Saturday, May 14, 2016

Transparent California: How the City of Fresno Dodged the Pension Tsunami - Providing Comfortable, but not Exorbitant Benefits

(Mod: You probably can't tell Sierra Madre, Arcadia or Pasadena, all of whom are upside down with millions of dollars in unfunded CalPERS pension debt, but it is possible to avoid such pain. Here Transparent California's Robert Fellner breaks it down for us.)

Transparent California has now released 2015 pension payout data from the City of Fresno Retirement Systems (CFRS) — the first time this information has ever been made available to the public. The CFRS is the only major California public pension plan with a funded ratio over 100 percent and, consequently, enjoys a $289 million surplus rather than contributing to the state’s approximately $300 billion in combined unfunded liabilities.

As a result, the City of Fresno has avoided the pension crisis currently sweeping the state — which is forcing many governments to hike taxes and reduce government services as they spend a growing percentage of their budget on pension debt.

The reason for the unique success of the CFRS is simple: they promised only what they could afford to pay for, according to Transparent California’s research director Robert Fellner.

“While most public pension plans offer exorbitant benefits without accounting for their cost, the CFRS consistently maintained benefits at an affordable level.”

The CFRS consists of two separate plans: the Fresno Police and Fire Retirement System serves safety employees and the Fresno Employees’ Retirement System covers non-safety employees.

The data reveals the average pension for a full-career retiree of the Fresno Police and Fire Retirement System was $70,627, while the average full-career retiree of the Fresno Employees’ Retirement System received $39,644.

Fresno County

At only 76 percent funded and with nearly $1 billion in unfunded pension liabilities, the Fresno County Employees’ Retirement Association (FCERA) is more representative of the precarious situation most California governments are facing.

Fellner believes the dramatic difference between the fiscal health of the CFRS and FCERA can be understood by comparing the average pensions for each plan: The average $61,513 pension received by full-career, non-safety FCERA retirees was over 50 percent more than the $39,644 that Fresno City retirees received, according to just-released 2015 FCERA data posted on TransparentCalifornia.com.

“Naturally, there is a direct correlation between a pension plan’s richness and the cost to taxpayers.

Fresno County will spend a staggering 52 percent of pay on retirement benefits, which is over triple the 16 percent rate that Fresno City pays, and over 17 times more than the 3 percent that the median private employer spends on employees’ retirement accounts.

“Unlike the inflated pensions found in Fresno County and most California governments, pensions at the City of Fresno are comparatively modest, illustrating that soaring pension costs are directly related to the generosity of the benefits promised.”

Fellner noted that both plans provided average full-career pensions that exceeded the $36,975 earned by the average private worker in Fresno County, according to 2014 data from the Bureau of Labor and Statistics.

“Clearly retirement income greater than the average private worker’s salary is far from inadequate. By simply providing pensions that are comfortable instead of exorbitant, the City of Fresno enjoys one of the lowest — if not the lowest — retirement cost of any major California city.

“The City of Fresno serves as a direct refutation to the post-hoc, unfounded claim that bloated pensions are necessary to maintain a quality workforce.”

The surplus or unfunded liability as a percentage of covered payroll for Fresno-area public pension plans is displayed graphically below:


To see a chart detailing the total surplus or unfunded liability in dollar terms for Fresno-area public pension plans, click here.

Top payouts

The top 3 payouts at the Fresno Police and Fire Retirement System went to:

Former fire captain Al Rush: $193,716
Former fire battalion chief Bruce McDaniel: $176,791
Former fire captain George Durham: $176,297

The top 3 payouts at the Fresno Employees’ Retirement System went to:

Former parks supervisor II Pete Rocco: $154,950
Former redevelopment administrator Eva Murphey: $149,940
Former director of development Nick Yovino: $130,692

Full-career retirees are defined as those who retired with at least 30 years of service.

To view the entire dataset in a searchable and downloadable format, visit TransparentCalifornia.com.

Transparent California is California’s largest and most comprehensive database of public sector compensation and is a project of the Nevada Policy Research Institute, a nonpartisan, free-market think tank. Learn more at TransparentCalifornia.com.

sierramadretattler.blogspot.com 

34 comments:

  1. Why would the SMPA want a pension plan that pays them less money? They will not allow the City Council to make such a change.

    ReplyDelete
    Replies
    1. employees in the private business sector have retirements based off their contributions and not a pension based on "service" or a employment perk that is never ending even in "retirement"

      I think it's poor management to provide lifetime pensions for early retirees or any age that guarantees them an income based on their earnings or salary NOT their contributions.

      we the taxpayer are just getting royally screwed over by the pension welfare the public sector employee receives

      I could give a rats rear end if a police officer, fireman or any public sector employee actually believes they "earned" a yearly pension at taxpayer expense

      they need to pay for their own retirement, not us

      Delete
  2. Is it foolish to hope that our city council might investigate this possibility, this example of success?

    ReplyDelete
    Replies
    1. not with all those nebulous forces roaming around town

      Delete
  3. The pensions are way too much and not affordable. In today's Star News, they mention that Pasadena will soon be in trouble financially. When you pay over 50% of your total budget to police and fire, its no wonder. This madness has to stop. Let them get paid a fair wage and reasonable pension - not retire at 50 and get a huge pension for the rest of their lives. 50 is too young. Take them off the front lines and let them do something else to earn the money for another 10 or 15 years. That solves the problem. All they do is get another job at 50 or 55 because even they know they are too young to retire.

