California Failure - Six Figure Pensions for hundreds of Police/Fire/City Employees
Well, wonder why California is Broke, CA cities are filing bankruptcies? There a few sites/organizations that specialize in government employees/police and firefighter unions to Fleece governments on contract negotiations. One that has now shutdown all access to the public, is http://www.policepay.net
Nothing like government picking up the tab on your college tuition on top of retiring in your 40's with a $100-150K a year pension.
Take a look at Gilded State/City Governments of California:
http://www.mercurynews.com/ci_128046...ce=most_viewed
Six-figure pensions for hundreds of retired San Jose cops, firefighters
By John Woolfolk
jwoolfolk@mercurynews.com
Vallejo, CA
http://money.cnn.com/2008/06/02/pf/r...ion=2008060305
Fat pensions spell doom for many cities
Vallejo, Calif., took the extreme step of filing for bankruptcy to get out of generous obligations to public employees. Other cities and states are watching.
(Doug Griswold - Mercury News Illustration)
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Veteran San Jose Fire Capt. Randy Sekany hung up his helmet in December at the age of 53. But he didn't leave behind his $100,000-a-year-plus salary. Instead, he joined the ranks of hundreds of former city workers making six-figure sums, with a pension that will pay him $121,510 this year.
He is one of 44 firefighters and police officers who left the city last year alone with six-figure pensions, thanks to a controversial retirement system that is receiving renewed scrutiny. Even as the cash-strapped city cuts services, it is contributing more than ever to shore up the pension fund amid the market meltdown.
Under the system, San Jose's veteran public safety workers don't have to be retired for long before their pensions exceed their former salaries. Depending on how long they worked for the city, they can retire with 90 percent of their salaries while receiving guaranteed, 3 percent annual cost-of-living increases — while private-sector workers are seeing their 401(k)s gutted by market losses.
All told, San Jose's $100,000-plus pension club includes 256 retired officers and firefighters and 34 other city workers.
"It's absolutely outrageous," said Jerry Mungai, a San Jose resident who retired from Cypress Semiconductor and is frustrated that while city retirees collect hefty pensions, his street is "cracked and crumbling" and no one picks up the phone when he calls City Hall.
Through contract negotiations
http://www.policepay.net
over the past decade, firefighter and police officer pensions rose to 90 percent of their former salaries after 30 years on the job, up from the maximum 75 percent they once shared with the rest of the city's workers. Union negotiators cited a need to keep pace with inflation and the state retirement system.Records compiled at the request of the Mercury News show that effort has created different classes of San Jose retirees: Half the officers and firefighters who retired last year will make $100,000 or more annually, while fewer than 7 percent of those who retired a decade ago will see their inflation-adjusted pensions reach that mark.
Government employee pensions have drawn heightened scrutiny in San Jose and elsewhere as officials divert tax money from public services into pension funds to meet the mounting costs. CalPERS, the retirement system for state workers, has seen costs soar in the past decade, and Gov. Arnold Schwarzenegger is demanding changes to the benefits.
Even as it trims library hours and hikes fees for residents, San Jose is contributing $131 million into the city's $3.2 billion employee retirement system now, up from $125 million last year. City officials say next year's tab could rise an additional $52 million to help offset more than $1 billion in recent pension fund investment losses.
San Jose leaders are hearing from many residents like Mungai, who chafe at costly retirement packages for city workers amid the city's eight-year run of red ink. The 71-year-old retired financial manager said he has no pension and lives on savings, investments and his $24,000 a year from Social Security.
In fact, only 12 percent of retirees from private businesses have defined-benefit pensions to complement Social Security, according to the nonprofit Employee Benefit Research Institute. Their average annual pension is $13,083.
San Jose's growing pension costs have prompted the city manager to suggest paring back retirement benefits for new hires, but the unions must agree to such changes and so far are balking. Sekany, who remains president of the firefighters union, and other city retirees note that they don't receive Social Security and that, as employees, they helped pay for their pensions.
