San Diego County personal income “is the income that is received by all persons from all sources,” calculated and reported by the U.S. Bureau of Economic Analysis.
- Median Household Income data was provided by the U.S. Census Bureau. The Excel Trend function was used to fill in years in which data was unavailable.
- Inflation is derived by calculating the growth in the Consumer Price Index for All Urban Consumers: All items in the San Diego-Carlsbad, CA region.
- Population data was provided by the U.S. Census Bureau.
For more information, 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 of the Nevada Policy Research Institute, a nonpartisan, free-market think tank. The website is used by millions of Californians each year, including elected officials and lawmakers, government employees and their unions, government agencies themselves, university researchers, the media, and concerned citizens alike. Learn more at TransparentCalifornia.com.
Categories: 2018, Press Releases