Editor’s note (Jan. 8): This story has been corrected.
Thirteen local government employees in the capital region received lump-sum payments of more than $100,000 in 2014, The Sacramento Bee found in an analysis of data from the State Controller’s Office. The analysis included city and county governments in Sacramento, El Dorado, Placer and Yolo counties and did not include special districts.
The payments provide a big boost to an employee’s final-year salary. In Sacramento County, some employees can count up to 40 hours of vacation payout toward their pensions, also increasing retirement pay by a small amount.
Lump-sum payments include separation settlements, such as the $178,000 Jim Estep received when he agreed to step down as city manager in Lincoln.
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More typically, they come from unused vacation and sick time, which gave Estep another $135,000, bringing his annual income to $470,000 for less than eight months of work and making him the highest paid local government official in the region.
The lump-sum pay did not factor into Estep’s pension, according to CalPERS spokeswoman Amy Morgan.
Lump-sum payments totaled $31 million in the region, The Bee analysis found.
Sixteen of the 20 highest lump-sum payments in the region were made to Sacramento County employees. Sacramento County has far more employees than any other local government in the area, but critics have also complained that it has excessive benefits, particularly for law enforcement. All but two of the county employees receiving the highest lump-sum payments worked in law enforcement.
Upon retirement, county employees receive cash payments for accrued benefits. The highest payments, by far, were for unused sick time, with three employees receiving accrued sick-time payments of more than $100,000, and several others receiving payments of $60,000 to $98,000.
For Sacramento County retirees, only a small percentage of their lump-sum payments can count toward their pensions. Sacramento County operates a vacation buyback program that allows some longtime employees to cash out 40 hours of accrued vacation each year, and the Sacramento County Retirement System adds that to base pay when calculating pensions, according to SCRS CEO Richard Stensrud.
Correction: An earlier version of this story and its headline incorrectly suggested that large cashouts beyond $100,000 boosted pensions for local government retirees by significant amounts. As this version notes, CalPERS did not include any lump-sum pay for former Lincoln City Manager Jim Estep or former El Dorado County Counsel Edward L. Knapp when calculating their pensions, according to CalPERS spokeswoman Amy Morgan.
The 16 Sacramento County employees referenced in the story, including eight named in the chart, were able to count a maximum of 40 hours of vacation time toward their pensions, increasing their retirement pay by a smaller amount than previously suggested.