Recipe for a pension deficit

3 Feb

Employer Share Employee Base Share Employee Cost Sharing Total Employee Contribution  “Classic”                                               “Pepra” – employees hired after 2013
CME 7.54% 8% + 6% = 14.00%         CME 7.54% 7.50% + 6% = 13.50%CPSA 7.54% 8% + 6% = 14.00%        CPSA 7.54% 7.50% + 6% = 13.50%CNF 10.54% 8% + 3% = 11.00%        CNF 10.54% 7.50% + 3% = 10.50%DIR 10.54% 8% + 3% = 11.00%         DIR 10.54% 7.50% + 3% = 10.50%L39 10.54% 8% + 3% = 11.00%         L39 10.54% 7.50% + 3% = 10.50%SEIU 10.54% 8% + 3% = 11.00%       SEIU 10.54% 7.50% + 3% = 10.50%UPEC 6.86% 8% + 6.68% = 14.68% UPEC 6.86% 7.50% + 6.68% = 14.18%

CalPERS SAFETY – Classic                  CalPERS SAFETY – PEPRAEmployer Share Employee Base Share Employee Cost Sharing Total Employee ContributionCFSM 19.42% 9% + 3% = 12.00%      CFSM 19.42% 13.75% + 3% = 16.75%CPM 19.42% 9% + 3% = 12.00%        CPM 19.42% 13.75% + 3% = 16.75%CPOA* 13.42% 9% + 9% = 18.00%    CPOA* 13.42% 13.75% + 9% = 22.75%IAFF 19.42% 9% + 3% = 12.00%         IAFF 19.42% 13.75% + 3% = 16.75%

Gee, scuse me, but this above is what an answer from City of Chico Human Resources staff looks like. I asked the HR staffer for the most recent figures on the shares employees pay toward their own benefits, and she sent me a spread sheet. I’m not accusing her of anything, but it’s just about impossible to cut-and-paste a spread sheet. First she tried to pretend she didn’t understand the question, it took me a couple of days, asking the same question over and over until she sent me this chart. I guess she thought she was throwing toothpicks at a vampire.

So, here, let’s sort that mess out.

Let’s take the management unit, CME – meaning, Mark Orme and other department heads (public safety management, as you see further down, is separate). The chart is divided between “Classic” and “PEPRA” employees – Classic being, employees hired before 2013.

“Classic” Employer Share – 7.54%

Employee “base” share – 8%

Employee Cost Sharing – 6% – this is the amount of the former “Employer Share” that the employees have agreed to pay.

See there – the total “contribution” for management staff, some of the highest paid city employees – Employer + Employee contributions – is only 21.54%. For salaries in excess of $100,000/yr. Orme makes over $200,000, and only pays 14%, or $28,000/year. The taxpayers add another $15,080. For a pension of 70% of his highest year’s salary, or $140,000. Plus Cost of Living Increase. Plus benefits.

That kids, is why we have a pension deficit. Orme’s personal deficit is about $70,000. He’s been working for Chico since 2013. He started at a salary of about $189,000, increasing to his current “base pay” of $207,000/yr. He started out paying NOTHING toward his pension or benefits. That’s right, until the last few years, MANAGEMENT PAID NOTHING. Pressure from groups like ours led to tiny incremental increases, but the damage was done. A guy with a $189,000 starting salary, paying nothing, but expecting 70% of his highest year’s salary in pension – how can that be sustainable? And he knew exactly what he was doing, they all do.

While Orme keeps crowing that he and other employees now pay more of the “employers” share, they’re also getting salary increases that more than cover their increased shares. Of course that raises the debt, and the taxpayers are still on the hook for as much as 80% of the total cost.

Here’s a note for you “defund the cops” folks – the cops and fire department pay more than anybody. Look at the chart.

CPOA* Classic: Employer Share -13.42%; Employee base share – 13.75%; + Employee Cost Share – 9% = Total employee contribution – 22.75% The total contribution is almost 36%. Of course, that still creates a deficit. And again – the “employer share” is deceiving, we, “the employers” are on the hook for the deficit too. Including interest. And Cost of Living Increase.

So, if all this is confusing, let me give you a picture: You’re in an 8 foot hole on the beach, and the sand is crumbling in around your head. You shovel and scrape as fast as you can, but the sand is quickly building around your ankles. Suddenly you notice a person – Mark Orme – on top, shoveling sand right in on you. Faster and faster. You notice a group of seven others – that would be council – shoveling right along with him. That’s the pension deficit folks, and we can’t wait for Orme to bring us a ladder.

The tax measure he’s bringing us is just more sand.

4 Responses to “Recipe for a pension deficit”

  1. bob February 3, 2022 at 7:38 am #

    Nothing is too good for our government masters and their minions.

    And we are the tax livestock that have to pay for it all.

  2. toodisturbed February 4, 2022 at 8:39 am #

    I believe you but will you please share a document showing his $70k pension debt? It should be made public, as he works a public position and we pay him. Essentially we are his boss, that’s how we are told it works by our higher government. The law protects him from sharing of his home address, other than that it’s allowed to go public.

    • Juanita Sumner February 5, 2022 at 5:48 am #

      The $70K pension figure isn’t on any document, it’s an estimate of what Orme owes, given his salary and pension shares. Transparent California has taken Orme’s salary, figured what he will get – 70% at retirement – and then figured in what has been paid. The rest is the deficit. It’s just math, but I think they’ve got an accurate figure.

      If you want a document, email Chico Human Resources and ask for his contract, it should be posted on the city website. It’s a good read! You’ll see the 457 Plan he gets and how much goes into it, his car and cellphone allowance, his life insurance, etc.

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