What is bankrupting US cities?
- From: "Phil Scott" <philscott@xxxxxxxxxxxxx>
- Date: Mon, 29 Aug 2005 01:42:08 -0700
..
some retirements are paying out 200k a year.. thats 100
dollars an hour all day for life starting at age 58. This
jerk will be paid over 10 million dollars to retire. at tax
payer expense...by tax payers who are retiring on average at
900 dollars a month.
Why some pension payouts are so big
Keri Brenner
Last December, Marin supervisors awarded then County
Administrator Mark Riesenfeld a one-time, 10 percent pay
bonus.
The holiday bonus was on top of the 58-year-old
manager's annual county salary of $204,839 - plus a monthly
$1,500 stipend he was awarded for "filling in" as interim
parks director.
When Riesenfeld announced June 1 that he would retire on
June 30 after 32 years with the county - the past seven as the
top executive - there were grumblings about what some
rank-and-file employees called "pension spiking."
"Pension-spiking" refers to adding extra jobs, bonuses
or overtime pay in the final year before retiring to increase
pensions, which are based in part on final earnings.
Riesenfeld, who won many accolades for his long county
service, strongly denied any effort to boost his pension,
saying he was not planning to retire at the time of the bonus
award - and that the extra $1,500 per month for the parks job
came when the county couldn't find anyone else to fill it.
With 32 years of service, and a final year's salary of
$204,839, Riesenfeld's pension if he had retired at age 55
would be more than $131,000 annually. That estimate is based
on a formula of 2 percent of $204,839, multiplied by 32 years.
But with the final year salary boosted by the $20,000
bonus, plus $15,000 for 10 months as interim parks director,
plus a car allowance of $9,600 a year, and about $12,000 in
unused fringe benefits, his so-called "final pay" jumps to
$261,439, and his pension would climb to $167,320, given the
same formula.
In addition, because Riesenfeld waited until age 58 to
retire, instead of departing at 55, his estimated pension is
boosted from 62.33 percent to 72.58 percent of final pay, or
$190,000 annually - plus a yearly cost-of-living increase of
up to 4 percent - according to compensation tables published
by the Marin retirement program.
Riesenfeld said it is unfair to single out either him or
Marin County for "pension spiking," because such pension
calculations are standard practice in counties governed by a
state law adopted in 1937 that outlines regulations.
"What you're really talking about is, 'What's the
definition of final compensation, and who does that affect?' "
he said.
"It affects everyone," he added. "It's not peculiar to
the top job. Every department head gets a car allowance -
fringe benefits occur across the board, not just for
managers."
Although there is nothing improper about Riesenfeld's
pension calculation, some observers think those in public
service should avoid even the appearance of exploiting the
system.
"It drives me crazy," said Peter Scheer, executive
director of San Rafael-based California First Amendment
Coalition, a nonprofit public information and media advocacy
group. "We all pay taxes, and we know the schools need money
and services are struggling - then we see people in high-level
positions" getting extraordinary pensions.
Tale of tax-free benefits
Some pensions carry tax-free benefits when workers can
show that at least part of an injury resulted on the job.
Novato, part of the state CalPERS retirement system,
covers a $140,432 annual pension for former Police Chief Brian
Brady, a 36-year police veteran who delayed his retirement
three times over nine months - moves that boosted his annual
pension by $9,000. Half his pension is tax-free in light of a
service-connected shoulder injury.
Brady's pension represents 90 percent of his final
salary of $156,036 - a combination of $139,620 base pay,
$14,316 in longevity pay and $2,100 in "education
compensation."
This year, Novato will pay 46 percent of its safety
payroll for police pensions alone. That includes 37 percent as
the city's contribution, plus another 9 percent that the City
Council agreed to pay to cover what was supposed to be the
police officers' contribution.
Stricter rules
In Marin County's retirement program, if a worker's
illness or injury is even slightly attributable to the job, he
probably can qualify for a lucrative tax-free disability
pension.
Marin County Treasurer-Tax Collector Michael Smith said
he thinks there should be stricter rules.
"If you have a disability that's 10 percent job-related,
you shouldn't be able to get a 100-percent service-connected
disability pension," said Smith, a member of the county
retirement board.
Ann Gregory of Terra Linda, former president of the
Marin County Retired Employees Association, agrees. "I've
always thought that to get a disability retirement is a little
too easy," said Gregory, who retired in 1994 after 16 years
with the Marin County courts clerical department. "There ought
to be a higher standard of proof of disability - a lot of
people I know, it seems like they're not terribly disabled,
and they go on to other jobs."
