How do you get a $290,000 a year pension?
No, you don’t have to work on Wall Street.
All you have to do is live in Manteca and run for a countywide office.
Rick Wentworth - the retired San Joaquin County Superintendent of Schools receives a $24,207.07 retirement check every month. That’s $290,484.84 a year. It’s enough to make him No. 2 in all of California when it comes to those receiving pensions from the California State Teachers Retirement System which happens to have a $65 billion funding shortfall that looms as a massive liability for California taxpayers.
Wentworth is topped by one pensioner - retired Modesto City Elementary Schools Superintendent James Enochs who comes in at $296,555.40 a year. No wonder Modesto named a high school after him given his ability to manipulate the system. And let’s make no doubt about it. It is a form of manipulation.
Contracts that include retirement packages are approved by citizen politicians, if you will, who are elected to serve on school boards.
They listen to the top staff they hire - school administrators and more specifically superintendents - to advise them on salary and pension issues. In the case of county offices, both the superintendent and school boards are elected.
And it is true school boards have an independent group to seek advice from in the form of the California School Board Association. But wouldn’t you know that much of its staff is comprised of former school administrators. No surprise there.
There is no rationale that justifies a retired school superintendent making almost double the salary of a sitting California governor.
It is a retirement that will keep going up with inflation.
So how does one make more in retirement than they do when they are working?
Not too hard if you consider the rules bureaucrats essentially drafted and got naive elected officials to embrace.
Public employee retirement systems are notorious for allowing everything from car allowances to unused sick leave, vacation time, and personal time accumulated over the years to be paid out in cash in an employee’s final year on the job.
While it may seem “fair” since being on the job may have kept things going smoother, the one big lump pay check has the effect of spiking retirement checks that keep being paid until death do us part.
Many public retirement systems are based on the average of your three last years of employment. If you were making $180,000 and $185,000 respectively in two of your three final years and in the last year got paid $300,000 that includes your $185,000 salary, unused sick, personal, and vacation time stretching back to when you started your career in the public sector it has pretty big consequences. Your initial year of retirement would be right around $221,600 or $36,600 more than you made just the prior year when you were working.
It is actually worse than it looks. Personal days are on top of generous vacation and sick days and the fact they have a long-term liability to a district isn’t taken into account in year-to-year budgeting.
If a district for, example, offers health benefits to school board members and none are taken the annual cost has to show up as a financial liability in the budget regardless because of the fact they are offered.
Unused personal, vacation and sick time that is rolled over may show up as a financial liability when one is employed but it doesn’t in retirement accounting. That way no school board ever knows the real cost of those contracts that they believe administrators deserve.
Between the California Personal Retirement System and CalSTRS there is a minimum of $110 billion in unfunded liability that the taxpayers are on the hook for. That, of course, is based on rosy investment returns such as 7.75 percent for CalPERs. For those keeping track on what ails California, the CalPERS investments received a 1.1 percent return in the year ending Dec. 31, 2011. That is a shortfall in one year of almost 600 percent.
The shortfall is much larger is you believe the Stanford Institute for Public Policy that assumes a more likely investment return scenario. Based on that study’s mid-line projection, the state’s two largest pension funds could have a liability in excess of $500 billion.
That’s why if we approve new taxes in November the bulk of the money ultimately will go to increased pension costs. The governor may say local school districts can do what they need with the new money but it is clear they must meet contractual obligations - at least for as long as the school district remains solvent.
There is little debate that Wentworth and Enochs are good guys who did their job. And it is clear that most retiring teachers won’t earn a fourth of either one of them when they start drawing pensions.
But it is clear what ails education in California is repeatedly making the same financial mistakes over and over again. While you can’t change current pensions unless, of course, bankruptcy of CalPERS or CalSTRS occurred you can change the rules from here on out.
Assuming, of course, elected leaders have any courage at all.
This column is the opinion of managing editor, Dennis Wyatt, and does not necessarily represent the opinion of The Bulletin or Morris Newspaper Corp. of CA. He can be contacted at email@example.com or 209-249-3519.