Public pension reformers have been discussing switching employee plans from the current lucrative defined-benefit approach to a 401(k) type of plan. Some employees, under various defined-benefit plans, get nearly full salary if they retire at 55 with 30 years on the job.
It turns out that some local government employees, particularly management employees who get the largest defined-benefit payouts, also are getting 401(k)-type retirement benefits in addition to their generous defined-benefit plans.
The Ventura County Star revealed the existence of this second pension November 8, in a story discussing how figures released on high public employee salaries don't include the value of retirement plans and other goodies.
In 2008, Ventura County's top 10 earners made a total of $261,764 in tax-exempt compensation. This includes the contributions to 401(k)-type plans, the contributions to defined-benefit plans and amounts paid for health care. In Thousand Oaks, the city contributes 15 percent of one manager's salary to his retirement savings account.
Critics say this is excessive, as management-level workers can retire with pensions well into the six figures, so there is no need to give them more money for a separate 401(k)-type account. Marcia Fritz, president of the California Foundation for Fiscal Responsibility, said, "It's outrageous that the county would continue to pay an additional amount to a defined-contribution plan to somebody who already has a defined-benefit pension."
Marty Robinson, Ventura County's executive officer, said: "The county has been on the forefront of dealing with retirement issues. It's a three-legged system: The 401(k), the pension and Social Security." In Ms. Robinson's case, the county taxpayers are matching dollar-for-dollar her contributions to the 401(k), up to 3 percent of income. The county also provides an amount equal to 5 percent of her salary to her retirement account. Other county managers can get the 3 percent match, but Ms. Robinson is the only one to get the additional 5 percent. (Source: Ventura County Star, November 8.)
Cal-TaxReports, November 16, 2009
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