CalPERS’ $100K club increases 900%

by John Seiler | October 22, 2014 10:28 am

Let the good times roll! for those getting pensions from the California Public Employees Retirement System, anyway.

The Register reported[1]:

Back in 2005, some 1,841 retirees pulled down more than $100,000 a year in pension checks from the California Public Employees’ Retirement System.

By 2009, this so-called “$100K club” had more than tripled, to 6,133 members.

And by the end of 2013, membership had nearly tripled again, to 16,838, according to data from CalPERS.

We’re talking growth in excess of 900 percent in just eight years, and no one expects the $100K club to stop growing any time soon.

This may give Joe Citizen an idea of why public pensions threaten to be an albatross around the necks of California governments (and, by extension, the necks of Joe Citizens themselves) – and why the question of whether public pension formulas are set in stone, or can be reduced, is so bitterly debated.

“The $100K club – it’s just not sustainable,” said San Jose Mayor Chuck Reed, a Democrat fighting to get a pension reform initiative on the 2016 ballot.

“On the public safety side, the average pension for people who have retired in the last four to five years is over $100,000. That’s not extraordinary – that’s average,” Reed said.

However, his reform will not reduce existing pensions, only those going forward. Assuming voters even pass it.

And assuming the language of the initiative isn’t sabotaged again, as it was earlier this year[2] by Attorney General Kamala Harris.

But the real problem is that the state’s taxpayers, already strangulated by the country’s highest taxes[3], and with the highest poverty rate[4], can’t afford these Rolls-Royce pensions.

The next recession will tank state and local budgets the same way as the Dot-Com bust of 1999-2000 and the recent Great Recession. When that happens, as Reed has joked, budgets will be cut so much cities will be reduced to employing a single person — the one who writes the pension checks.

Bottom line: The pensions, including existing pensions, will be cut no matter what. There just isn’t enough money to pay them and hasn’t been since the pension-spiking binge during the Dot-Com boom 15 years ago.

Source URL: https://calwatchdog.com/2014/10/22/calpers-100k-club-increases-900/

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