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The Public Policy
The Gold Plated Years
A new focus on public employee pensions.
California is a land of contrasts. For example, take the fact that its teachers are among the nation’s best paid in the nation, while its student test scores are among the lowest. That’s a story for another day. The focus of this article is on what those salaries mean in terms of pensions. The number of retired teachers receiving more than $100,000 a year in pensions payments has increased by 76 per cent since 2009!
In 2009, 3,010 retired teachers were receiving $100,000 or more. It is now 5,308. Another 19,503 are receiving between $75,000 and $99,999 a year, according to the California Foundation for Fiscal Responsibility, a non-profit, non-partisan organization. What’s causing this? The generous pay scale for teachers in the state translates into higher pensions paid out through CalSTRS, the California Teachers Retirement System. It, along with CALPERS, the California Public Employees Retirement System, commands a very large investment fund and often weighs in on governance issues of major corporations.
People in both categories do very well in the Golden State because their unions have invested years of time and a large and steady flow of money into the campaign accounts of legislators (nearly all of them Democrats) to insure favorable treatment in the halls of Sacramento.
Again this year, though the public retirement systems beg for reform, the legislature did nothing; instead, passing a budget with the usual gimcrack accounting as to expenses and wishful thinking as to revenue.
Meanwhile, a report from the Congressional Research Office requested by Sen. Tom Coburn (R-OK) reveals that 77,057 federal employees are paid more than the governors of their states. (The CRO reviewed 2009 data.) Sen. Coburn had this to say about the news: “The pay gap between governors and federal employees should prompt Congress to take a closer look at federal salaries.… With our debt and deficits spiraling out of control, now is the time to ask agencies… to do more with less.”
In California, where the governor’s salary was $212,179 (and then-Governor Schwarzenegger took no pay that year), there were 703 federal workers earning more than that.
Nationally, a number of the highly paid federal workers were physicians or air traffic controllers; however, there were also 271 environmental protection “specialists,” 122 park rangers, 45 social workers, 21 archaeologists, 14 chaplains, three sociologists, four food-service workers and five civil rights analysts — all making more than the governors in the states in which they worked.
A spokeswoman for the American Federation of Government Employees fired back with a so’s-your-old-man argument, to wit: Some government contractors are allowed to be reimbursed for up to $693,000 for the combined salaries of their top five executives. She forgot to mention that the government is not responsible for the pensions or overhead of the contractors, but when you’re defending a cluster of gold-plated salaries (with gold-plated pensions to follow, in due course), any argument is worth pushing.
About the Author
Peter Hannaford was closely associated for a number of years with the late President Reagan, beginning in the California Governor’s office. His latest book is Presidential Retreats.
Letter to the Editor View all comments (22) | Leave a comment
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Darin| 8.1.11 @ 7:04AM
While it's true that government pensions from the past may be large, is that still the case for federal government employees? The Thrift Savings Plan (TSP) has been in place for several years (at least in DoD). It operates similiar to a 401(k) where you contribute a percentage of your pay to investments funds you select. Like commercial companies, the government can match (up to 3%). You can contribute more, but it is not matched. I don't know if all federal agencies are doing this, but DoD. It's a defined contribution plan, not defined benefit. And you can choose not to join.
Patrick| 8.1.11 @ 3:17PM
Feds don't pay into the SS ponzi scheme.
wukong| 8.1.11 @ 3:41PM
I can't speak for all federal workers, but I can assure you that active duty military do.
Cookie Sewell| 8.1.11 @ 3:43PM
Wrong answer. Under the Civil Service Retirement System no SS is collected, but under the Federal Employee Retirement System it is.
FERS pensions are based on about 1% of your income times years served PLUS Social Security (if you qualify) PLUS TSP payments and withdrawals. It's not all that hot.
