Pension spiking out of control
By Daniel Borenstein
Staff columnist
New data released under court order reveal a shocking pattern of
pension spiking by top officials of the San Ramon Valley Fire
Protection District that should alarm residents and prompt taxpayers
across California to ask whether public employees in their
communities are similarly benefiting from broken retirement systems.
The numbers show that two fire chiefs, a deputy chief and an
assistant chief who all retired in the past seven years are now each
bringing home annual pensions of roughly a quarter-million dollars
or more. The pensions far exceed the base salaries the officials
were earning during the final year of their employment.
Specifically:
- Chief Richard Probert, who retired in 2002, currently collects a
pension of $249,374 a year. His final year base salary was
$196,264.
- Deputy Chief Christopher Suter, who retired in 2006, currently
collects $260,980 a year. His final year base salary was $174,475.
- Assistant Fire Chief Michael Sylvia, who retired in 2006,
currently collects $245,502 a year. His final year base salary was
$166,173.
- And, as I've previously reported, Chief Craig Bowen, who retired
in 2008, currently collects $283,958 a year. His final year base
salary was $222,507.
All four are beneficiaries of a generous retirement formula for
police and firefighters that started at the state level with the
California Highway Patrol in 1999 and has since spread to local
public safety workers throughout the state. On Probert's watch, the
San Ramon Valley fire district implemented the change in 2000, less
than two years before he walked out the door as a major beneficiary
of the policy he strongly advocated.
Under the formula, known as "3 percent at 50," employees can retire
starting at age 50 with a pension equal to 3 percent of their final
year's salaries for every year they worked. Thus, in theory, under
the new rules someone who worked 30 years could retire with 90
percent of salary. (For the San Ramon Valley district, the new
formula represented a 50 percent boost for people who retired at age
50.)
In practice, the benefit is even richer than that, as the new
numbers from the San Ramon Valley district demonstrate. By
increasing their final year pay and adding in unused sick leave to
raise their years of service, the officials were able to further
boost, or "spike," their pensions by 24 percent to 49 percent.
Those numbers can be calculated from records released after a
taxpayer group, California Foundation for Fiscal Responsibility,
sought the names of pensioners who are receiving $100,000 or more
annually from the Contra Costa County Employees' Retirement
Association. The San Ramon Valley district is a member of the
association.
One of the pensioners, a retired captain from the county Sheriff's
Office, sought a court order to block the release. The Contra Costa
Times, Los Angeles Times and the California Newspaper Publishers
Association joined the taxpayer group in successfully arguing for
disclosure.
The data revealed that 432 of the retirement association's 7,012
pensioners receive $100,000 or more annually and 10 collect more
than $200,000. The four retired San Ramon Valley fire district
officials top the list.
It's not just the pension amounts that are startling; it's also the
details of how they grew. The pensions increase quickly in part
because for every dollar of salary added to final year pay, almost a
full dollar is tacked on to the retirement benefit each subsequent
year. Thus a $1,000 raise in the final year could translate to
$30,000 in additional pension benefits over a retiree's remaining
life.
The salaries used for computation of Suter's, Sylvia's and Bowen's
pensions were each increased by enhancements such as management pay
and standby pay. These are redundant benefits that essentially
provide extra compensation for performing work that is fundamental
to the job. They are unnecessary and should be eliminated,
especially because, once implemented, they live on permanently as
part of the employees' pensions.
Bowen also spiked his pension by selling back unused vacation. The sell-back policy was established on his watch as chief and he promptly took advantage of it. When he sold vacation twice during his final year of employment, it counted each time toward his income for his pension calculation. Vacation sell-back is a policy that should also be rescinded. Employees should be told to take their vacation or lose it.
The same can be said for the auto allowance, a policy that was also established on Bowen's watch. Paying Bowen annually for using his own car rather than providing him one owned by the district means that he will be able to collect that amount each year for the life of his pension. In essence, the district is providing him money for a free car in retirement as well.
The biggest spikes to the pensions of all four officials were their termination payouts for unused administrative leave and unused vacation. (In Bowen's case, the termination payout for unused vacation was in addition to the separate, earlier sell-back of additional unused vacation.)
Policies that allow counting such termination payments toward pension calculations are essentially gifts of public funds. The state Court of Appeal has said that termination payments need not count toward pension calculations. Public agencies should stop giving the money away.
Finally, the other key factor in the pension calculation is the number of years of service. For that, the fire district allows employees to add unused sick leave to their years of service. Each of the four officials had between one and two years of unused sick leave, which enabled them to boost their pensions 4 percent to 6 percent.
The application of unused sick leave to retirement calculations is
generally unique to the public sector. It's a practice public
agencies could, and should, end.
In sum, pension payouts in the San Ramon Valley fire district stem
from a pension system out of control. Sadly, the district is not
unique.
However, prompted by my earlier column about the pension of former
Chief Bowen, the San Ramon Valley district board is re-examining its
retirement benefit policies. The board will hear from consultants it
has hired when it meets at 7 p.m. Aug. 25 at the district
Administration Building, 1500 Bollinger Canyon Road, San Ramon. Show
up if you care. We'll see if directors are serious about reform. As
the new data show, they ought to be.
PDF: Pensions for four retired
San Ramon Valley Fire District officials
http://extras.bayareanewsgroup.com/east-bay/graphics/borenstein92.pdf Borenstein is a staff columnist and editorial writer. You can find this article online at: http://www.contracostatimes.com/danielborenstein/ci_12947725
Staff columnist
New data released under court order reveal a shocking pattern of
pension spiking by top officials of the San Ramon Valley Fire
Protection District that should alarm residents and prompt taxpayers
across California to ask whether public employees in their
communities are similarly benefiting from broken retirement systems.
