To paraphrase James Madison, “A popular government without public information is but a prologue to a farce or tragedy, or both.” Unfortunately, the Ventura County Taxpayers Association (VCTA) has learned that the prologue is over; the system that awards extravagant salaries and pensions is a farce.
As part of its ongoing review of the county pension system, the VCTA asked the Ventura County Employees Retirement Association (VCERA), through the California Public Records Act, to release information on all retirees who receive more than $100,000 in annual pension payments. While VCERA was forthcoming with most of the information requested, the names of the recipients were omitted. Several retirement systems, such as Marin, Santa Barbara and Orange counties, have released the names of recipients. In fact, the state-run CalPERS pension system, responsible for the pension programs for all the local city pension programs, has similarly released the names of the recipients.
The VCTA’s follow-up request for the names was denied. At VCERA’s Sept. 13 meeting, VCTA’s request was agendized. Following a statement by the VCTA to the board, VCERA refused the request on a 6-3 vote. The majority sited their preference to wait for a Sacramento appellate court’s possible reversal of a lower court’s decision to release Sacramento County pensioners’ names. The VCTA disagreed with the delay.
The VCTA was disappointed VCERA did not follow the lead of other agencies, preferring transparency over secrecy. On Sept. 15 VCTA filed suit to force VCERA to release the names of pension recipients.
The predominant retirement system available to government employees is the “defined benefit” system wherein the government guarantees the pension amount based on salary, years of service and other factors. The total risk of paying the pension belongs with the government agency. When (not if) the investment market performs below its projections, the government agency must make up the shortfall, regardless of whether or not enough money has been socked away over the previous years. The existing defined benefit plan is broken, with an unfunded liability exceeding $573 million. Studies prepared by the county’s own auditors show that even with high future returns in the stock market, taxpayer contributions to the pension fund will have to increase by at least 50 percent per year over the next five years. That’s hundreds of millions of dollars not available to fill potholes, run the libraries or care for the sick and aging.
Within the framework of the current system, “defined benefit,” the practice of pension spiking is rampant, greatly increasing the cost of the retirement plan to the taxpayers. Public employees, including management, are inflating their salaries with “add-ons” in their last year of employment by selling back vacation and/or pumping up their scheduled overtime hours, to name a few popular strategies. By gaming the system, most retirees with annual pensions of more than $100,000 are making more in retirement than their last year base salary. According to released data, 14 pension recipients in Ventura County receive in excess of $200,000 annually. All but one are now paid more in retirement (for life, with cost of living adjustments) than they received in base salary during their final year with the county.
Taxpayers have a right to know the names and faces of the recipients. Taxpayers also have a right to demand that the county make changes to the current retirement program and eliminate this abusive spiking of pensions. For this reason, the VCTA supports the introduction of a “defined contribution” plan, predominant in the private sector. Under a defined contribution plan, the county would contribute an amount annually to a pension fund, with no guarantee of benefits resulting from the investment of the funds. The VCTA also supports the elimination of all the “add-ons” that make it possible to spike pensions. The system is being abused. Taxpayers should not have to pay government employees more in retirement than their base salary while they were employed.
The time has come for true transparency. If the public is ever to trust government, it must stop concealing information or spoon-feeding it to the taxpayers on the government’s terms. Every city in the county has revealed the details of pension recipients. The county has revealed the names of the more than 2,000 employees who currently make more than $100,000 per year. VCERA needs to stop clinging to secrecy. Hard-working citizens are entitled to know what the county is doing with their money. This public information needs to be released.
David Grau is board member of the Ventura County Tax Payers Association.