AMPSOne (who officially retirees under FERS as of this morning)
Stuart Koehl| 8.1.11 @ 4:47PM
Under the old Civil Service Pension System, they did not (they do pay Medicare taxes), but very few Federal employees working under that system. Under the new Federal Employee Retirement System (FERS), they do pay Social Security taxes, as well as contributing to a defined contribution plan. They can also participate in a Thrift Savings Plan. Overall, the retirement plans most Federal Civil Service employees are quite modest as compared to government employees at the state and local level. My parents, who are retired New York City employees, enjoy benefits far in excess of anything my wife, a Federal employee, will receive.
Bob K.| 8.1.11 @ 8:21AM
I think that it becomes a defined contribution after the 1st 3 percent (a defined benefit) which in government is typically based on an average of the last 3 years salary times a multiplier determined by the number of years worked.
The longer you work and the more the rate of inflation during that period will increase the average of those last 3 years.
Denver Todd| 8.1.11 @ 8:22AM
My father, a retired California school teacher, gets around $1650 monthly from CALSTRS. If he received anywhere near your example, his life would be a lot more comfortable than it is now.
Bob K.| 8.1.11 @ 1:52PM
If his pension is a typical state pension it would depend on when he retired, how many years he worked and what his average salary was for his last 3 years of employment. People who retired 1o or more years ago have lower pensions than recent retirees.
cowgirl| 8.1.11 @ 10:44AM
The stupid state is broke. No one in the government wants to admit it. In doing so, they would have to admit that liberalism is truly an hopeless adventure. Soon there will be no more money as California will be unable to print any - they are not the Feds - and there will be no longer an issue of public pensions and they will no longer exist. A crying shame for those who depend on them, but reality will bite and bite soon.
Slacker| 8.1.11 @ 11:33AM
I sometimes wonder why private sector workers remain friendly with their government counterparts. There may not be much we can do about their gold plated compensation but, why do we associate with these leaches? The thieving scoundrels should be stigmatized.
Bob K.| 8.1.11 @ 1:57PM
It's changing. Around here Federal Retirees keep to themselves and socialize together. DOD retirees from a local Depot can even use the PX there and they do.
It is becoming the same for School Teachers too. Word gets around. I've been in a couple of neighborhood bars enjoying a beer and seen retired teachers getting razed. They go other places now.
Bernfp| 8.1.11 @ 11:53AM
One way out of the mess is to put all government employees on the cash basis. Don't promise anything in the future, don't hide behind gimmicks. Pay (for example) an average of $100,000 cash to each teacher. That's the sum total of my obligation to that teacher, now and forever. If they want to spend it all, be my guest. If they want to buy gold plated insurance, have at it. If they want to save for the future - it's up to them. They are not children and I am not their father. They want to sell their service - I buy it if it meets my needs and another is not offering it at a more attractive price.
tsd| 8.1.11 @ 12:48PM
You have to ask yourself, who was sleeping all the time this corruption was going on? How much longer do you think it can keep up? When will we make it end or when will it implode on it's own? So far the private sector is huffing and puffing (me included), but we are having almost no push back taking place. If you think the 15 trillion in debt is all we have to worry about, think about the 80 trillion in unfunded liability!!
Patrick| 8.1.11 @ 3:20PM
Well, Wisconsin is slowly waking up.
Joe D.| 8.1.11 @ 12:54PM
Once again, I and others are saying their is plenty of fat to cut. Lower not raise the debt ceiling.
Tina B| 8.1.11 @ 4:59PM
Gosh I hope that those of you who don't want to have a drink with me when I retire, in 9 weeks, don't waste your discretionary funds on liberal Hollywood's films or man-child professional sports in which participants (employees of the private sector I reckon) get fat off of you.
For 30 years I have worked many long hours and weekends, over and above my workda. I have cried with parents and their children, as well as on the way home from school. I worked hard and made As in all my college math courses including calc and I've mastered a lot of techno. For this I have earned an average of $40 to $45,000 per year, requiring me to work most summers to feed the fam.
