On The Money: Pension Spiking?

Highest Paid Take Advantage, State Treasurer Says

By Mike Luery

Hundreds of government managers in San Joaquin County are getting an expensive perk that frontline workers do not have. Critics say that perk is costing taxpayers millions of dollars.

Rank and file San Joaquin County workers want to know why elected officials on the Board of Supervisors – and other top level government executives are getting a cash payout that critics say serves to pad their pensions.

“For me being a taxpayer, I’m helping them put food on their table, when they should be helping me put food on my table,” said Rick Mendoza, a park maintenance worker for the county.

San Joaquin had to lay off 200 workers in the recession, yet the county allows some 250 government managers to get a cash payout – in lieu of health care benefits.

The payout comes to $29,000 a year, per person. So when those managers retire, their pensions are higher by as much as 25 percent, as noted in this document provided by Service Employees International Union (SEIU).

“It’s classic pension spiking,” stated Bill Lockyer. The State Treasurer told CBS 13 in an exclusive interview, insisting the San Joaquin plan is an abuse of the system:

“It’s the highest paid people in the system that are taking advantage. And I think that’s particularly egregious and needs to stop,” he stated.

Critics say that advantage is costing taxpayers about $10 million a year.

“It shortchanges the taxpayer,” said Pat Ikeda. The SEIU president for local 1021 told CBS 13, “It provides a benefit that feeds a Wall Street mentality for those very managers and special folks.”

Jo Baker-Warren, a union shop steward added, “And those guys at the top are pocketing that money. That’s where I find the abuse to be a problem.”

Rank and file union members say they don’t have the option of getting a cash payout.

“It’s definitely an abuse of the system because it’s been going on a while, and we’ve been asking them to look at it,” said Angela Radford, another shop steward with Service Employees International Union. “They’re asking us to take cuts,” she added.

But the county’s top executive sees it differently.

“It’s not pension spiking,” said Manuel Lopez. The San Joaquin County Administrator told CBS 13 the cash payout option for managers is essential for attracting the very best workers, who otherwise might go elsewhere.

“When we hire somebody there’s a commitment there to provide that individual with that salary and those benefits,” Lopez stated. He added, “And we need to keep that commitment – otherwise who would work for us?”

“We look at the total compensation of each one of those positions and compare it to a number of counties – 10 counties to be specific – and that’s how we determine what the total compensation is for that individual.” Lopez stated.

But frontline workers say the real issue is fairness.

“They should have the same health plan as we have,” said Joe DeMent, a San Joaquin County park maintenance worker.

State Treasurer Bill Lockyer has asked California lawmakers to take a critical look at San Joaquin’s controversial payout plan.

Send us your story ideas to onthemoney@kovr.com. You can also follow On The Money stories in progress via Twitter at http://twitter.com/#!/mikeluery

More from On The Money
  • Mike Holmes

    The question that should be asked here, is why are these salaries of local government executives all higher than that of the Governor, State Assembly and Senate Members? Governor Brown has an annual Salary of $151,000, while the San Joaquin County Administrator is earning a base salary of over $250,000 per year; plus his health benefit of $29,000 per year! That is outrageous! This County Administrator earns more than the Vice President of the United States! According to the website “U.S. Vice President Forum” Vice President Joe Biden earns $221,100 per year. How can you tell me the responsibility of San Joaquin County Administrator Manuel Lopez is greater than that of the Vice President. Not only should this pension spiking be eliminated, each of these executive’s salaries should be reduced! Shame on the leadership in San Joaquin County.

  • Larry C

    All part and parcel of the Democrats who pay back the unions for their political contributions at election time. These administrators see what the Union rank and file get for wages and benefits, and decide that they want some of the action. Is anyone suprised?

    • Deb

      Larry you have this all wrong. Rank and File are the lowest paid sector in Government so the Executives are not modeling anything off their wages. It’s obvious you are blinded by your political persuasion.

  • Government

    Mike, you don’t understand how government payscales work. If you look at the same position and compare between all branches of governemnt, you will see that the payscale for the same job title goes up as you go lower in the government branch. Here is how it works from least payed branch to highest paid: Federal – least, State, Local County, Local City – highest paid. Check it out and you will find this to be true.

