California public pension payouts doubled in recent span

September 9, 2013

moneyThe average monthly pension payout for new retirees in California’s primary public pension system doubled between 1992 and 2012. [Sacramento Bee]

The average monthly payment for new retirees in the California Public Employees Retirement System (CalPERS) increased from approximately $1,500 to $3,000, according to CalPERS data.

In the same 14-year span, pension payments to state and local police officers and firefighters tripled on average. The average first month pension payments to state police and firefighters increased from $1,770 to $4,978, while the first month payments to local police and firefighters increased from $3,296 to $6,867.

Over the same period, first month payments to California Highway Patrol officers doubled from $3,633 to $7,418. A $7,418 monthly payment equates to a yearly pension of more than $89,000.

The Sacramento Bee’s review of the CalPERS data showed that increases in pension formulas became popular in the late 1990s and early 2000s, and the subsequent increases in payments are still taking effect. Likewise, several years will pass before recent cuts to pension formulas take widespread effect.

CalPERS actuary David Lamoureux attributed the doubling in pension payouts largely to increases in salaries. He said salary growth explains “at least 50 percent” and “maybe closer to 70 to 75 percent” of the recent rise in pension payments. Lamoureux said increases in pension formulas “could easily account for another 20 percent of the increases.”

 


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mrcyberdoc

It’s interesting how one only hears one side of the story here. As one of those “fat cats” who Is making tons of money off the public retirement system, let me set the record straight. I worked the same job for 35 years, many of those without any raise at all thanks to the politicians in Sacramento. My profession was making 20%-30% more in the private sector but I chose to live here with clean air and open spaces rather than move to a metropolitan area. And yes, I am collecting social security for which I paid into monthly like most other working people for 45 years. So call me a double dipper if you wish, but neither pension came for free, a fair percentage was coming out of my paycheck monthly and deposited into CalPers and Social Security.


Bash CalPers if you wish but it is one of the best managed and healthy pensions in the country. Do keep in mind many years ago the state tried to raid CalPers by asking for “loans” when California was fiscially irresponsible (more often than not…) Fortunately there are laws forbidding California from doing that now as we know how state and federal governments pay back loans (yea, with other loans)


Yes pensions of any kind are a pyramid scheme and depend on present employees (and the state in this case) to help fund those who are retired. But CalPers has also invested and grown their pension fund wisely unlike many others.


Another thing to consider when looking at the numbers is when the economy is bad, people tend to hold on to their jobs longer and will retire later, thus have larger retirement packages than if they changed jobs or retired at a younger age.


So complain away, but be assured there are two sides to every story


kayaknut

If CALPERs is so well managed then why not have it stand on it’s own?, without taxpayer funded bail out?


“CalPERS’ $900 million green energy investment fund has produced an annualized return of negative 9.7 percent”, maybe it’s just me but a negative return doesn’t seem that wise???


Simple fix, just have CALPERS fund all it’s liabilities, and give the taxpayers a break


Willow

Where did you come up with the farce that CalPers is responsible? The state legislature wants to FORCE non-state workers to pay into CalPers to save it from collapse!! And of course, they’re giving the promise that the money will be taken care of – as if the public’s too stupid to figure out that if they’re FORCING money from the private sector to be paid into it… it must be because it’s financially insolvent.


I have yet to meet a double dipping government employee with any shame – every one brags about it – shamelessly. Government employees shouldn’t be allowed to “double dip”. It’s amoral to FORCIBLY take from others – especially from the poor and their children who also pay the taxes that support your “fat cat” a…s.


There are millions of people who worked the same job their entire lifetime who don’t get to “double dip” – but you do – and you have the audacity to boast it and try to defend it?


There are millions of people who work their entire life and don’t get a government paid retirement package paid for by FORCIBLY TAXING others. Their retirement comes from saving from their wages. And some people never get to truly retire, but have to keep working – to pay the taxes to support people like you. So tell me, what makes you and what you did so much more worthy that you should shamelessly enslave your fellow man and cause hardship to others?


Sounds to me, Mr. Cyberdoc, that you’re a good example of the selfish “government entitlement” mentality that is sucking the people of this country dry. And what’s even more grotesque is that people with such mentality actually think they’re decent people as they enslave and rape their fellow man!


