11:09 PM PDT on Saturday, August 7, 2010

By DUANE W. GANG and JIM MILLER
The Press-Enterprise

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Each year, more than 4,400 retired Riverside County workers receive a combined $104.6 million in pension benefits, including 87 who get at least $100,000 a year, newly released records show.

Although a small percentage, those six-figure benefits — and similarly sized retirements across the state — are being used to boost calls for reform, and they showcase what many see as an unsustainable pension system.

Riverside County Supervisor John Tavaglione said current retirees did nothing wrong to receive their pensions. Many are retired law enforcement people who spent decades putting their lives on the line, he said.

Rather, the employees were part of an established retirement system that increasingly is no longer viable, Tavaglione said.

Increased benefits granted during boom years, recent investment losses, a growing number of retirees and longer life spans all are contributing to skyrocketing pension costs.

“The system the way it is designed today is unsustainable,” Tavaglione said by telephone. “The economy is going to improve. But there are too many jurisdictions that remain unfunded.”

In Riverside County, for example, estimated lifetime pension liabilities for all current employees and retirees are $6.12 billion this year, a 50 percent increase from five years ago.

Of that, $800 million remains unfunded — the difference between what has already been invested and what the county is obligated to pay in future pensions.

Now, officials across the state are trying to rein in those rising costs before they further threaten already cash-strapped government budgets.

A committee in Riverside County has been meeting since April and could make recommendations to the Board of Supervisors by next month on providing more modest benefits for newly hired workers.

Riverside County voters also will get a choice between two competing pension measures on the November ballot.

One, backed by the sheriff’s deputies union, would make it more difficult for supervisors to reduce benefits by requiring any changes to go to a vote of the electorate.

Supervisors put their own competing measure on the ballot that would still give them the option to decrease benefits without a public vote.

At the state level, Gov. Arnold Schwarzenegger has vowed to veto any budget deal that does not alter California’s pension system to reduce future pension costs.

Pension reform is gaining traction, particularly given the recent controversy in Bell, where the former city manager qualified for a $600,000-a-year retirement, said Douglas Johnson, a fellow at Claremont McKenna College’s Rose Institute for State and Local Government.

“We are only in the early rounds of public awareness and alarm,” he said.

Before, the issue was one for accountants and actuaries, Johnson said.

“Bell has woken up the state to what is really a serious crisis for just about every jurisdiction,” he said.

Inland Debate

Riverside County participates in the California Public Employees’ Retirement System, or CalPERS.

According to CalPERS records obtained last week through the California Public Records Act, 4,424 Riverside County retirees are receiving monthly pension benefits.

The average pension is $23,600 a year.

Of the retirees, 87 receive at least $100,000 and 150 get between $75,000 and $99,000 a year, the records show.

Many are retired public-safety employees, who can qualify for as much as 90 percent of their highest salary in pension benefits.

The highest — $195,527 a year — goes to Valerie Hill, who retired earlier this year as the county’s undersheriff. She served the county for 33 years.

Rounding out the top five are former Deputy County Counsel Robert Pepper, former Assistant District Attorney Randall Tagami, former Chief Assistant District Attorney Sue Steding and former County Counsel William Katzenstein.

The ballot initiative backed by the Riverside Sheriff’s Association aims to protect the public-safety benefits for existing and future workers.

The Public Safety and Taxpayer Protection Act, as the measure is known, would prohibit the Riverside County Board of Supervisors from changing pension benefits without a vote of the electorate and would require the county to keep the current retirement formula for public-safety employees.

It also would safeguard the benefits for family members of officers who die in the line of duty.

Supervisors have blasted the measure, saying it would hamper their ability to rein in rising pension costs that threaten funding for basic services.

“In the past, pensions for most public employees have been moderate, if not modest,” said Supervisor Bob Buster, a vocal proponent of pension reform.

‘NEW CLASS OF RETIREES’

Now, he said, increases in benefits have “unleashed a new class of multimillionaire retirees.”

