The California Public Employees’ Retirement System board needs to stop.
The board is preparing to approve rules today affecting employees who have been hired by local governments since 2013, after Gov. Jerry Brown pushed what he said was a pension reform intended to rein in the cost of pensions and end spiking for new employees.
The CalPERS staff cannot say whether the new regulations will increase costs or lower them. A staff report issued in April offered a vague analysis that there could be savings. We heard such comments in 1999 when the CalPERS staff declared the state could increase pensions at no cost to taxpayers. That didn’t work out well.
Our guess is that costs won’t be dropping. Most public employee unions are urging support or asking the board to go further. That’s their job. They’re supposed to work hard to get the most for their members. Elk Grove, Beverly Hills and many other cities are asking the board to reject the regulations.
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The League of California Cities pointed out in a letter that CalPERS is preparing to impose “major pension rate increases” on local governments, and warned the proposal “could increase these already burdening costs unless supported by strict actuarial analysis and standards.”
The issue involves whether “pensionable compensation” is a job’s base pay for new employees, or normal monthly pay, which can include pay for one of nearly 100 bonuses that civil servants might receive.
Some seem reasonable. Most seem like they’re a basic part of the job. A newly hired cop might receive more monthly pay for being a detective or a canine officer. The question is whether the extra compensation should count toward pensions for employees hired after the new law took effect.
Being a detective might be worthy of more base pay and a larger pension. But the number of add-ons is surprisingly long. Officers could get more if they are physically fit or a good shot. Shouldn’t all cops be fit and shoot straight?
Officers could get higher pensions if they are assigned to Drug Abuse Resistance Education programs in schools, regularly enforce laws against drunken driving and drugs, find fugitives, fight gangs, direct traffic or work at the front desks at jails.
Newly hired firefighters would qualify for bigger pensions for inspecting buildings for fire-code compliance, investigating causes of fires or if they are “assigned to administrative work during normal hours of employment.”
There could be a premium for being pilots, which sounds reasonable. There also are premiums for librarians whose job includes telling patrons where to find resources. We love librarians. But isn’t assisting patrons fundamental to what librarians do?
There could be premiums for employees “assigned to mix, transport and/or apply a tar-like substance for sidewalks, roads, roofs and/or parking lots”; who are “consistently assigned to finish cement work”; who operate audio-visual equipment; or who can take shorthand and dictation, and type quickly.
Brown sent a letter urging the board to reject a part of the proposal that would allow higher pay from temporary promotions to be counted toward pensions. That’s important, but a only a half-step.
With great fanfare, Brown and the Legislature approved a pension overhaul in 2012 that was supposed to reduce the cost of pensions for new employees. By counting so many premiums, however, CalPERS would be stepping back from that commitment, and sanctioning spiking by another name.