On The Money: $100,000 Pension Club Update

Rapidly Expanding List of Government Workers with Six-Figure Pensions

By Mike Luery

A three-month investigation by CBS 13 reveals the list of retired government workers collecting six-figure pensions has grown by more than 3,000 names in the past year.

Citrus Heights accountant Marcia Fritz has been crunching the numbers. “There’s over 12,000 members on the list now,” Fritz told CBS 13. “I was shocked.”

Fritz, a pension reform advocate, is the president of the California Foundation for Fiscal Responsibility. For years Fritz has used public records from CalPERS to document the rapidly expanding $100,000 Club, a membership that has grown from 9,111 names in 2010 to the new total of 12,199 today – a jump of 34%.

Fritz noted that a 2005 CalPERS list indicated there were only 1,841 retirees receiving pensions greater than $100,000.

Read: $100,000 Club in 2005

Fritz indicated the $100,000 Club has grown over 6 ½ times since June, 2005.

“At this rate, the list will be over 78,000 in just five years,” Fritz predicted.

The new Top Ten list includes the name of Randy Adams, the former police chief from the scandal-ridden city of Bell. He’s now collecting a pension of $265,000 a year.

And closer to home, the Club now includes 112 members of the Sacramento Metropolitan Fire Department – an increase of 32% in one year’s time.

But Sac Metro Chief Kurt Henke makes no apologies.

“The bottom line is I’ve buried a lot of my friends that didn’t make it to retirement or lived only a few years after retirement,” Kurt Henke told On The Money.

“With no disrespect to Miss Fritz, I think that certain entities are trying to take advantage of what I’d call the perfect storm in the economy,” Henke added.

The perfect storm is the Great Recession, which caused the stock market to tank. The most recent numbers from CalPERS show an unfunded liability of $51 billion.

“They’ve only got 60 cents for every dollar they need to pay off their pension liabilities,” Marcia Fritz asserted.

CalPERS claims to be 70 to 75% funded.

But the concern is that taxpayers may have to kick in more money to pay out future benefits for retirees. And the alternative may be even worse.

“We’re going to have to hire fewer teachers, fewer policemen, fewer prison guards, fewer everything if we don’t somehow get control over these pensions,” stated Mike Genest, a pension reform advocate with Capitol Matrix Consulting.

Genest was California’s Finance Director under Governor Arnold Schwarzenegger and is now collecting a pension of $127,000 a year.

He says pensions for public employees are too generous.
“Is this too good for what we the taxpayers can afford? I think the answer to that one is pretty clear. Yes it is.”

Genest’s firm prepared a financial analysis on public pensions for the California Foundation for Fiscal Responsibility.

The conclusions: “Across the board public pensions and public total benefits, in other words salaries, pensions, health care all added together, is substantially better than in the private sector,” Genest told CBS 13.

“It is anywhere from 10 to 50% higher once you take into account all the pensions and the retiree health care and all the benefits,” Genest stated. “That really doesn’t make sense in the long run to have the public servants making more than the people who are paying their salaries,” Genest told On The Money.

In response, CalPERS says the $100,000 Club is just a small piece of the puzzle.

“Less than two and a half percent of the employees, the retirees are in that category,” stated Robert Glazier, CalPERS Deputy Executive Officer for External Affairs.

Glazier told CBS 13, “Ninety-seven and a half percent of our employees, our retirees are receiving an average of about $2,300 a month”, or $27,600 a year in pension benefits. CalPERS is still predicting a 7.75% annual return in the pension fund, despite a 4% drop in value in the 3rd quarter this year – representing a loss of approximately $10 billion. Overall, the CalPERS fund started the year with $225.7 billion in market value and now stands at $229 billion. http://www.calpers.ca.gov/

Marcia Fritz says the $100,000 Club is growing seven times faster than all other retired government workers.

“The total retiree growth in CalPERS last year was only 4%, a little over 4%, “Fritz stated.

She added, “The $100 thousand dollar pension club grew over 30%. So it’s the fastest growing club at CalPERS. We are turning into Greece in California. We’re underwater in what we’ve promised people compared to what we can realistically pay. We just can’t do it.”

Until recently, Sac Metro firefighters paid nothing towards their pensions, but that has changed. They are now contributing 9% of their paychecks, according to Chief Henke.

“Our employees have stepped up to the plate and have been part of the solution, a big part of the solution to that problem,” Henke told CBS 13.

