State Pension Board Undermines 2012 Reforms

You might be surprised to learn that simply doing the job you were hired to do entitles you to extra pay. That is, unless you’re on the board of the California Public Employee Retirement System (CalPERS), which sets pension policy for hundreds of thousands of public employees. In a major step back from pension reforms passed just two years ago, CalPERS this week approved new rules that expand the bankrupt practice of salary “spiking.” That’s when workers are allowed through a variety of tricks to artificially boost their regular pay to increase their future pension payout. The Bay Area Council supported the 2012 reform measures as a good first step in reigning in the state’s massive unfunded pension liabilities, despite concerns that political deal-making had left the reforms vulnerable to just the kind of move CalPERS made this week. Sacramento Bee political columnist Dan Walters opined on how mind-boggling many of the changes were, including adding 99 new types of pay that can be used to bolster regular pay.

Observed Walters: “Running through the list, one is struck by a recurring theme: State and local civil service workers appear to be getting lots of money for performing duties that any rational person would consider just part of the job. Clerks are being paid extra for being good typists, for example, and cops are being paid to keep physically fit, to be accurate shots with their firearms, and when “assigned to analyze and explore a crime scene.” For some reason, jailers get paid extra if they are “routinely and consistently assigned the duty of responding to questions from the public,” while librarians get premium pay if they are “routinely and consistently assigned to provide direction or resources to library patrons.”

Although there appeared to be few avenues for recourse in reversing the CalPERS decision, the Council is reviewing the action and is continuing to advocate for stronger reforms that close the door on irresponsible pension practices.