I have had good insurance, but never needed doctors much. For more than 10 years I sponsored all 5 of our middle school yearly dances, where I sold sodas and pizzas until 10 pm, and got home between 11 and 12:30 on those Friday nights. I'd round up enough chaperones to keep everyones hands to themselves all evening. (I hope) And I did this to offset the costs of the yearbooks that I produced, some years by myself, to record our schools history in a quality publication. Then I marketed it. One year it was a $14,000 anniversary edition. What a job that was. My job was teaching math, and doing everything else as well.
If you don't want to share a drink with me, guys, that's cool. Everyone in my local area is just the opposite. If I go into one local pub, half the people in there already ask to buy me a drink, and would probably buy me dinner if I let them. They respect me, they know my passion was their children and their kids did well with me. Even the parents of those who struggled thank me for all my love and effort. I'm glad I don't live where you guys do. Then again, if you knew me, you might not have made that generalization.
My Florida retirement is a pittance compared to those California retirees, and I have earned every penny. I can't afford insurance so I will try to stay healthy. I walk away from public schools with my head high.
I fully expect to hear "Well done, good and faithful servant. . ." from my Lord and Savior.
Bob K.| 8.1.11 @ 7:57PM
All of the great teacher pensions written about here were negotiated by teacher's unions with compliant school boards and politicians they supported with big contributions. In many states these Unions make big contributions to the re-election campaigns of elected officials who support them and to the opponents of those who do not support them to get compliant legislation. In some states many of them run for the legislature after they retire and the electors are dumb enough to elect them.
Apparently you did not have this union representation. In most states in the Northeastern US school teacher's with 30 years experience make $55,000.00 and upwards a year PLUS benefits. Not bad for 9 months work. When they retire their pensions are over $40,000.00 a year PLUS benefits and Social Security when they qualify. Not bad when your kids are grown and your bills are lower, wouldn't you agree?
Pat| 8.1.11 @ 6:10PM
You’re a Californian and you’re stupid! Ouch, that was supposed to hurt. But, what most non-Californian readers don’t realize is that we actually see ourselves as people who happen to live in California, for the present moment that is. Gov. Arnold Schwarzenegger – if the name didn’t give it away - was not born here in the Golden State, his first loyalties weren’t to Yosemite or Disneyland – just like most of us. So, yes, our state government finances are deplorable, our politicians very familiar with the term “self-serving”. Our populace is also heavily immigrant, the legal kind and the “other”. Civil service jobs are the gold standard in immigrant employment opportunities, the Mecca and Medina of the typical English as a second language Californian.
Don’t believe it, try calling Sacramento to straighten out your latest mess with our state’s government. Sure, you’ll speak to someone with a made up name like Jim or Mary, but this loyal American has an accent thicker than Ahh-nold’s.
So, take the hint and realize Californians aren’t that stupid for the most part, they’re crafty. Voters, not paying businesses, is what California creates in abundance. And voters who will definitely vote Obama in 2012. Disgusting, maybe. But it’s your federal tax dollars which will keep California from going down the plumbing in the coming years. Call them stupid, call them irresponsible but California’s politicians will be crying all the way to the bank.
Tina B| 8.1.11 @ 6:22PM
AAAAAAAAAAAAGGGGGGGGGGHHHHHHH!!!
Marc Jeric| 8.1.11 @ 6:49PM
All government emoyees unions are by definition criminal enterprises against the people - and should therefore be routinely prosecuted under the RICO Act laws.
Jessie| 8.2.11 @ 2:37AM
I've been in a couple of neighborhood bars enjoying a beer and seen retired teachers getting razed. They go other places now.
http://www.summer-products.com
POST American| 8.3.11 @ 12:02AM
----------------------AGAIN-----------------------
AS we're being brought into receivership,
and as the RED Chinese have not only been
handed our economy, but bases on BOTH
coasts, plus the Panama Canal --and NOW
the 'first of several' 50 square miles of
American heartland (south of Boise) as
sovereign RED Chinese territory-----
COUNT ON eating those 'Golden Years'
dinners in a FEMA camp ---with chopsticks.
Since you REFUSE to address those 4 decades
of deliberate sellout and TREASON
----------------------IT'S COMING---------------------