Other public sector workers are now paying more as well.

“The groups that are paying more are the employees,” said David Low, Chairman of Californians for Health Care and Retirement Security.

“Just recently state employees agreed to double their contributions to their own pensions, saving the taxpayers $600 billion dollars,” Low told On The Money.

Governor Jerry Brown has introduced his plan for pension reform.

He’s already getting plenty of push back from organized labor.

Meanwhile, the California legislature is holding hearings around the state on the contentious issue of pensions. The battle is indeed heating up, with billions of dollars at stake.

More from On The Money
  • Sylvia Lewis

    OK, I get why you have the news article on the high pensions, however, I totally disagree with your decision to use the names of the people receiving this pay rate. Would you be open to having your salary being announced on television? I was taught that it was rude to ask someone about how much money they made. What ever happened to media with some class?. Watch out 13 your public employee witch hunt does nothing but show how little dignity you have and how you are willing to pander to the general public. Don’t like public employees? House on fire? call a small business owner!

    • sharpone

      shhhh… We (you and I) pay them and that’s why we know. We can’t pay them in secret.

      • David

        We (you and I) also pay for private sector salaries/benefits. Every time you step into a super market or clothing store. And as Sylvia states, this is about class and respect, not what one is legally allowed to do. Let’s stick with the discussion of the topic at hand, not violate personal privacy of others, when it has no beneficial purpose to the argument.

      • Ron Hascall

        The average public sector worker spends about 30 years in the workforce and 30 years retired, and the average private sector worker spends about 40 years in the workforce and 20 years retired. California public sector retirees, on average, receive a retirement pension equal to 66% of their average base pay after working 30 years while private sector retirees receive retirement benefits equal to 33% of their base pay after working 40 years (in California the average base pay of public servants is $68,000 while the average base pay of private workers is $41,500).

        Local and state public sector workers (16% of the workforce in California) retire 10 years earlier with retirement benefits 33% greater than private sector workers (84% of the workforce) — all at the expense of the taxpayers.

  • Mary Argeris

    I have a question? Is the amount you are reporting only the employees “salary” based retirement payment? Or does it include their “Individual Investment” Retirement payments? Or does it include the cost of providing their Health Benefits? If any funds other than “salary” based retirement are included in these reports, it is misleading and unfair to not explain this. Thanks.

    • David

      Mary that is an excellent question. Most media reports of salaries include all compensations, such as medical benefits, etc. This isn’t the money the people are actually taking home. As far as pensions (after retirement), it’s very unclear what is being included. For most, the pension is just a lump sum of money. Most retirees are responsible for paying health benefits out of that lump sum.

  • J M Ellis

    I am disappointed that you continue to lead with the statement that STATE EMPLOYEES are making six figure retirements. Yet, in reality, these are NOT STATE retireees at all. If you do your homework, you will find there is a HUGE difference in STATE and City employees. Also, most often, those you name as six figure payees are either elected or appointed positions and technically are not considered employees at all. Just because their retirement is handled by CalPers, STATE employees – or even your city/county regular emplyees ( the ones who do the work for you – the REAL civil servants ) do not deserve to be painted/smeared with the same broad brush. I dare you to get your facts right and clarify on camera the difference between most STATE EMPLOYEES and these six figure retirees from posh jobs and PLEAE at least be responsible in your headling of your stories. A final suggestion! How about a story on Legislators who collect retirement for only a few years of Non-service to the peoiple??!!

  • Spike Murdock, Poet-at-Large

    Perhaps an investigation of legislators is in order. Considering the expense of bad laws, lining their own pockets and the publics disdain for them (their extremely low
    approval ratings, you might want to consider stepping up to the plate and seeing where government can save money rather than blaming the lower middle class
    works again. They are getting hit by their employers with continual threats of layoffs, no significant raises in years and individuals doing the work of formerly dozens of folks. There are departments who had forty + employees now with numbers in the single digits. Then they take heat for being slow to pick up the phone.

  • nojoe6pak

    I like the implication that a person, after working most of their life, does not deserve to have a decent retirement because they were “public servants.”! How about the local news sticks to reporting about kitties stack in trees or the local weather. You want to discover and report on something outrageous? How about reporting on system and the people who despite the rest of us not having jobs and losing homes, earn bonuses and salaries that the rest of us will not earn in our lifetimes.

