Fat Cat Public Pensions Being Cut

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By this time we should all be familiar with the stories about highly paid, sometimes excessively so, public officials retiring with multiple six figure pensions for life. Some of these officials are holders of elective public office, and some – like the poster child of pay and pension abuse Robert Rizzo, the City Manager of the City of Bell – appear to have manipulated the system to inflate their earnings and thus the base upon which their retirement is calculated.

These abuses have produced calls for complete overhauls of public pension systems to prevent such things from happening in the future, and have also raised the question of whether something can be done to curtail the abuses that are already in place. Now comes a Los Angeles Times story on August 8 headlined “State pension agency slashes benefits for top-paid officials.” A photo accompanying this story shows none other than Mr. Rizzo.

According to this story the California Public Employees Retirement System (CalPERS) has been quietly reviewing the retirement benefits of “scores of top-paid local government officials” and found that in 329 of the 2250 cases reviewed to date that granted retirement benefits need to be cut. Not only is Mr. Rizzo one of those cases, slated to have his retirement cut from $650,000 per year to $ 50,000 per year according to this Times story, but also slated for a cut is a former general manager of Orange County’s Serrano Water District. And, the municipal poster child of those decrying the cost of government pensions – the City of Vallejo – was found to have granted too high a pension benefit to its retired City Manager. That person is to see his retirement cut from $305,482 per year to a still comfortable $ 216,000 per year according to this story.

CalPERS is finding that some municipalities are reporting inaccurate and inflated earnings, thus driving up retirement benefits. In at least one case – a paid Doctor with the State Department of Social Services – it was discovered that he was not technically a State employee and thus there was no entitlement to any State retirement at all.

It is refreshing to see CalPERS plunging in to review these highly paid public sector employees who are receiving large retirement incomes. This shows that abuses can be identified and reversed (even though some who are receiving these cuts may challenge the process in court). Let’s hope this is just the start of a process to clean house, and assure that not one dime is paid out of public sector retirement systems that is not legally justified.