    ReplyDelete
    Replies
    1. it's just a plain stupid business formula - a ponzi scheme

      Delete
    2. I know a fireman in another city who "retired" at 58 after socking up his regular hours and milking the overtime so when he retired he bought a Porsche, a boat, a 2nd condo (with his savings) and knows that he'll earn 80 grand a year for the next 30 years and not have to do anything for it

      he's not earning nor did he earn his retirement

      Delete
  4. When the choice is the Sheriff or a bankrupt city, I think they would be receptive to a decrease.

    ReplyDelete
    Replies
    1. It actually is the choice. The city jjust lacks the nerve to say so.

      Delete
  5. 72% of the voters voted for bankruptcy last month when they passed the UUT measure, thus keeping Calpers instead of contracting with the sheriff.

    ReplyDelete
  6. The reason why, 9:25, is you're still in high school: The academically challenged jocks, who received inordinate support from the local hero-worshiping business community and from the popular but vapid student council types, are now the police and firemen who receive inordinate support from the local hero worshiping business community and the popular but vapid city council types.

    This is especially true about paid fire personnel, who really do absolutely nothing for most of their careers and should be replaced to the extent possible by volunteer fire personnel, who are truly civic minded and deserve our gratitude.

    That said, when will Fellner engage in the transparency he loves so much and tell us who are the right wing anti-union individuals, corporations, and foundations that donate to the organizations that pay him?

    ReplyDelete
  7. Easy to criticize, harder to remedy. Maybe our hotshot new treasurer can come up with something since it looks like the sheriff's department is a ways a way.

    ReplyDelete
  8. Bankrupt the city is LA County sheriffs by default. Many decisions are by default rather that purposeful decision. It is not leadership but "ops"ship.

    ReplyDelete
    Replies
    1. No can goes unkicked.

      Delete
  9. Why is it that those of us in the private sector have to work so hard so that those in the public sector don't?

    ReplyDelete
    Replies
    1. I've been in both the public and private sectors and can say without any doubt that public sector employees work much harder with less resources. Public sector employees also get the pleasure of dealing with that thankfully small percentage of the public who are highly critical and demanding, the loudest and whinyist of which are those who complain the most about paying taxes.

      Delete
    2. By "the loudest and whinyest (sic) of which are those who complain the most about paying taxes," you mean the people who pay your salary? Nice!

      Delete
    3. Like I said, it's a small percentage, but you failed to detect the gist: those who try to pay the least are the most demanding.

      And yes, I'm typing on a very small screen and did misspell whiniest. Not to whine, but when you quote text and use (sic) to denote an error in the original, you leave the error as is followed by (sic). You don't correct it. So I have to give your error notation a robust (sic).

      Delete
    4. Guess it was the small screen again! Next time I'll use my glasses. So ignore the second paragraph.

      Delete
    5. By the way 4:26, are you saying that you have never had a single complaint about a customer or a private sector employer who was paying your salary?

      Oh, you have? Nice!

      Delete
    6. if the public sector didn't waste a large portion of its operating expense on a self indulgent and self serving pension debt, it could probably afford to run it's business with sufficient resources instead of whining about it's "tough" job

      boo hoo



      Delete
  10. This comment has been removed by a blog administrator.

    ReplyDelete
  11. Why did this happen to Sierra Madre? Because they were in love with the good ole days and 10 miles per gallon 1970 cars now that the cost of living has increase so will the taxes and cost of doing business thanks to 72% of the voters that were tricked into keeping the past a live.

    ReplyDelete
  12. Just checked my phone with my glasses on, Mod. You edited 4:26 to change "... whiniest (sic)...." to "... whinyest (sic)...." I have the screenshot if you'd like it. Funny, but a tad beneath you!

    Incidentally, I originally misspelled the word as "whinyist" with an "ist" not the "est" in your edited 4:26 (which you no doubt will re-edit!) Therefore, I must give you another (sic)!

    ReplyDelete
    Replies
    1. As long as you're keeping busy I'm happy.

      Delete
  13. Like 4:15, I have also worked in both the private and the public sector, but my experience was entirely different. In the public sector, there were many people who performed poorly with no consequence. Sinecure sums it up. In the private sector, if you don't do a good job, you don't succeed.

    ReplyDelete
    Replies
    1. 4:15 here. Unfortunately, there is some truth to that 5:58. But I've found that those with a conscience who do work hard more than make up for the slackers.

      Delete
    2. in the public sector you get promoted to City Manager

      in the public sector, if you are a police officer who freaks out and shoots an unarmed man in the back...normally you'd get fired but in Sierra Madre, you remain on the force, get promoted, rack up overtime and a cushy pension

      Delete
  14. Word or warning. Pasadena effectively holds about $42 million in reserves, but increased operating costs will burn through that quickly in the next five years if the city doesn’t change it's financial spending course. By 2021, the city could run into the red by as much as $21 million. Where does Sierra Madre stand financially now?

    ReplyDelete
    Replies
    1. Pasadena’s finances could run into the red by next year
      http://www.pasadenastarnews.com/government-and-politics/20160513/pasadenas-finances-could-run-into-the-red-by-next-year?source=most_viewed

      Delete
    2. The word is Sierra Madre is $9 million in the hole to CalPERS.

      Delete
  15. This may solve the CalPERS problem:

    http://www.latimes.com/business/la-fi-pension-controversy-20150317-story.html

    ReplyDelete
    Replies
    1. Thanks for posting that link. That is a good change.

      Delete