By Chuck Reed
For those of us who follow news about California public pensions, the term ‘100K Club’ has become synonymous in recent days with the California Public Employees' Retirement System (CalPERS) due to new data released by Transparent California and analyzed by the Orange County Register. The records show that close to 22,000 California public retirees last year each received more than $100,000 in annual pension benefits. That’s a total of $2.7 billion from a system that’s already more than $100 billion short of being able to meet its pension obligations. It’s also an increase of 20,000 retirees since 2005 who collect such a large sum.
The California system is great at promising pensions, but it is a failure at properly funding those promises. The first domino fell in 1999, when the state legislature granted retroactive pension payments to retirees, and they have continued to fall since with taxpayers left to pick up the pieces. Those falling dominoes have taken CalPERS from a surplus to a pension debt of more than $100 billion in just 17 years. So while ‘100K Club’ may be on everyone’s lips when referring to CalPERS, I think the expression ’17 Years of Failure’ is more synonymous with the organization, and more appropriate.
And taxpayers are not happy. Since the release of the ‘100K Club’ data, Californian’s are voicing their opinions in opposition to paying for an unsustainable system that is wreaking havoc on California’s finances and will continue to do so for decades to come. As one taxpayer wrote to the Register, we’re robbing our children “who silently shoulder the costs and bear the burden of unfunded promises of these programs to enrich the old.”
Other taxpayers point out the discrepancy in the average annual CalPERS pension payment ($30,581) when compared to the average annual Social Security benefit for private workers ($16,092), as well as CalPERS’ use of a defined benefit plan in lieu of more financially responsible plans, such as defined contribution plans, that are favored by business.
“What this information does is remove the shroud that defines public pensions and lets people see what things cost,” Robert Fellner, research director for Transparent California, told the newspaper.
And in California, they cost a lot.
After 17 years of failure, after 17 years of overpromising pension benefits to government employees and underfunding our obligations to pension plans, it’s time to act. It's time for all California stakeholders to get engaged in finding a solution.