supes_hart park

County of Kern Administrative Center on Truxtun Ave.

More Californians than ever before are earning $100,000 or more from public pensions, according to an analysis by government watchdog Transparent California. And in 2018, Kern County led the charge in one measure by welcoming the highest proportion of public service employees into the six-figure range of any pension fund statewide.

While Transparent California sees the increases as potential threats to public services and tax hikes, the local county pension administrator is not alarmed.

“$100,000 is an arbitrary number,” said Dominic Brown, executive director of Kern County Employees Retirement Association. “I don’t see that as throwing up any red flags.”

In 2018, KCERA experienced a 21 percent increase in pensioners receiving $100,000 or more compared to the previous year. That narrowly beat out the Los Angeles Fire and Police Employee’s Pension at 20 percent and the Los Angeles County Pension and Fresno County Employee’s Retirement Association, both at 19 percent, according to Transparent California.

In 2017, Kern County experienced a 12 percent increase.

While thousands of retirees in Los Angeles draw more than $100,000 from public pensions compared to Kern County’s 525 in 2018, Transparent California’s analysis only took into consideration the ratio of newly-minted six figure earners in 2018.

“It’s just another way to highlight the facts, which are, quite frankly, that the system is very rich and very generous, and that’s why costs are going up by so much,” said Transparent California Executive Director Robert Fellner.

Across the state, 79,325 pensioners draw more than $100,000, which is up 85 percent since 2013, according to the analysis.

If costs continue to go up, Fellner said working class citizens who will never earn a pension that generous will be forced to pay higher taxes while potentially getting less in return.

Pensions are funded through investment returns, and employer and employee contributions. Each year, beneficiaries can receive pension increases through cost of living adjustments. Workers entering a pension program typically earn less through their salaries than other workers, with the expectation that they will receive more in their retirement.

Sometimes – as is the case in Kern County – the amount going into the system can be less than that which needs to be paid out, creating an unfunded liability.

KCERA has approximately $6.4 billion in total liabilities, with $4.4 billion in assets, according to Brown.

Brown said he was not concerned about the overall health of the plan, adding that projections indicated investment returns would return it to being fully funded by 2035.

“Over the next 18 years or so, we catch up and all that liability gets paid,” Brown said, adding that 19 other counties had the same plan as Kern County. “We are all, more or less, in the exact same boat."

KCERA projects currently estimate a long term rate of return at 7.25 percent. If that is not realized - say, from a market downturn - KCERA will need to readjust its projections.

With Kern County recently emerging from a fiscal crisis, leaders are under pressure to approve raises for various employees. Fellner cautions against such actions.

"When things are good, (politicians) tend to give the money away with raises and things like that," he said. "You should be using that surplus to pay down your debt because if you wait until things collapse, that’s precisely when you don’t’ have the money."

You can reach Sam Morgen at 661-395-7415. You may also follow him on Twitter @smorgenTBC.

(22) comments

Fram Smith

On KERN radio , Scott Cox did an excellent job of explaining to even a simpleton like me , that these executive pensions are not sustainable with our tax base in Kern County. However , the Kern County Board of Supervisors have no incentive in pension reform , since they themselves stand to gain personally , from these executive pensions that Kern County provides to a select few. We drive out the mult- billion dollar hemp industry , we are about to be regulated out of the oil and gas business by Sacramento , and we have some the largest pension obligations in California. Just take a look at outgoing Bakersfield City Manager Alan Tandy's pension package ; it is about as close to wet dream in real life , that most folks will ever see. Here in Kern County , we really are our own worst enemy.

Bluecollar

This is why we don't have enough law enforcement, crappy roads, and large classrooms. The people granting these pensions formulas are not held accountable, in the real world they would of been fired. The only ones held accountable are the tax payers, who are mostly leaving the state because there retirement is not enough to live here due to high taxes and fees

Bluecollar

dgdfg

Nevermind

The truth of the matter is that Kern County Employees received the lowest pay for most jobs in the state for decades. In it's eagerness NOT to give any raises, they pushed the problem forward by offering a 3% at 60 pension. Those Board Members simply passed the buck to future Board Members.

The pension that county employees get now is nowhere near as lucrative. This is most likely the crest for pension obligation as those 3%ers start to die off.

Personally I think KCERA has done a solid job of investing with assets of over 4 billion dollars. Although there are now more retirees than employees, within the next five years, obligations will start to be reduced.