Currently, public-safety employees are eligible to retire at age 50 and receive 3 percent of their salary for each year of service, topping out at 90 percent.

According to a county report on the sheriff’s union ballot measure, the average public-safety employee earns $77,377 a year, qualifying for $69,639 in annual pension benefits.

Under that formula, an employee retiring at age 50 would receive a combined $2 million by age 80.

Buster said it is important for voters to understand the differences between the two measures on the November ballot.

The one backed by supervisors would require a vote of the electorate only to increase pension benefits. It would still allow supervisors to decrease benefits for future employees.

Like the union-backed proposal, the one supervisors support also would protect benefits for family members of officers killed in the line of duty.

Tavaglione said he doesn’t like either measure. He said he fears the county measure will confuse voters. But the union-backed measure isn’t good, either, he said.

“I don’t like any initiative that ties the hand of the elected body, in terms of setting salaries and retirement benefits,” Tavaglione said.

Buster said the public is starting to realize pension reform is needed.

“It is rising up,” he said. “There is going to be a huge wave beginning to break.”

Riverside Sheriff’s Association President Pat McNamara did not return a call seeking comment.

But in a July 21 message on the union’s Facebook page, he criticized Buster and the county for exaggerating the pension problem.

The public-safety portion of the county’s retirement is more than 90 percent funded, he said. Plus, the average deputy receives a pension of less than $35,000 a year, he said.

McNamara wrote that the “current system is healthy and sustainable.”

He said those receiving 90 percent of their pay after a 30-year career is a “wildly exaggerated and rare example” that Buster and others are using to “turn voters against Riverside County law enforcement.”

‘SPIN OF POLITICIANS’

“The debate on safety retirement is an important issue that’s worthy of the public’s attention and input,” McNamara wrote. “However, the debate should be based on fact not the spin of career politicians and bureaucrats whose only skill is the fine art of sophistry. This is why RSA now seeks to place the debate into the hands of voters.”

San Bernardino County’s pension costs also are expected to rise sharply over the next few years.

The county is not part of CalPERS. An independent public agency — the San Bernardino County Employees’ Retirement Association — oversees the county’s $7 billion pension fund.

“The county proposed pension reduction to (San Bernardino County Safety Employee Benefit Association) this year, and the membership rejected it,” county spokesman David Wert said by e-mail. “The county will make pension reduction part of all future proposals to all of the employee associations.”

SAN BERNARDINO COUNTY

As of June 30, 2009, San Bernardino County’s pension plan had 8,519 members and beneficiaries receiving payments totaling $256.4 million a year, according to the fund’s most recent financial review.

Nearly 400 retirees receive at least $90,000 a year, but a specific breakdown was not available. The San Bernardino County Employees’ Retirement Association denied a Public Records Act request for individual names.

The Riverside County ballot measures come amid renewed attention statewide on public employee retirement benefits. A main front in the debate has been in Sacramento.

Schwarzenegger, who unsuccessfully pushed for pension changes in 2005, has vowed to veto any budget deal to close an estimated $19 billion shortfall unless it also makes changes to the state pension system.

The Republican governor seeks to roll back retirement benefits to what they were before lawmakers increased them in 1999.

MAKE THEM PAY MORE

He wants to require workers to pay more toward their retirement. And he thinks new retirees’ retirement payments should be based on the highest three years of wages instead of on just the highest single year.

In recent months, Schwarzenegger has regularly blamed rising pension costs for forcing him to propose cuts in other state programs.

“It takes money away from education, it takes money away from higher education,” Schwarzenegger said during a Fresno appearance last week. “It takes money away from in-home supportive services, it takes money away from child care, it takes money away from all of those things.”

The governor already has had some pension success.

In June, his administration negotiated contracts with six unions representing California Highway Patrol officers, state firefighters and other workers. The pacts reflect his pension demands.

An Assembly committee signed off on three of the deals last week, and the full Assembly could vote on the contracts as soon as this week. A Senate committee is scheduled to consider the other three agreements Monday.

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