Nearly 900% increase in CalPERS benefits dwarfs economic growth, taxpayers’ ability to pay

The total pension benefits promised by the California Public Employees’ Retirement System (CalPERS) increased 886 percent from 1987-2016 — a rate 21 times greater than the cumulative increase in the state’s population, according to a just-released analysis from Transparent California.

The growth in promised CalPERS benefits dwarfs the rate found in a variety of other economic metrics, as shown below:

CalPERSGrowth4

Transparent California credits Ted Dabrowski and John Klingner of Wirepoints as the source of inspiration for this chart and analysis. In Illinois state pensions: Overpromised, not underfunded — Wirepoints Special Report, Dabrowski and Klingner irrefutably demonstrate that the true source of Illinois’ pension crisis is the explosive growth in promised benefits, not a lack of funding.

Transparent California Executive Director Robert Fellner believes the same applies to California.

“Some politicians and government unions have claimed that last decade’s market downturn is the cause of California’s pension crisis. As this data makes clear, the real cause is the tremendous growth in the size of the benefits that were promised.”

The below chart reflects the cumulative growth in promised CalPERS pension benefits (accrued liabilities) alongside a variety of California economic metrics:

California Economic Metrics Growth from 1987-2016
Promised CalPERS pension benefits 886%
Total Personal Income 331%
Total State Tax Collections 311%
Median Household Income 121%
Inflation 119%
Population 41%

Fellner observed that blaming the inevitable market downturn as the source of CalPERS funding woes is analogous to a gambler citing a bad run at the blackjack table for having less-than-anticipated funds:

“Elected officials’ willingness to take on such massive debt, not the fact that the stock market sometimes goes down, is the root cause of California’s pension crisis.”

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.

Former LA Assistant Fire Chief cleared nearly $1.4 million in pension pay last year, new data show

Today, TransparentCalifornia.com released previously unseen 2017 pension data for the Los Angeles Fire and Police Employees’ Pension plan.

This year’s top earner was former Assistant Fire Chief Donald Frazeur, who received a one-time DROP payout of $1,171,994 on top of his regular $212,730 annual pension for total earnings of $1,384,724.

The deferred retirement option plan (DROP) allows an employee to draw a salary and pension simultaneously for up to 5 years, with each year’s pension being deposited into an interest-bearing account. Upon actual retirement, the accumulated balance can be withdrawn either as a lump-sum payment or rolled over into an annuity.

The next 4 highest earners were:

  1. Former Deputy Police Chief Michael Downing: $995,845.
  2. Former Deputy Fire Chief Joseph Castro: $931,636.
  3. Former Deputy Fire Chief John Vidovich: $893,906.
  4. Former Fire Battalion Chief Jack Wise: $893,489.

The average full-career retiree received $101,652 in pension pay last year, according to the data. A full-career retiree is defined as those who retired with at least 30 years of service. To explore the complete dataset in a searchable and downloadable format, please click here.

In addition to the police and fire fund, Los Angeles also provides its own pension plan for regular employees. For a press release summarizing the findings from that fund’s 2017 data, please click here: Dubious overtime pay helped boost former LA Port Pilot’s pension to nearly $375,000 a year.

CalPERS

All other cities in Los Angeles County belong to the statewide California Public Employees’ Retirement System (CalPERS).

The newly released 2017 CalPERS data reveals an average pension of $80,175 for those who retired from a city in Los Angeles County. Of those who just began receiving a pension within the past year, the three largest Los Angeles-area CalPERS pensions went to:

  1. Former Gardena City Manager Mitchell Landsell, who is receiving a $258,992 annualized pension after nearly 45 years of service.
  2. Former Pasadena City Manager Darryl Qualls, who is receiving a $215,173 annualized pension after 36 years of service.
  3. Former Vernon City Manager Michael Wilson, who is receiving a $215,000 annualized pension after 29 years of service.

For an extended version of the above list, please contact Transparent California Executive Director Robert Fellner at Robert@TransparentCalifornia.com.

The 10 cities in Los Angeles County with the largest number of $100,000-plus CalPERS pensions are displayed below. The far right column displays the percentage that those $100K-plus cohort represent as a share of total outlays.

City

# of $100K-plus CalPERS Pensions (2017) $100K-plus pensions as % of total outlays

Long Beach

390 21%

Torrance

237 44%

Santa Monica

219 42%

Glendale

212 31%

Burbank

181 35%
Pasadena 171

30%

Beverly Hills 111

41%

Redondo Beach 97

44%

Inglewood 91

29%

Culver City 86

37%

To see the individual amount paid to the retirees of each city, please click on the city’s name in the table above.

Fellner believes the best way to understand the impact of the growing ‘$100K club’ is to look at their pensions as a percentage of total outlays, rather than merely as a percentage of total membership.

“Comparing the raw number of those collecting $100K-plus pensions to total membership is an inherently misleading number, which merely reflects the fact that the vast majority of CalPERS retirees have less than 20 years of service credit at retirement.

“The data reveals that those receiving $100,000-plus pensions represent nearly half of total outlays for several Los Angeles-area cities, an amount which is rising rapidly.”

