On The Money: Pension Spiking?
Highest Paid Take Advantage, State Treasurer Says
By Mike Luery
Hundreds of government managers in San Joaquin County are getting an expensive perk that frontline workers do not have. Critics say that perk is costing taxpayers millions of dollars.
Rank and file San Joaquin County workers want to know why elected officials on the Board of Supervisors - and other top level government executives are getting a cash payout that critics say serves to pad their pensions.
"For me being a taxpayer, I'm helping them put food on their table, when they should be helping me put food on my table," said Rick Mendoza, a park maintenance worker for the county.
San Joaquin had to lay off 200 workers in the recession, yet the county allows some 250 government managers to get a cash payout – in lieu of health care benefits.
The payout comes to $29,000 a year, per person. So when those managers retire, their pensions are higher by as much as 25 percent, as noted in this document provided by Service Employees International Union (SEIU).
"It's classic pension spiking," stated Bill Lockyer. The State Treasurer told CBS 13 in an exclusive interview, insisting the San Joaquin plan is an abuse of the system:
"It's the highest paid people in the system that are taking advantage. And I think that's particularly egregious and needs to stop," he stated.
Critics say that advantage is costing taxpayers about $10 million a year.
"It shortchanges the taxpayer," said Pat Ikeda. The SEIU president for local 1021 told CBS 13, "It provides a benefit that feeds a Wall Street mentality for those very managers and special folks."
Jo Baker-Warren, a union shop steward added, "And those guys at the top are pocketing that money. That's where I find the abuse to be a problem."
Rank and file union members say they don't have the option of getting a cash payout.
"It's definitely an abuse of the system because it's been going on a while, and we've been asking them to look at it," said Angela Radford, another shop steward with Service Employees International Union. "They're asking us to take cuts," she added.
But the county's top executive sees it differently.
"It's not pension spiking," said Manuel Lopez. The San Joaquin County Administrator told CBS 13 the cash payout option for managers is essential for attracting the very best workers, who otherwise might go elsewhere.
"When we hire somebody there's a commitment there to provide that individual with that salary and those benefits," Lopez stated. He added, "And we need to keep that commitment - otherwise who would work for us?"
"We look at the total compensation of each one of those positions and compare it to a number of counties – 10 counties to be specific – and that's how we determine what the total compensation is for that individual." Lopez stated.
But frontline workers say the real issue is fairness.
"They should have the same health plan as we have," said Joe DeMent, a San Joaquin County park maintenance worker.
State Treasurer Bill Lockyer has asked California lawmakers to take a critical look at San Joaquin's controversial payout plan.
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