Cooley as pension-reform poster boy
May 26, 2010
MAY 26, 2010
By ANTHONY PIGNATARO
Recent news reports have mentioned our state public employee pension liabilities topping half a trillion dollars. This is an astronomical figure, but one that’s pretty hard for most people to understand. One easy way to make it easy to comprehend is to talk about one particular public employee who’s contributed to that liability – in this case, Los Angeles County District Attorney and Republican state Attorney General candidate Steve Cooley.
Much of the following is based on estimates that come from CalPERS and other government pension plans, but we do know – because the LA County Board of Supervisors approved it in 2008 – that Cooley currently makes $292,300 per year. We also know that the LA County pension formula for public safety personnel is 2.62 percent at 60. Put simply, Cooley (who’s worked for the county since 1974) could retire at 60 (he’s 63) making 94.32 percent (2.62 multiplied by 36 years of service) of his salary. That total — $275,697 – is Cooley’s annual DA pension.
Of course, his retirement pay may actually be higher. Cooley campaign spokesman Kevin Spillane didn’t return a phone call for comment by press time, but it’s possible to estimate some aspects of how much money Cooley will actually get when he finally retires as DA.
“Typically folks cash out their final year vacation and compensatory time off, and it’s added to final pay,” said Marcia Fritz, a certified public accountant and pension reform activist in Citrus Heights. “LA County’s CAFR [Comprehensive Annual Financial Report] indicates annual accruals are 20 days of vacation and 12 days of sick leave, plus he also gets to cash out management compensatory time off, generally 120 hours a year. He likely will cash out much more but pension rules limit what is included in final pay to one year’s accrual.”
To find out how much Cooley will actually collect in benefits, let’s say he retires this year, at age 63. Social Security Administration actuarial figures show that employees who retire at that age typically collect benefits for 18 years. Given Cooley’s annual benefit, that’s about $4.9 million.
Now we don’t know how much Cooley has actually contributed to his pension, but estimates provided by CalPERS indicates that it’s probably insignificant when compared to the taxpayer-backed benefits he’ll receive. CalPERS estimates that most public employees give between 5 percent to 7 percent of their salary to their pension. Erring on the side of generosity, let’s say that Cooley’s average salary over his 36 years of LA County service (we’ll ignore the five years he spent as a reserve office with the Los Angeles Police Department) came to $150,000. Contributing 7 percent of that average each year comes to just $378,000 – a tiny fraction of his total benefit payout.
Did we mention he can double dip, too? Currently, the AG earns $151,127 a year. When added to his $275,697 annual pension, that adds up to $426,824.
Now usually, employees who retire under CalPERS can’t then turn around and start working at another state job while still earning their pension. But Cooley’s DA pension is under the LA County system, whereas if he gets elected attorney general his new state pension will fall under the CalPERS system.
But an interesting quirk about CalPERS is that even if Cooley was under that pension management system when he got elected AG, it would still be legal for him to collect both his retirement and his salary. That’s because CalPERS has a special exemption for elected officials who get elected to different elected offices.
“[Y]ou can serve in an elective office without effect on your retirement allowance unless all or a portion of your retirement allowance is based on previous service in the same elected office,” notes the CalPERS publication Employment After Retirement.
So far, Cooley’s pension – and the larger issue of pension reform — has gotten virtually no traction in the AG’s race, though one small exception is Orange County Republican pundit Hugh Hewitt. On April 14 of this year he sent out a Twitter message saying, “When he reitres [sic], Steve Cooley, AG candidate, will collect $275K a year in taxpayer pension for the rest of his life. Issue?”
So far, it’s not.