When state leaders approved major pension changes in 2012, they prevented public employees from counting many fringe benefits toward retirement income as they sought to reduce projected multibillion-dollar deficits for the state’s largest pension systems.
The thinking, in part, was that retirement income should be calculated from base salary, not add-ons intended to pay for items that help employees do their jobs.
But after the restrictions kicked in Jan. 1 for education workers, trustees for some of Sacramento’s largest school districts converted hefty superintendent allowances for vehicles and computers into base pay. The moves ensure that superintendents can still count the allowance amounts toward their pensions.
Pension critics say that runs counter to the intent of the law and new CalSTRS regulations.
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“For school districts to say, ‘We know what the (state) policy is, but we’re going to try our best to get around it,” is really not the right thing to do,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association. “It goes against the spirit of both state law and the standards set forth by the (Governmental Accounting Standards Board).”
Trustees at the Folsom Cordova, San Juan and Twin Rivers unified school districts have all voted this year to convert superintendent allowances into base pay, allowing the administrators to continue counting thousands of extra dollars toward their pensions.
San Juan trustees moved $16,000 in annual allowances into Superintendent Kent Kern’s base salary. Along with salary increases, that boosted his annual salary to $270,185.
At Twin Rivers, trustees converted a $10,000 car allowance into pay for Superintendent Steven Martinez, bringing his pay to $260,000.
That was part of her compensation package. Not allowing her to take that would be similar to decreasing her pension package.
Folsom Cordova Unified School District Board President Teresa Stanley on superintendent’s auto and technology allowance
And at Folsom Cordova, trustees voted to fold $7,200 in annual car and technology allowances into Superintendent Deborah Bettencourt’s base pay. Including raises, the shift boosted her annual pay to $245,769.
“The benefit that I saw in it, and the board, was that we could be a little more transparent about the overall package we were paying to the superintendent,” said Teresa Stanley, president of the Folsom Cordova board.
She said she didn’t see a problem with the superintendent continuing with a pension-related benefit she had long enjoyed.
“That was part of her compensation package,” Stanley said. “Not allowing her to take that would be similar to decreasing her pension package.”
In the San Juan district, spokesman Trent Allen said the district also has moved all compensation for most of Kern’s 12 Cabinet members into base pay for consistency among administrators.
“It should also be consistent with how we anticipate other districts will structure compensation given the new CalSTRS rules, making for easier comparisons of pay,” Allen said in an email. He said the added salary reduces take-home pay because of higher taxes and pension contribution requirements, “but it does count toward retirement calculations.”
Not all districts have moved to convert allowances into pay for administrators. At Natomas Unified School District, Superintendent Chris Evans will receive $10,000 this academic year to finance a retirement annuity and another $500 monthly for a car allowance, with both remaining outside base salary.
As of this year, those amounts are no longer part of his pension calculation.
“I really haven’t spent one ounce of time thinking about it,” Evans said when asked about the issue. He added that he would “look into it.”
In the Sacramento City Unified School District, Superintendent José Banda was hired in 2014, after the effective date of the California Public Employees’ Pension Reform Act of 2013.
His contract, which provides $290,000 a year, does not specify a regular cash allowance for technology or an automobile or other needs.