1,200 Retirees Earn Pensions That Exceed Federal Limits. Cities and Counties Pay.
More than a thousand public retirees in California are earning pensions that exceed the federal limit of $220,000, according to data from CalPERS. Last year, 1,205 retirees took home these inflated benefits, which altogether totaled $197 million in 2018. Four years ago, just 684 retirees earned benefits above the federal limit.
As the Sacramento Bee reports, this is placing added pressure on cities and counties.
Taxes on the above-limits portions of the pensions cost cities and counties extra, consuming taxpayer money that could go toward street maintenance, parks, police or firefighters...
Many of the retirees on the list held management positions in cities, counties and special districts that now pay money out of their operating budgets for their pensions. To comply with tax law, the agencies provide benefits above the federal limit by paying the remainder as wages.
In 2013, pensions were capped under the Public Employees’ Pension Reform Act. But that only applies to new retirees. That means a stream of high bills coming due in future years as the current stock of workers retire.
The Bee has a list of mind-blowing examples, including a former county administrator taking home $402,000 per year and a retired city manager with an annual pension of around $337,000.
Read more here.