  • gus tador

    “The bottom line is I’ve buried a lot of my friends that didn’t make it to retirement or lived only a few years after retirement,”
    No need to use your pals to justify a nauseating pension. They died so now you could enjoy your pay?
    Tell that to the marines! Most agonized more than you did but will be lucky to get a fifth of your benefit.

  • dan

    The bottom line is we are being ripped off by CalPERS and this needs to be stopped NOW
    Governor Jerry Brown IS NOT DOING A DAM THING to stop this

  • gina

    Thieves, thieves, thieves, everywhere you look…….thieves..

    • LiberalButConservative

      People profiting from loopholes in the pension system are not thieves…it’s legal but not moral.

  • TheBeachBum

    The rest of us retire at something less than $28,000 (Social Security) and out of that we still have to pay outlandish taxes forced upon us to support our Public `Servants’ lavish retirements. BS!

  • russell

    Chief Henke continues to spread one of the most ingenious myths used to justify the outrageous pensions afforded fire personnel – that they live only a short while after retiring. That myth was debunked several years ago by a CalPers study. The study showed that safety retirees live just as long as the non-safety. Getting a job as a fireman in California is the next best thing to winning the big lottery. That is why so many apply for work there.

  • http://taxdollars.ocregister.com/2011/11/02/100k-pension-club-soars-99-in-two-years/123353/ $100K pension club soars 99% in two years - OC Watchdog : The Orange County Register

    […] There were only 1,841 retirees in the CalPERS 100K club in 2005, California Pension Reform’s Marcia Fritz told CBS Sacramento. […]

  • http://inlandpolitics.com/blog/2011/11/03/ocregister-100k-pension-club-soars-99-in-two-years/ OCRegister: $100K pension club soars 99% in two years :InlandPolitics.com

    […] There were only 1,841 retirees in the CalPERS 100K club in 2005, California Pension Reform’s Marcia Fritz told CBS Sacramento. […]

  • Vallejoan

    Yes, Russell has it right. Someone needs to ask Henke WHO died? No one in Vallejo as far as I know! And he was here at least since 1998. So glad he’s Sac Metro’s problem now, and not ours.

  • Thomas Eastman

    Pensions will break our state to bankruptcy.

  • David

    The average CalPERS pension is about $2,332/month. Half of CalPERS retirees receive $18,000 per year or less in benefits. Unlike the private sector, 40% of CalPERS retirees do not receive Social Security, making their CalPERS pension their sole source of pension income.

    CalPERS funding comes from 66% investments, 21% employer contributions and 13% employee contributions. 3% of state funding goes towards pensions. This is the cost of paying public employees for services the state needs.

    Studies have shown that public and private sector pay and benefits are basically the same when ALL factors are taken into account.

    Only 2% of CalPERS employees receive $100K or more in pensions and many are non-unionized, specialty trained or high level management – just like in the private sector.

    California public retirees put back $2 into the economy for every $1 they receive in pensions.

    Now, with the facts in hand, let’s discuss the topic.

    • Ron Hascall

      Public-sector workers have guaranteed, defined-benefit pension plans, and many have retiree health plans too. Generally speaking non-union private-sector workers do not. Not only is such a disparity unsustainable, it is politically unconscionable. We private sector voters are increasingly irritated by what is perceived as an attitude of entitlement by those on the public payroll.

      According to the Legislative Analyst’s Office (a state department staffed by public employees), the average pension benefit for all CalPERS retirees (including those w/ less than 25 years in the system) is around $25,000 a year. That’s not even close to the private sector average, but still not the real problem.

      It’s the public employees who retired in 2008-09 with 25 years or more of service who will receive between $53,000 and $66,000 a year (double the current average). This amount will grow exponentially over the years to come as the percentage of retirees whose benefits were spiked from 2% to 2.7-3% in the late 90’s increases.

      That’s the problem.

      It’s the tens of thousands of public safety workers (Police, Firemen, Prison Guards, along with… lifeguards, motor-vehicle examiners, emergency dispatchers, livestock inspectors, funeral home inspectors, fingerprint analysts, litigation specialists, weights-and-measures specialists, photo-electronics technicians) entering the retirement pool at 3% @ 50.

      That’s the problem.

      It’s the percentage of public workers receiving pension benefits topping $100,000 a year that is projected to keep growing (78,000+ in just 5 years), in part because of increased benefits adopted in the past 15 years.

      That’s the problem.

      It will be impossible, even if the California economy was strong, to service such future pension obligations.

      That’s the problem.

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