Gov. Jerry Brown pledges to cut spiraling costs, but key parts of his rollback plan apply mainly to future workers. Activists want quicker action.
By Patrick McGreevy, Los Angeles Times
January 28, 2012
Reporting from Sacramento— Gilbert Robles retired as a state parole agent at age 53, able to collect a $101,195 annual pension — 94% of his final salary. Last year, six months after he retired, the Arcadia resident accepted a political appointment with the same agency that pays an additional six figures.
Scott Hallabrin took retirement as the top attorney for the state’s ethics agency on June 29, 2009. The next day, he went back to the same post, as he prepared to watch his pension checks roll in on top of a salary.
Los Angeles school administrator Norman Isaacs got a 35% raise in 2006, the year before he filed for his public pension. The increase sharply boosted his retirement benefits.
Robles, Hallabrin and Isaacs acted within their rights under California’s pension rules, which the Legislature’s independent budget analyst recently described as “among the most generous in the country.” That generosity comes with a price: The main pension system for public employees is expected to cost taxpayers $2.3 billion this year and has long-term obligations that it is $85 billion short of being able to fund.
Gov. Jerry Brown came to office promising to reduce the state’s burgeoning pension costs, partly by limiting the kinds of practices that inflated the three employees’ retirement incomes. Saying the system is not financially sustainable, the governor has laid out a 12-point plan to change it. He would raise the retirement age, require many employees to contribute more toward their benefits and stop allowing workers to buy retirement credit for years they don’t work, among other changes.
But key parts of the plan would apply only to people hired in the future — after the overhaul passed the Legislature and became law. Tens of thousands of current public employees would still be able to take advantage of the rules that benefited Robles, Hallabrin and Isaacs.
“The governor’s plan doesn’t go far enough,” said Dan Pellissier, president of California Pension Reform, a group led by former state officials that is proposing a ballot measure to rein in pensions further.
Eliminating one of the three practices, the kind of salary “spiking” that swelled Isaacs’ retirement pay, could be difficult. Courts have ruled that the California Constitution prevents the state from changing the terms under which employees were hired. One of the terms is that retirement benefits are based on a worker’s highest-paid year of service.
Attorneys advising Pellissier’s group say the courts left room for changes in case of a financial emergency such as the pension crisis. But Evan Westrup, a spokesman for Brown, said, “We went as far as we thought we could with current employee pensions within existing legal boundaries.”
Similar legal constraints do not apply to the other two income-boosting methods. Hallabrin, 61, used a “revolving door” that allows a government employee to retire one day and go back to work the next day for the same agency, drawing a paycheck and a pension. Brown’s plan would not prevent that.
Hallabrin was making $136,500 a year as general counsel for the state Fair Political Practices Commission, California’s ethics watchdog, in June 2009 when he filed retirement papers. His pension payments were to be $78,648 a year. The day after he retired, he returned as the agency’s general counsel. As a “retired annuitant,” he may work only 120 days a year, but that pays him $63,000 annually on top of his pension.
Hallabrin said annuitants give the state the benefit of knowledgeable workers at lower cost.
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