In the Marin County retirement program, 254 people are
receiving service-connected disability pensions - including
three who receive more than $100,000 annually. One gets more
than $150,000 a year.
Since 2000, the county has averaged 27 new disability
applications a year. About half of those are from public
safety workers.
The average county disability pension pays $31,080
annually, tax-free.
Public not welcome
Service-connected disability pension applications are
reviewed every month by the board of the Marin County
Employees Retirement Association, a group dominated by public
employees and retirees who benefit from the system.
In June, the nine-member board voted to bar the public
from attending such pension reviews, saying disability cases
are private matters - even though taxpayer dollars are at
stake.
At the same meeting, the board handed former county
parks chief Fran Brigmann a disability retirement. Brigmann,
55, of Petaluma, earned $135,330 annually when she retired
after 23 years with the county and will get a tax-free pension
of more than $60,000 a year. The nature of her disability was
never disclosed.
Former Retirement Administrator Norman Klein, who
stepped down in January, has applied for a disability pension
as well. Klein, 58, of Petaluma, who earned $145,850 a year,
would be in line for an estimated $72,000 annual tax-free
disability pension. He has declined to state the nature of his
disability.
Brigmann and Klein follow a long line of employees in
line for disability pensions.
- Former Marin District Attorney Jerry Herman retired in
1998 at 61 with a disability pension of about $107,000, of
which $66,000 was tax-free. The disability claim stemmed from
a 1996 heart attack.
- Former Superior Court Commissioner Sylvia Shapiro
Pritchard was awarded a disability pension last year - but the
reason for it was never disclosed. Pritchard, whose final pay
was $113,090, worked for the county from January 1988 to June
2001. She receives an estimated annual pension of more than
$30,000, tax-free.
Until about six months ago, Shapiro Pritchard continued
to maintain a private law practice from an office in San
Rafael.
Although Pritchard, Herman, Brady and others on
disability pensions merely applied for what the rules allow,
the program irks critics - especially when retirees given
disability pensions wind up working elsewhere for another
paycheck.
"What upsets me is when people get a super pension,
tax-free, and then still, at a very young age, go off and get
another nice job, with a big salary," Scheer said.
Scheer, although not referring to specific incidents in
Marin, said such cases in general should be outlawed because
to him "they're morally and ethically wrong."
Public safety disabilities
Disability pensions are more common in police and
firefighter circles because of the nature of the jobs, said
Fairfax Police Chief Ken Hughes.
"By the time you're 50, most people have something
wrong," Hughes said. "The vast majority of these retirements
are documented and justified - by and large, they come with
the nature of the work."
In Fairfax, five officers have retired on disability
pensions in 19 years, including former Police Chief Walt
Potter, who claimed the stress of being chief in a small town
was too much.
Potter retired amid controversy in 1993 at the age of 48
and applied for a service-connected disability pension, saying
job stress contributed to his need for a hernia operation.
He was awarded a disability pension of more than $2,500
a month for the rest of his life - plus cost of living
increases. Later, he took a job as chief of security at a Lake
Tahoe ski resort.
Hughes noted cases like Potter's are within the legal
bounds of how the public pension system is set up - and there
is no impropriety about them.
"Stress is like any other illness or injury - it affects
different people differently," said Chief Hughes. "I do know
that stress that public safety personnel encounter in the
course of their work is something that's very real and it's
something that can have a detrimental effect on people."
At the same time, Fairfax taxpayers are footing an
increasingly hefty bill for police pensions. According to a
report from the Marin County civil grand jury, Fairfax will
pay a whopping 42.4 percent of its safety payroll this year
for police pensions - and the Town Council agreed to pay an
additional 9 percent of payroll the officers otherwise would
pay for their own pensions.
"They do that for all the employees," said Town Clerk
Judy Anderson. "In some places, the employees pay a portion of
their share for pensions, but here, the town pays it all."
The total pension tab in Fairfax's $5.7 million 2005-06
budget is $934,000, Anderson said.
So strapped was the town budget this year that officials
asked voters to approve an additional $125 municipal services
tax. That "special" municipal services tax will raise $465,000
this year and is in addition to a $50 municipal services tax.
Fairfax tax bills already include a special "pension
override tax" that is skyrocketing. The Fairfax pension
override tax, which cost taxpayers $436,300 in 2002-03, almost
doubled to $812,000 in 2004-05.