The numbers show that two fire chiefs, a deputy chief and an
assistant chief who all retired in the past seven years are now each
bringing home annual pensions of roughly a quarter-million dollars
or more. The pensions far exceed the base salaries the officials
were earning during the final year of their employment.
Specifically:
- Chief Richard Probert, who retired in 2002, currently collects a
pension of $249,374 a year. His final year base salary was
$196,264.
- Deputy Chief Christopher Suter, who retired in 2006, currently
collects $260,980 a year. His final year base salary was $174,475.
- Assistant Fire Chief Michael Sylvia, who retired in 2006,
currently collects $245,502 a year. His final year base salary was
$166,173.
- And, as I've previously reported, Chief Craig Bowen, who retired
in 2008, currently collects $283,958 a year. His final year base
salary was $222,507.
All four are beneficiaries of a generous retirement formula for
police and firefighters that started at the state level with the
California Highway Patrol in 1999 and has since spread to local
public safety workers throughout the state. On Probert's watch, the
San Ramon Valley fire district implemented the change in 2000, less
than two years before he walked out the door as a major beneficiary
of the policy he strongly advocated.
Under the formula, known as "3 percent at 50," employees can retire
starting at age 50 with a pension equal to 3 percent of their final
year's salaries for every year they worked. Thus, in theory, under
the new rules someone who worked 30 years could retire with 90
percent of salary. (For the San Ramon Valley district, the new
formula represented a 50 percent boost for people who retired at age
50.)
In practice, the benefit is even richer than that, as the new
numbers from the San Ramon Valley district demonstrate. By
increasing their final year pay and adding in unused sick leave to
raise their years of service, the officials were able to further
boost, or "spike," their pensions by 24 percent to 49 percent.
Those numbers can be calculated from records released after a
taxpayer group, California Foundation for Fiscal Responsibility,
sought the names of pensioners who are receiving $100,000 or more
annually from the Contra Costa County Employees' Retirement
Association. The San Ramon Valley district is a member of the
association.
One of the pensioners, a retired captain from the county Sheriff's
Office, sought a court order to block the release. The Contra Costa
Times, Los Angeles Times and the California Newspaper Publishers
Association joined the taxpayer group in successfully arguing for
disclosure.
The data revealed that 432 of the retirement association's 7,012
pensioners receive $100,000 or more annually and 10 collect more
than $200,000. The four retired San Ramon Valley fire district
officials top the list.
It's not just the pension amounts that are startling; it's also the
details of how they grew. The pensions increase quickly in part
because for every dollar of salary added to final year pay, almost a
full dollar is tacked on to the retirement benefit each subsequent
year. Thus a $1,000 raise in the final year could translate to
$30,000 in additional pension benefits over a retiree's remaining
life.
The salaries used for computation of Suter's, Sylvia's and Bowen's
pensions were each increased by enhancements such as management pay
and standby pay. These are redundant benefits that essentially
provide extra compensation for performing work that is fundamental
to the job. They are unnecessary and should be eliminated,
especially because, once implemented, they live on permanently as
part of the employees' pensions.
Bowen also spiked his pension by selling back unused vacation. The sell-back policy was established on his watch as chief and he promptly took advantage of it. When he sold vacation twice during his final year of employment, it counted each time toward his income for his pension calculation. Vacation sell-back is a policy that should also be rescinded. Employees should be told to take their vacation or lose it.
The same can be said for the auto allowance, a policy that was also established on Bowen's watch. Paying Bowen annually for using his own car rather than providing him one owned by the district means that he will be able to collect that amount each year for the life of his pension. In essence, the district is providing him money for a free car in retirement as well.
The biggest spikes to the pensions of all four officials were their termination payouts for unused administrative leave and unused vacation. (In Bowen's case, the termination payout for unused vacation was in addition to the separate, earlier sell-back of additional unused vacation.)
Policies that allow counting such termination payments toward pension calculations are essentially gifts of public funds. The state Court of Appeal has said that termination payments need not count toward pension calculations. Public agencies should stop giving the money away.
Finally, the other key factor in the pension calculation is the number of years of service. For that, the fire district allows employees to add unused sick leave to their years of service. Each of the four officials had between one and two years of unused sick leave, which enabled them to boost their pensions 4 percent to 6 percent.
The application of unused sick leave to retirement calculations is
generally unique to the public sector. It's a practice public
agencies could, and should, end.
In sum, pension payouts in the San Ramon Valley fire district stem
from a pension system out of control. Sadly, the district is not
unique.
However, prompted by my earlier column about the pension of former
Chief Bowen, the San Ramon Valley district board is re-examining its
retirement benefit policies. The board will hear from consultants it
has hired when it meets at 7 p.m. Aug. 25 at the district
Administration Building, 1500 Bollinger Canyon Road, San Ramon. Show
up if you care. We'll see if directors are serious about reform. As
the new data show, they ought to be.
PDF: Pensions for four retired
San Ramon Valley Fire District officials
http://extras.bayareanewsgroup.com/east-bay/graphics/borenstein92.pdf Borenstein is a staff columnist and editorial writer. You can find this article online at: http://www.contracostatimes.com/danielborenstein/ci_12947725
Comments
Post a Comment