It wasn't the employees idea to make a deal for a better pension over a good salary. Leave their pensions alone and fulfill that deal. If you don't, everybodys pension will be up for reexamination.

Inconvenient Truth

Exactly right.

Here’s a thought experiment for those who have paid into Social Security their entire working life and are approaching age 67:

The federal government just decides they have been paying too much to existing recipients and decides to change the formula to substantially reduce your benefits when you retire.

Would you support this change just as heartily as you support cutting pensions for others who have worked their entire careers for them.

It’s always easy when it’s the other guy’s ox being gored...

Bluecollar

I just met a man who was a lineman for 44 years and just turned 67

His ss will pay 2400 a month, I guess that will keep him from being homeless.

Mike Hunt

All government pensions should be re examined if we don’t have the money to pay them. Remember , government works for the people not the other way around.

Chad Hathaway

“$100,000 is an arbitrary number,” said Dominic Brown, executive director of Kern County Employees Retirement Association. “I don’t see that as throwing up any red flags.”

$100,000 is in no way arbitrary especially for those of us who do not have a pension. Transparent California is right higher taxes will and have already came because of this problem. Bakersfield just narrowly passed a sales tax hike which was desperately needed to cover their pension shortfalls.

if I’m set to receive a pension one day. I’d want to poke 1000 holes in the 2035 plan to make sure KCRA is right.

REMEY

That tax raise you mentioned was not to cover pensions.

Bluecollar

"The city plans to use $12 million generated from the increased sales tax to pay CalPERS: California Public Employees' Retirement System." Quoted from Alan Tandy

Veritas

Those of you that voted for the city sales tax and are complaining about it get what you deserve. It clearly stated on your ballot that the city can spend this money on whatever they want. You just fell for the public safety sales pitch and didn’t read it yourself or read it all the way through before you cast your yes vote. Hey, at least your getting new trees and shrubs and covering Dandy Tandy’s retirement to the tune of $250,000+.

Mike Hunt

These inflated pensions are killing this state . The un funded pension liability is in the hundreds of billions. When they realize they were promising money the state doesn’t have they will TRY and raise taxes to pay for them. Just another reason why this state is going down. Pensions are not a viable option any more. Time to correct the system in the people’s favor. Save for your own retirement like everyone else does. There won’t be anyone left here to to pay taxes anyways.....

REMEY

No disrespect to all the hard workers out there, but I believe we need to stop new pensions as they can take advantage of 401k like the rest of us.

byebyeCA

I totally agree with REMEY. Here's how my 401 retirement was set up, company invested 7% and only if employee invested a minimum of 3%. After 20 years of employment company raised investment to 10% and only if employee invested 3%. The 3% was the employee minimum, but employee could invest as much as desired above the 3%. When employee retired the company was done with investments as should be with public employees. Taxpayers would no longer pay a retirement investment and the retired employee would manage their own 401 retirement investments.

FreeAllDogs

Gladly take your offer IF I were paid a wage equal to the private sector.

byebyeCA

I worked as a county public employee for 5 years. I could see that it was a go no where job and I quit and persuaded a private company job. Best decision I ever made, best learning and career move I ever made. I don't see these high paying pensions lasting in the future the money is just not there.

FreeAllDogs

The County recognized a shortfall so reformulated all new hire pension formulas. There won’t be many $100,000 plus pensions in about twenty more years unless a Safety member.

The “spike” in $100k pensions certainly isn’t due to an increase in salaries over the last twelve years. My guess is, numerous Fire and higher ranking Sherrifs office employees retired causing the spike. General employees see about half if not less.

BGarvin

Safety members have the most egregious pensions. Leave everyone else alone, but examine them (firefighters,police, corrections). Kern has firefighters making 300k+ a year in Kern County.

All Star

I wonder what a newspaper reporter, working for a small paper like TBC, makes in retirement? My guess is not much.

Inconvenient Truth

Even at the most generous formulas for safety and grandfathered-in ‘Tier-1’ employees, nearly every one of those $100K+ pensioners had to work for Kern County most, if not all of their careers (30 to 35 years); and they at least paid towards their own pensions.

Funny how nobody ever questions how we are able to continually pay hundreds of millions to welfare recipients who do no work...

Fightingsideofme

Now that is the truth !

Inconvenient Truth

And an Inconvenient one at that. ;-

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