  • SJC Employee

    As a San Joaquin County Employee, I was thrilled to see that public is finally taking note of the illegal practices exercised by San Joaquin County Board and Administrator.

    We are a Service organization so I never understood the diff. levels of healthcare benefits. Every one should receive the same benefits.

    Lopez and the SJC board members who receive the same benefits as he does, need to go.

  • Chris

    How come the poorest counties and cities fall prey to unscrupulous politicians and management and nobody stands up and says it is wrong, Why don”t state lawmakers put them in jail under the RICO ACT ? You know it”s bad when the union is blowing the whistle,.if you live in San Joaquin County VOTE

  • About Time

    One issue of note on the cafeteria plan is this. The money they receive is based on the premiums of the highest cost plan that is available. Plus they receive the premium for a family plan even if they don’t have a family. Here is another big surprise that highest plan is the San Joaquin County Plan in which the premium is set by the same people who get paid based on what the premium is. Big surprise? I think not. The county pays $17,000/year for a Kaiser plan that is better than any plan you could by as a citizen. Why don’t they give us the best plan Kaiser sells to the public and save $7,000/employee?

  • Deb

    As a tax payer, member of the Stockton Community, and a County worker for the last fourteen years, I worry about the misconception the public has towards our employment. As a County worker we do not have medical retirement like most government workers, and like most of my colleagues we go pay check to pay check. For decades our cost of living increases have not kept up with inflation, unless you are County Management who continues to experience salary increases (34% in the last five years which is twice the rate as line staff). Our medical cost just went up another 25% which represents a 25% increase in pension for the top brass. This perk is hidden within a “Cafeteria Plan” which just went from an average $24,000 dollar to $29,000 a year payout for Managers, Executives and the Board of Supervisors. If they forfeit the county medical plans because they may be covered by a spouse plan, they get the cash. This has nothing to do with food or a cafeteria. This is a hidden perk they give themselves and exactly why they are so willing to approve a yearly increase to rank and file medical and retirement cost because it represents an equal increase in their pension. I think for the Chairman of the Board to say this was not done on my watch is a cop out and another attempt to sweep this issue under the rug. This is at a time when we just laid off over 200 more line staff, some with more than fifteen years employment. They are now facing the threat of losing their homes, and are now going on Government assisted unemployment which increases the jobless rate in our Community. This is at a time when Executives have a salary package that averages way over the one hundred thousand plus range and some Executives ( like the County Administrator) as high as the three hundred thousand plus range, which is twice as much as our Governor Jerry Brown. So when you get disgusted with Government workers, remember we are not all the same. Most rank and file service members are paying several thousand dollars for their family medical, and each year we are going deeper in debt trying to keep up with inflation, just like you. Our money earned is spent back in the community for our basic family needs, just like you. Most of us have heavy debt too. Most of us are just as worried about our jobs and the direction our leaders are taking us. I understand the need to shrink government but it should start at the top. Most County workers have to find additional employment even if they get to retire, and if they have medical issues they are waiting in the same government assistance lines as everyone else. We have no medical retirement. We need legislation proposed and passed to stop the abuse of power that allows Management to pack their pockets especially during these hard economic times. I’m glad this issue has been brought to the attention of our State leaders but remember they have great pension plans too. The community should not let this issue rest and allow our local leaders to profit from rising medical cost. How long are we going to allow government officials to cut services, benefits, salaries, and jobs from the bottom and leave the top untouched? How do they justify protecting their jobs, perk increases, and high salaries with even less staff to supervise and lead. They say they will lose good Managers without these perks. Not true!! Let’s demand real cost savings by hiring smart unemployed Executives for less. The County Administrator Manuel Lopez has laughed at the idea of ending the Cafeteria Plan, saying this is how they attract qualified workers. Oh he forgot to mention, the perk that gives hundreds of Managers a 25% spike in their retirement and a $29,000.00 annual cash bonus is also received by Mr. Lopez himself. Apparently this perk/employment incentive only offered to top positions is to manage a workforce not worthy of the same benefit. Emergency legislation needs to be passed that puts a stop to this abuse of power and creates a level playing field for all County workers. We should all have the same benefit and pension plans. A system that allows the powers that be to raise our medical cost that coincidentally increases the top brass annual cash payout and increased pension plan is morally wrong and should be illegal. It’s time to put an end to these hidden perks for any Government Worker. It’s a rip off to all tax payers at a time we cannot afford it and at a time where there is a large pool of unemployed qualified Executives that would love to have a job even without these elite perks. All Citizens of the San Joaquin County should write our State Representatives to pass emergency legislation that ends pension spiking and an unnecessary cash payout. This is an obvious abuse of power and a slap in the face of all tax payers. Stockton has its own “town of Bell”.