"Our members got benefits that allow them to maintain the lifestyle they had as an active employee," said Sekany, who spent 28 years with the city. "They certainly don't become millionaires as a result of their pensions."
But the retirement benefits even for the city's civilian work force still far exceed those available to private-sector employees, whose taxes guarantee government pensions. The average pension for retired San Jose workers is almost three times the average Social Security retirement benefit. For former officers and firefighters, it's more than five times as high.
City retirees also can get free health care. Not only that, but San Jose employees can retire much earlier — in their early to mid-50s — while privately employed workers must wait until their late 60s to collect full Social Security benefits.
That has allowed many former San Jose officials to continue in other careers while collecting city pensions. The $100,000-plus pension club includes former San Jose Police Chief Bill Lansdowne, now chief in San Diego, and Carl Mosher, the former environmental services director, who is now deputy airport director for Sacramento County. (See Internal Affairs, Page 3B.)
Not all those with six-figure pensions were top city officials. Those who retired in December and stand to receive more than $100,000 in retirement this year include lower-ranking fire engineers as well as a police sergeant.
But the records also portray a vastly different scope of benefits between recently retired officers and firefighters and those whose service ended long ago. Public safety pensions have grown considerably in recent years, while those for other workers have risen only slightly.
Specifically, the Mercury News analysis found:
The average police and firefighter pension today for the 76 who retired in 1998 is $72,942 — still about twice the average for the city's 2,520 retirees who worked in other departments.
For the 90 public safety workers who retired last year, the average pension is $98,541. Half of last year's public safety retirees will get more than $100,000, compared with just five of those who retired a decade ago.
All told, 18 percent of the city's retired officers and firefighters have six-figure pensions.From the 1970s through the mid-1990s, pension formulas for San Jose officers and firefighters were the same as for the rest of the city's work force: 2.5 percent of salary multiplied by the number of years in service, to a maximum of 75 percent at three decades on the job. By comparison, Social Security pays 41 percent of a middle-income workers' earnings.
But officer and firefighter benefits began to increase in the late 1990s — the result, city officials say, of binding arbitration approved by voters in 1980. The measure was pitched at the time as a way to settle disputed labor contracts, but arbitrators generally have sided with the employees on financial matters.
Daniel Finn, a diesel mechanic and spokesman for the City Labor Alliance representing San Jose's 11 employee unions, said that while some of the city's civilian workers grumble about the increased benefits for officers and firefighters, most "realize that public safety does a job the rest of us don't do. Police officers get shot at, and firemen have to run into burning buildings."
Union and retiree representatives say benefit increases were needed because inflation was shrinking pension values. In 1963, when Lawrence Campbell retired as a fire battalion chief after 31 years, he drew a $5,011-a-year pension — worth $35,021 in today's dollars. But his actual pension now, even with cost-of-living adjustments, is just $28,894. He is among 82 retired firefighters and officers — and 1,094 other former city workers — whose pensions total less than $30,000 a year.
Ken Heredia, who retired as a firefighter in 1999 and is a director of the Association of Retired San Jose Police Officers and Firefighters, said residents outraged over top officials' six-figure pensions don't understand that "the vast majority of cops and firefighters never saw anything like that."
Union leaders say reduced benefits for new workers would kill morale, with recent hires resenting their better-compensated peers. And they note the benefits they enjoy today were negotiated with the city, often in exchange for employees making concessions in compensation or working conditions. Sekany added that firefighters are willing to work with the city on other ways to save money.
Councilman Ash Kalra, who also serves as a pension board trustee, said that because reduced benefits for new hires won't deliver any savings for years, it's better to seek cooperation with the unions on other money-saving ideas.
"We need to have help from the unions if we're going to get through the next few years."
But Councilman Pierluigi Oliverio said the city will have to reduce benefit levels for new hires to fund services for residents.
"The current benefits," he said, "are unsustainable."
Mercury News research director Leigh Poitinger contributed to this report. Contact John Woolfolk at 408-975-9346.
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