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State should consider retiring generous PERS benefits

Yes, you read it right — a Dec.17 story in the Union Democrat on Tuolumne County retirement pay.

Longtime public safety employees can retire at age 50 and — if they’ve worked for 30 years — will get 90 percent of their career-ending salaries every year for the rest of their lives.

The Board of Supervisors last week approved an ordinance adding jail deputies and probation officers to this so-called “3 percent at 50” plan, which thousands of patrol officers and firefighters around the state already enjoy.

Coincidentally, Chief Probation Officer Shirlee Juhl was honored by supervisors the same day for putting in more than 30 years.

That public gratitude will likely continue for a while longer: Juhl earns more than $100,000 a year, and now she’ll get 90 percent of that cash annually from now on.

Don’t get us wrong: Juhl has been an exemplary employee and capable leader in a job that is demanding and can be dangerous. In fact, peace officers, firefighters and other employees who put their lives on the line deserve superior benefits.

Still, as our economy declines, many people have been laid off and more are feeling lucky to even have a job. So more than a few readers must have done a double take on reading that some county employees may enjoy 90 percent of their working wages for 10, 20 or even 30 years or longer after retirement.

Where in the private sector can workers enjoy such benefits? And with its  finances these days ranging from precarious to bankrupt, how can government afford it?

Supervisors themselves said the deal was negotiated three years ago, and that there’s little that can be done now. Two board members, Teri Murrison and Paolo Maffei, said such benefits are needed if the county is to attract and retain qualified employees.

County Administrator Craig Pedro confirmed hat the county was able to fill a number of important and long-vacant jobs in the Sheriff’s Office when benefits were increased. He added that 111 county employees are under the 3 percent-50 formula, a small fraction of the county permanent workforce of 788. A yet smaller amount would ever work long enough to collect the 90 percent benefit.

Only Supervisor Mark Thornton, leaving the board after 12 years in office, looked askance at the benefits. “Enjoy it, because it’s not going to last,” he warned. “I don’t think the state can maintain this system for another 10 years.”

He was talking about the Calfornia Public Employees Retirement System. CalPERS is itself a huge bureaucracy, with 2,300 employees, a 2008-09 budget of $332 million and responsibility for managing retirement and health benefits for some 4 million state, county, city and other public agency workers.

The agency paid out more than $16 billion in health and retirement benefits in fiscal year 2007-08.

With its investments then booming, CalPERS in 1999 negotiated the 3 percent-50 deal with then-governor Gray Davis. Many local governments climbed on board.

Briefly, the 3 percent-50 formula states that for every year eligible employees work, they earn 3 percent of their salary toward retirement, and can begin reaping the benefits when they turn 50. The maximum allowed is 90 percent.

The deal has turned out to be something of an economic time bomb: CalPERS investments, which once totaled $260 billion and covered the lion’s share of retirement payments, have plunged to $193 billion. Because the agency is less able to pay, local and state governments must now cover a larger share of workers’ retirement.
 

Some local governments are negotiating reduced benefits or increased employee payments in these hard times. And, depending on the economy, Pedro said Tuolumne County may have to do the same.

But, as Thornton intimated, the real solution is at the state level.

As huge a bureaucracy as it might be, CalPERS needs to join the administration in adapting to our current economic times and moving benefits enjoyed by public employees at least a little closer to those received by the rest if us.


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