Transparent California will be continually updating the site with new, 2017 data from the remaining pension funds in the coming weeks. Be sure to follow our blog and Twitter accounts, or sign up for our mailing list, in order to receive the latest updates.

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.

New 2017 pension data released: CalPERS payouts approach $21 billion, up 43% over past 5 years

Today, TransparentCalifornia.com — California’s largest public pay database — released pension payout data for the California Public Employees’ Retirement System (CalPERS) for the fiscal year ending July 31, 2017. The data show total pension payouts of $20.63 billion — a 43 percent increase from the amount reported in 2012.

In just the past fiscal year alone, CalPERS began paying out pensions to 25,472 new retirees, at a total cost of more than $1 billion annually. The top 5 largest pensions among those who began drawing a CalPERS pension in the past fiscal year went to:

  1. Former Gardena City Manager Mitchell Lansdell: $258,992.
  2. Former San Jose State University President Mohammad Qayoumi: $225,283.
  3. Former Clovis City Manager Robert Woolley: $221,604.
  4. Former Placer County Sheriff Edward Bonner: $216,388.
  5. Former Santa Clara County Undersheriff John Hirokawa: $215,810.

When broken down by last employer, the dataset reveals 40 agencies or state departments with at least 100 CalPERS recipients drawing pensions of $100,000 or more. The top 10 agencies or state departments with the greatest number of $100,000 or more pension recipients are shown below:

Last Employer

# of $100K+ CalPERS Pensions

Department Of California Highway Patrol

1217

County Of Santa Clara

920

Department Of Corrections

613

City Of Oakland

549

Department Of Forestry And Fire Protection

521

County Of Riverside

499

City Of Long Beach

374

City Of Santa Ana

285

City Of Anaheim

283

Department Of Justice

279

To view the entire CalPERS dataset in a searchable and downloadable format, please click here.

CalSTRS data not forthcoming

Update: The CalSTRS data was provided shortly after this piece was published.

2017 data for the California State Teachers’ Retirement System (CalSTRS) has yet to be provided to Transparent California in a useable format, despite the data already having been compiled and in CalSTRS possession for at least the past 25 days.

CalSTRS has twice mailed badly damaged, unusable CDs which purportedly contain the requested information. The system has refused to deliver the information via alternative means.

“CalSTRS is plainly required to make this information available in an electronic format under the law,” according to Transparent California Executive Director Robert Fellner. “Sending copies of broken, unusable CDs is not in compliance with the mandates of California’s Public Records Law. Even more bizarre is CalSTRS refusal to deliver the requested information in any one of the less-costly alternative methods suggested by Transparent California. We hope CalSTRS finds a way to comply with their obligations under the state’s public records law and provide the requested information in a useable format, just as more than 2,500 other California governments have been able to do.”

Los Angeles County

New 2017 calendar year data for the Los Angeles County Employees’ Retirement Association (LACERA) is now available on TransparentCalifornia.com.

In just the past two years, LACERA began paying out pensions of $100,000 or more to 839 new retirees — or more than 15 percent of the total new pension recipients over that same time period.

The three largest payments among those recent members went to:

  1. Former Los Angeles County Assistant Sheriff Richard Barrantes: $309,142.
  2. Former Chief Physician Meenal Patel: $276,005. 
  3. Former Sheriff’s Department Chief David Fender: $271,957.

The overall top pension remains former Harbor-UCLA Medical Center Chief Physician Charles Mehringer, who earned $411,443 last year.

The data also reveal a significant difference in the average full-career pension by member type, as shown in the chart below:

Average 2017 full-career LACERA pension, by member type

Non-safety

Sheriff

Fire

$68,318

$107,893

$122,845

To view the entire LACERA dataset, please click here.

San Diego City

The just-released 2017 pension payout data for the San Diego City Employees’ Retirement System (SDCERS) reveals an average pension of $85,670 for full-career retirees.

The three largest payments went to:

  1. Former Deputy City Attorney Diane Silva-Martinez: $893,731.
  2. Former Fire Captain Bradley Cronk: $871,599.
  3. Former Assistant Police Chief Sarah Creighton: $854,225.

To view the entire SDCERS dataset, please click here.

Transparent California will be continually updating the site with the new, 2017 data from the remaining pension funds in the coming weeks. Be sure to follow our blog and Twitter accounts, or sign up for our mailing list, in order to receive the latest updates.

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.

CalPERS paid out over $20 billion in benefits last year as ‘100K club’ grows to nearly 23,000, new data shows

Update: Membership in the “$100k club” now stands at 62,474, click here for more.

Today, TransparentCalifornia.com — the state’s largest public pay and pension database — released 2016 pension data from the California Public Employees’ Retirement System (CalPERS).

The data reveal that CalPERS made 646,843 individual payments totaling over $20 billion last year, with 22,826 retirees earning pensions of over $100,000 — a 63 percent increase since 2012.

The top 3 CalPERS pensions went to:

  1. Former Solano County administrator Michael Johnson: $390,485.
  2. Former Los Angeles County Sanitation District GM Stephen Maguin: $345,417.
  3. Former UCLA professor Joaquin Fuster: $345,180.