    County Worker/Tax Payer/Community Member

  • Shawn Martinez

    I agree with County Worker/Tax Payer/Community Member…as I am a County Worker/Tax Payer/Community Member…I say…as a perk…why not provide the family of these top people their insurance without cost…for them, their spouse, and their children…seems like decent perk…no extra money in their pockets…opt in..or opt out…no cash pay out…just the option…plain and simple. That’s a “perk”….the cafeteria plan is just plain highway robbery…from the “lower level workers….from tax payers….from the community. Our workloads have increased dramatically over the past year….and though we are working more, they’ve managed to make it so we get paid less…think their jobs have gotten any more difficult to keep up with over the past year??? Maybe now that we’ve managed to get everyone’s attention!!

  • Private Sector

    You county workers/tax payers should be lucky you have jobs in the middle of this recession. The private sector has already been hit hard by these economic times and look how many workers we lost to the unemployment line. You guys are only just now feeling the brunt of the impact. Why don’t you quite crying like little kids and be thankful for your gainful employment? As for those perks, I’m sure the top execs made sacrifices such as going to college for many years. Instead of complaining, why don’t you go to school to better yourselves and maybe you’ll be promoted and get this perk that you hate so much. Why don’t you take a look at what the private sector offers their top brass? They get a boat load of stock options, car allowances, bonuses, paid moving expenses. Rank and file workers get nil.

    • CM

      Dear Private Sector,

      I am a rank and file County worker who is grateful to have my job. I fully understand the difficulties the prvate sector has endured. My husband is VP of his company, when the economy and his business faltered, he voluntarily took a 10% pay cut and took on added responsibilities, all of his managers took a 5-10% cut, while rank and file employees got a 4% cut. His is not a huge Fortune 500 company, there are no stock options or snazzy executive perks. As a result of belt tightening that started at the top, his company has not only survived, but is again beginning to thrive. As things improved, the first to have prior salaries reinstated were the rank and file employees, by his own choice, he was the last to get a reinstated salary. That is leadership. That is management. That is not the way things are done in San Joaquin County.

      San Joaquin County does not “attract” the best workers to upper posistions, they generally promote from within and those people weren’t going anywhere else to begin with. I dare say Manuel Lopez could not find a single private sector employer in San Joaquin County who would hire him at his current base salary, muchless at his base salary plus perks.

      Regarding education…I have a BS and MS from the University of California. I can assure you that few in the upper ranks in the County have more education than me. The “system” requires that I put in a certain number of years in my position before I can move to the next step. Short of filing for an elected position, there is little I can do to jump ahead.

      As for “crying like little kids”, pointing out the obvious is not “crying.” I would not belong to the union except I am force to do so in order to have my job at all. If we had more responsible and capable management, I would be agitating to decertify the union. However, the union makes some very valid points that taxpayers at every level in every jurisdiction should be taking note of and demanding change. We now have the opportunity to affect needed change in San Joaquin County, let’s do it.

    • Deb

      Anybody that has a job is thankful!! Like you said rank and file get nil.. True in private or government sector and that is our point. Education is great but work experince rules!! The CAO makes more than the Vice President of the United States and our new Governor which you feel is justified. I suspect you would be happy if all rank and file employees lost their jobs so the upper brass would continue their life of luxury!!

  • Gabi Farabaugh

    Income vs plastic-type ; money in type of pension : solutions to boost make the most a dash ; double discount personal savings ; arranging your own funds ; how you can reduce …cash in pension

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