San Anselmo residents also pay a pension tax. The cost
to San Anselmo residents was $925,224 in 2002-03 and rose to
$1.13 million in 2004-05.
San Anselmo expects to contribute $1.85 million to
CalPERS this year to cover retirement benefits, up from $1.66
million in 2004-05, said Janet Pendoley, finance officer. "Our
PERS contribution rate in 2004-05 really took a huge leap from
2003-04, when it was $999,000," she said. "We hope that
they're leveling off now - it really depends on what happens
with the state and with pension reform."
Stricter requirements for disability retirements are
among reform proposals sought by the California State
Association of Counties, a group representing all 58 counties
in the state.
CSAC's reform plan is modest. It recommends outlawing
disability pension payments "for any period of time the
disabled employee participates in similar work with another
public agency."
Another proposal would tighten eligibility standards of
proof from "substantial" to "preponderance of evidence" that
the injury or illness was job related.
Since Gov. Arnold Schwarz-enegger backed off on his
plans to push pension reform this year, the future for reform
is uncertain.
"What comes out of this Legislature is yet to be seen,"
said Steve Keil, CSAC spokesman.
COUNTY PENSIONS AT A GLANCE
- If an employee retires at 55, he or she gets a pension
equal to 2 percent of final pay for every year of service. If
final pay was $100,000, and the employee worked for the county
for 30 years, the annual pension is $60,000.
- The county's annual pension payroll of $60 million
provides an average pension of $27,224 to 2,001 retirees, a
payment that increases 2 to 4 percent a year. Some 35 retirees
get pensions exceeding $100,000 a year.
- The Marin County pension program expects to pay $6.1
million this year for retiree health care. The money will come
from the pension fund, not the county budget.
- County taxpayers, through the program's public
agencies, must contribute annually to its $1.2 billion pension
fund to ensure enough money is available to pay current and
future retirees. This year, taxpayers will contribute $45.1
million into the fund - more than double the $20 million tab
in 1998.
THE PEOPLE WHO OVERSEE THE PENSION FUND
The members of the county's retirement board, who
oversee the pension program approved by supervisors, are
primarily retirees and employees who benefit from the system
they administer.
The board meets at 9 a.m. the second Wednesday in room
330 of the Marin Civic Center in San Rafael. Four members are
appointed by county supervisors; others are elected by
employee groups.
PETER ARRIGONI
Arrigoni, a former stockbroker, served on the Fairfax
Town Council, and as a Marin supervisor from 1969-1975, before
heading the Marin Builders Exchange. He was appointed to the
retirement board in 2002. He lives in Fairfax.
MAYA GLADSTERN
Gladstern is a senior systems support analyst in the
county Information Services and Technology Department, and has
been a full-time county employee since 1981. She was elected
to the retirement board in 2003. She has served as an employee
union officer. She lives in Woodacre.
ALLEN HAIM
Haim, former chief deputy Marin County Counsel, was
elected to the pension board as an alternate in 2002. He was
appointed in 2004. A San Rafael resident, he retired from the
county in 1999.
JIM HUFFORD
Hufford, a San Rafael fire captain, was elected to the
retirement board last year. A San Rafael Fire Department
member since 1980, he lives in Grass Valley.
MILBREY "CASEY" JONES
Jones, appointed in 1998, is president of the State
Association of County Retirement Systems. He is a partner in
hedge fund management firm, Salus Capital Management. He lives
in Belvedere.
CHARLES MCGLASHAN
McGlashan was elected as a Marin supervisor serving
Southern Marin last year. He was appointed earlier this month
to the retirement board to replace Supervisor Cynthia Murray,
who resigned. He lives in Mill Valley.
JIM PHILLIPS
Phillips, appointed in 1998, is an investment adviser
and portfolio manager. He co-founded Compass Rose Advisors,
Inc. in 1993. He lives in Mill Valley.
MICHAEL SMITH
Smith is Marin's elected treasurer-tax collector, and
serves as registrar of voters and county clerk. A 20-year
county employee, he lives in Novato.
JOSH THOMAS
Thomas, a former prosecutor in the district attorney's
office, was elected as an alternate to the retirement board
this year. He lives in Novato.
SANDY WHITE
White, a 25-year county employee, is an administrative
services officer in Human Resources. She was elected to the
retirement board in 2002. She lives in Novato.
.
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