The average pension for a full-career CalPERS retiree was $66,400.

The below chart reflects the 25 employers with the most retirees collecting at least $100,000 in pension from CalPERS last year were:

Employer

$100K Pensions

Santa Clara County

861

Oakland

523

Riverside County

469

Long Beach

360

Santa Ana

270

Anaheim

269

Santa Clara

240

Torrance

222

Riverside

216

Sacramento Metropolitan Fire District

216

Santa Monica

191

Glendale

189

Sacramento

167

Berkeley

162

Metropolitan Water District Of Southern California

159

Stockton

157

Sunnyvale

156

Fremont

155

Burbank

154

Pasadena

149

Hayward

147

Richmond

141

Newport Beach

141

San Francisco Bay Area Rapid Transit District

133

Alameda County Fire Department

126

With the recent addition of CalPERS data, TransparentCalifornia.com now has over 1.1 million pension records from 33 California public pension plans.

Statewide, at least 52,963 retirees collected pensions of at least $100,000 last year, according to the data.

The continual rise in pension costs demonstrates the importance of making this information public, according to Transparent California research director Robert Fellner.

“Californians will spend over $30 billion on pension costs in the coming year, a price tag which entitles them to full transparency regarding how that money is being spent.”

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.

Don’t wait for next bankruptcy wave

A new op-ed published in the Vallejo Times-Herald highlights the devastating effects that the public pension crisis can have on communities. A slice:

When public pension systems miss their investment target, taxpayers are required to make up the difference, and the actions described above represent some of the hard choices that are facing local governments. Soaring pension costs have already forced many agencies to cut core services. In 2011, for example, the city of Stockton announced it was going to lay off 116 police and fire employees, before eventually filing for bankruptcy the following year.

Making the problem worse, the weakening market comes at a time when many agencies are already paying record-high contribution levels.

Presently, Vallejo is paying CalPERS a staggering 60 cents per dollar of police and fire officers’ salary in retirement costs, which is projected to rise to 75 cents in the next five years — in large part to help fund average $125,000 pensions for recent, full-career retirees, according to data from TransparentCalifornia.com.

Experts across the ideological spectrum have sharply criticized U.S. public pension systems for utilizing a funding strategy that is heavily reliant on investment returns. Scholars from the Brookings Institute, the American Enterprise Institute, the Federal Reserve Bank, the Federal Reserve Board, the Congressional Budget Office and Moody’s Investors Service all agree that public pensions are using inappropriately high discount rates that promote excessive risk-taking. Nobel-laureate professor William F. Sharpe was particularly blunt, describing the use of a 7.5 percent rate as “crazy” and based on “idiotic accounting.”

Public pensions prefer higher investment targets because they make their debt appear smaller. The downside is that they must average annual investment returns at that rate in order to be fully funded — a gamble far too risky to fund a guaranteed pension.

Be sure to read the full piece here.

Vallejo’s 2015 CalPERS pension payouts can be found here.

CalPERS $100k club for Highway Patrol up 15% as taxpayer cost hits an all-time high

The number of annualized pension payouts of $100,000 or more received by former California Highway Patrol (CHP) employees increased more than 15 percent last year, according to just-released 2015 pension data posted on TransparentCalifornia.com.

The over 625,000 records — obtained via a public records request to the California Public Employees’ Retirement System (CalPERS) ­— reveals that the average full-career CHP retiree collected an $88,773 pension.

Former assistant commissioner Ramona Murray De Prieto’s $201,727 annualized payout was the highest of any CHP retiree and marks the first time a CHP retiree collected an annual benefit worth over $200,000.

Meanwhile, the retirement costs for active CHP employees just hit an all-time high 50 percent of payroll.

Transparent California’s research director Robert Fellner believes soaring taxpayer-costs illustrate the importance of providing complete and accurate data.

“Defined benefit plans like CalPERS are inherently opaque, which limits the public’s ability to accurately assess its generosity and cost. Transparent California provides complete information so that taxpayers can have a better sense of how their money is being spent.”

Costs soar at the city of Chico

The City of Chico’s new 39% contribution rate for non-safety employees was the second highest statewide and represented a 25% year over year increase, also the second highest statewide. A list of all pension payouts to former Chico employees can be found here.

Fellner noted that Chico’s outsized costs for non-safety employees was likely due to the use of a rare, but extremely generous benefit formula known as “3% @ 60.”

Sacramento Valley

Top 3 payouts to Sacramento Valley retirees went to:

  1. Donald Gerth, former President of CSU at Sacramento: $317,324
  2. John Distasio, former CEO of Sacramento Municipal Utility District: $284,673
  3. Robert McDonell, former Woodland employee: $252,837

There was a more than 13 percent increase in the number of Sacramento Metropolitan Fire District retirees who received an annualized benefit of at least $100,000. The District currently sends 42 cents per dollar of pay to CalPERS, a more than 10 percent increase over last year’s rate.

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

A full-career is defined as at least 30 years of service.

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 of the Nevada Policy Research Institute, a nonpartisan, free-market think tank. Learn more at TransparentCalifornia.com.