It’s pretty sad when the death of a human being is a blessing to another because it means less taxation/enslavement for them.


That’s the world you’ve created, participated in, and enjoy.


r0y

As if anything will change. We’ll be paying for these leeches for YEARS and YEARS. Any and all actions taken now or in the future will exclude them and only effect new hires and such.


It’s like asking congress (a bunch of lawyers, generally) to get serious about tort reform. Some things will never happen. Asking public employees (I do not use the word “workers” with most of them) to take LESS or give up any bennies, and you’re in for an uphill battle against avaricious addicts to the system.


Rambunctious

This is so infuriating…I can understand what happened. When the economy was riding high politicians and State employees went on a spending spree. They set themselves up with health care plans pension plans and other perks. The problem came about when the economy tanked in 08. The kettle ran dry but they kept on showering themselves with lavish retirement plans unheard of in the history of California. I’m certain they felt it was only a matter of time before Brown and Obama set this ship back on course and then they could honor their commitments. Fat Chance! They seem to be counting on the very economic and social mentality that has brought them to this dilemma. Numbers don’t lie…if you want the perks Mr. and Mrs. state employee vote for people that believe in capitalism and free enterprise…not welfare and food stamps.


OnTheOtherHand

It is not even necessary to vote for someone who is an uncritical supporter of capitalism and free enterprise. Just vote for someone with a sense of fiscal responsibility and an understanding of budgetary realities. (Granted this is more likely to be a supporter of capitalism but it is not exclusively so.)


Jorge Estrada

Aesop wrote, “We hang the petty thieves and appoint the great ones to public office.”


womanwhohasbeenthere

This is one of many reasons why California and many municipalities here and across the country are going broke.


It is time to reform the current system – perhaps a hybrid plan of 1%- 2% of AVERAGE salary over one’s career, as opposed to 2.75% or 3% of last highest salary or last three years” salary. And make public employees pay in to Social Security(some do) to help the beleaguered taxpayers who are paying their salaries and benefits. Lastly, given how high government employee salaries are,compared to similar jobs in the private sector, and how generous their benefits are, they should be encouraged to save for their retirement with some of that income, like the rest of us have to do.


This is not much to ask of anyone at a time when we are facing so many problems. It would certainly encourage morale in the private sector where the perception is that government employees are lazy and overpaid. To oppose such a thing is to confirm this perception. Court cases are pending regarding pension obligations in the event of municipal bankruptcy. Perhaps one way to stave off bankruptcy would be to make these reforms. It would certainly be better than getting NOTHING!


kayaknut

The first reform should be to make the system stand on it’s own.


isoslo

How about they join social security like the rest of us, or are they too good for social security? Then they can self contribute to a 401(K) like the rest of us. Somewhere along the way the government people decided that they have a right to income for life for merely showing up to work. We need to end this unaffordable scam now!


OnTheOtherHand

Not all public employees are overpaid or slackers at work — especially at the lower end of the scale. The benefits are about the only thing that makes some government jobs a better option than comparable private industry jobs. Also, jobs that are high-demand, low-supply types tend to pay better in private industry.


Rather than bashing all public employees, we should be targeting those that actually are overpaid (beginning at the top with administrators) and look at reform of excessive benefits (including pensions) generally.


Since there appears to be a legal obligation to pay out the excessive pension benefits to those who signed on with them, I am very reluctantly resigned to the fact that they will drain our state financially for years to come. Reforms have been enacted in the field of government pensions but they will take a long time to produce any effect. Those who have been paying attention to what is going on should realize this already.


tomsquawk

just one more thing i hate hearing about; feeding at the public trough. i wish i had gone into public service.


Old Salt

All of “THEM” could get buy very well with half that amount of pension…


hijinks

I agree, but note it’s a 20 year period, not a 14 year period. A lot has changed since 1992!


hijinks

That was supposed to be reply to “info’s” comment.


info

Though I believe public pension benefits are too aggressive, I find it interesting that the minimum wage also doubled in that 14-year span. Home prices tripled.


r0y

This is a common thing for economies based on smoke and faith.


slocoast

MATH people! 1992 – 2012 = 20 years, not 14. A big difference, and the economy was a lot different 20 years ago. C’mon CCN!