Nov 10, 2009 6:01 pm US/Pacific
On The Money: The $100,000 Club
Will It Break The Bank?
SACRAMENTO, Calif. (CBS13) ―
Donald Gerth, the retired president of Sacramento State University is enjoying a comfortable retirement. The former public employee has a pension of more than a quarter of a million dollars a year. In fact, Gerth makes $278,055 each year in a pension from California's Public Employee Retirement System (CalPERS).
But Gerth is not the only retired public servant getting a cushy six figure pension every year. Other members of the "$100,000 Club" include Julius Cherry, a former Sacramento Metro Fire Chief, who's now collecting $173,495 a year, according to public records. And Roseville's former Police Chief Joel Neves is also a member of the club, with a pension of $164,697 a year. And Albert Najera, Sacramento's retired Police Chief gets $157,856 in pension money every year, public records show, prompting plenty of public reaction.
"It's not going to stop until we stop it," urged Marcia Fritz, who heads up the California Foundation for Fiscal Responsibility in Citrus Heights. Her group insists that California's hefty government pensions could drown the State in a sea of debt.
"The benefits that we promised are unsustainable," Fritz told CBS 13. She added, "We literally can't put away enough to make good the promises that we've got on the table for all these workers today."
That pension money comes from the CalPERS pension fund and when the stock market crashed, it took a big bite out of the earnings. The fund went from a high of $251 billion in 2007, to approximately $197 billion today, a drop of more than $50 billion.
"Now when the market goes down, it is true that local governments and the employers in the State, they are faced with paying more money into the CalPers fund," explained Pat Macht of CalPers. "That's how it was set up."
CalPERS says the $100,000 club represents just 1% of all retiree benefits. And union leaders say most rank and file workers make far less when they retire.
"Firefighters and other unions don't represent the $100,000 club," stated Carroll Wills of the California Professional Firefighters. "Unions represent the $20,000 club, the 30,000 club, the $40,000 club," he stated.
According to CalPERS, the average pension is $36,000 a year. And CalPERS is confident there is plenty of money in the retirement fund
CalPERS Pat Macht told CBS 13, "We put out checks to about 400 thousand retirees in California. And in 78 years we've never missed a benefit check."
But critics wonder, will it last? At a time when local government are going broke, when the State of California is facing another multi-billion dollar deficit, can taxpayers really afford to hand out six figure pensions to retired public servants, like those in the $100,000 club? And at what price? Could it break the bank?
Marcia Fritz of Californians for Fiscal Responsibility believes that it will.
"Those pension payments have to be made, no matter what. And to pay that you have to lay people off, you have to close parks, you have to lay off school teachers."
Californians may have a chance to vote on a pension reform initiative next year. Marcia Fritz's group is trying to qualify a measure that promises to reduce benefits, while raising the retirement age for government workers hired in the future.
You can expect a big battle over that one.
In the meantime, if you'd like to see who's in the $100,000 club where you live, just click
here.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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