SLO County’s six-figure pension club
December 3, 2014
By JOSH FRIEDMAN
The number of retired public employees in San Luis Obispo County who are receiving yearly pensions of more than $100,000 continues to grow along with the more $500 million in unfunded pension liability.
The highest earning pensioner in the county is former Cal Poly president Warren Baker, who received a $250,687 pension in 2013. Baker’s pension is the 20-highest in all of CalPERS, the state’s primary pension system, according to the California Policy Center database.
Cal Poly, as a whole, had 26 retirees with pensions greater than $100,000 in 2013.
San Luis Obispo County had 53 six-figure pensioners in 2013. Of that group, 10 receive annual retirement pay in excess of $150,000 a year.
Former county treasurer-tax collector, Frank Freitas, who retired in the middle of his term in 2012, currently has the highest pension among all retirees in the county’s independent retirement system. Freitas received $192,649 in 2013.
Freitas is trailed in the county pension system by former sheriff Pat Hedges and retired county administrator Jim Grant. Hedges collected a $189,751 pension in 2013, while Grant received $176,459.
The city of San Luis Obispo leads the seven cities in the county in $100,000 pensioners. Last year, 24 San Luis Obispo retirees received six-figure pensions.
Former city manager Ken Hampian collected a city-high pension of $162,873, followed by retired finance director Bill Statler, who received $150,234. An additional 14 city retirees received pensions between $90,000 and $100,000 in 2013.
As with retirees from other public agencies, San Luis Obispo pensioners receive annual cost of living adjustments. The city’s six-figure pension club is currently growing on a yearly basis.
The other six cities in San Luis Obispo County have considerably fewer retirees with pensions greater than $100,000. Paso Robles has three members of the six-figure pension club, Arroyo Grande and Morro Bay each have two, and Atascadero and Pismo Beach both have one.
Paso Robles’s highest pensioner is former police chief Dennis Cassidy, who received $135,219 in 2013. Former fire chief Michael Hubert leads Arroyo Grande pensioners, having received $134,601 in retirement pay last year.
Morro Bay’s former police chief John De Rohan collected $135,275 in 2013, while Atascadero’s retired top cop received $116,896. Pismo Beach’s highest pensioner, former police chief Joe Cortez, earned $114,069 in retirement pay.
Grover Beach is the only city in the county without a $100,000 pensioner.
Most community services districts in the county have no pensioners near the $100,000 mark. Cambria Community Services District, however, has three members in the six-figure pension club, and a fourth retiree will likely join the group this year.
Former Cambria general manager Vernon Hamilton led Cambria pensioners with $116,029 in retirement pay last year.
A second state agency has some of San Luis Obispo County’s highest earning retirees. In 2013, 15 retirees from Atascadero State Hospital (ASH) received pensions greater than $100,000.
One retired staff psychiatrist, Roger Wunderlich, received $199,669 in retirement pay last year. Four other retirees from ASH also received pensions greater than $150,000 last year. Those four also worked as psychiatrists at the state hospital.
Funding employees’ retirements has become increasingly problematic for many public agencies statewide, including some in the county.
The San Luis Obispo County’s pension system has amassed $346 million in unfunded liabilities, an issue recently reported on by the San Luis Obispo County Grand Jury. Unfunded liabilities in the county’s plan increased by $25.2 million in 2012 alone, and the 2014 grand jury report states concern that they will grow substantially over the next decade.
The grand jury also criticized the county for lack of transparency in its reporting on pension debt. County taxpayers pay about $8.7 million annually to service the retirement plan debt, according to a 2013 report compiled by the actuarial firm Gabriel, Roeder Smith, and Company.
As with the county, the city of San Luis Obispo has suffered a rapid increase in its unfunded liabilities. San Luis Obispo has more than $115 million in unfunded pension liabilities, despite not having any in 2001.
In fiscal year 2001-2002, the city had more investment money in its CalPERS plan than obligations to current and future retirees. The city, then, was making no payments to CalPERS.
But, by 2010-2011, San Luis Obispo accumulated more than $100 million in unfunded liabilities, and its minimum annual CalPERS payment increased to approximately $8 million. By 2020-2021, the city is expected to owe CalPERS more than $14 million annually.
The San Luis Obispo City Council is expected to continue discussions on paying down it pension debt at a meeting in December, a recent city memorandum indicated.