Revamping Public Pensions: Public retirement is the taxpayers' business

Why are the pensions of retired government workers the public's business?

Because taxpayers pay for the retirements through employer contributions to the retirement funds. When investment returns drop, as they have over the last couple of years, the public agency employer has to bump its contributions, sometimes at the expense of current services.

With names and pension amounts, it is possible to identify "spiking" -- cases where people receive more per month in retirement than they did while they were working. This is a small fraction of the total retirees, but they demonstrate a serious problem in the pension system that should be corrected.

How are pensions spiked or inflated? Typically by adding accumulated sick leave, unused vacation and comp time into the final year's salary, which is used to set pension amounts.

It's tempting to be angry at the individuals receiving these extravagant pensions, but they're only taking advantage of a flawed system. It's up to the employers -- be it county government or some other agency -- to put a stop to spiking practices.

Many of those receiving high pensions are retired from law enforcement jobs, and some are angry at The Bee at pushing for public release of these figures. They point out that they worked hard for their pensions. We agree, and we appreciate their efforts.

But we don't believe that foregoing sick leave for several years should translate into dramatically higher pensions for life.

Many of the others in the $100,000-plus pension list held executive positions, which means they were in positions to negotiate the labor contracts that have contributed to the unsustainable pension system.

Under "me-too" clauses, the executives benefit from the same provisions they negotiate for others. As we've said before, there's little or no incentive for restraint. That's why elected officials need to take responsibility for bringing pensions under control.

Pension spiking can be contained by basing retirement amounts on the average of the last three years' income and paying for unused vacation, sick or comp time in cash rather than allowing it to permanently inflate pension amounts.

It is worth noting that while about four dozen retirees will receive $100,000 or more in 2009, the average pension for the 2,700 retirees covered by StanCERA is about $25,600 a year. That seems reasonable to us, and we've never been interested in publicizing the pension income of the average retiree.