The Public Eye: New Sacramento schools chief in line for hefty pension bump

José L. Banda stands to receive an extra $61,400 annually in retirement for leaving Seattle Public Schools last month to become superintendent of the Sacramento City Unified School District.

If he completes his new three-year employment contract, he will increase his annual pension benefit to about $223,300, according to a Bee analysis reviewed by a financial planner who is expert in public school pensions.

That’s compared to the $161,900 annual pension he would have received at age 60 had he never re-entered the California State Teachers’ Retirement System after leaving the state in 2012 to run the Seattle school system.

Banda, 57, started his Sacramento job on Friday under a three-year contract that pays $290,000 a year. He replaced Jonathan Raymond, who left the district in December after four years, and Sara Noguchi, who served as interim superintendent after Raymond’s departure.

Banda, in an interview, said he is not thinking about his pension.

“There are so many serious challenges that Sacramento City Unified School District faces,” he said. “We’ve got issues with declining enrollment. We have a budget that still isn’t sound. We’re not able to move forward until we address the budget. We have a fractured relationship with the union. I’m really focused on that.”

Banda said he is committed to Sacramento and intends to finish his career here after tackling the issues he described.

“I think this whole thing around the pension is a detractor,” he added. “I’m focused on the work, what needs to be done, how I can help with my experiences and my background.

Banda, however, mentioned the subject in a June interview with Seattle radio station KUOW. In that conversation, Banda said he was interested in moving to Sacramento to be closer to his family – as well as pension considerations.

“As I near the latter part of my career,” he told KUOW, “it’s an opportunity to get back into the retirement system that I spent almost my entire career in.”

CalSTRS did not share Banda’s pension details, since he has not yet applied for retirement. But The Sacramento Bee calculated Banda’s pension benefit using CalSTRS’ basic formula, with guidance from Gregory Lucas, a Sacramento certified financial planner who advises many educators.

Banda spent 32 years as a California educator, most recently as superintendent of Anaheim City School District, before moving to Seattle.

If he had chosen to collect his pension at age 60 without ever returning to work in California, he would have been entitled to an annual benefit of 2.2 percent of $230,000 – his salary when he left Anaheim – multiplied by his 32 years of service. That equals $161,900 a year.

The results of that calculation change dramatically with Banda’s return, largely because the salary basis for his pension benefits increases to $290,000. Between that factor and three additional years of service, his annual pension goes to $223,300.

Patrick Kennedy, board president for the Sacramento City Unified School District, said trustees considered Banda’s qualifications for the job, not his pension benefits.

“When we went out and held all of our public meetings and got input, overwhelmingly the community said they wanted somebody with extensive educational experience and, particularly, California experience,” Kennedy said.

“If you’re going to get somebody with extensive California experience, their pension is going to be higher than for somebody from out of state.”

Banda noted that he has worked more than three decades in California schools.

“I have spent the majority of my career in California,” he said. “That’s a fact. I’m proud of having a career in California.”

Though CalSTRS does not share information about members still in the workforce, it did provide details for two superintendents retiring this year at comparably sized Sacramento-area districts but with fewer years of in-state service.

Glynn Thompson, 58, who left the San Juan Unified School District in January after investigators substantiated employee complaints of bullying, receives just under $125,000 annually after 29.5 years as a California educator.

Steven Ladd, 62, who will retire next month from his job as superintendent of the Elk Grove Unified School District, will collect $85,500 annually from CalSTRS for his 14.2 years as a California educator.

Jon Coupal, president of the Howard Jarvis Taxpayers Association, said the pension numbers “certainly reinforce the perception that California’s pension benefits far exceed the benefits given to public employees in other states. It’s quite real.”

Until public agencies shift from pensions with defined benefits to contribution-based plans like 401(k)s for new hires, he said, “we will continue to have not only structural deficiencies in our pension funds but you’ll have these outlier cases that shock the conscience of ordinary citizens.”

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