Lawmakers reform pensions after salary scandal

August 2, 2010 8:07:39 PM PDT
The salary scandal involving city leaders in Southern California has now led to a pension scandal. The city manager in Bell was pulling in nearly $800,000 a year and he will now get about $600,000 for life. That has lawmakers in Sacramento talking about cracking down on outlandish pensions state wide.

"He (Robert Rizzo) is the poster child, whether he likes it or not, for this kind of reform and so we are going to push it here in Sacramento," Assm. Hector De La Torre, D-South Gate, said.

About 90 percent of local public agencies like Bell participate in CalPERS, the state retirement system. Anytime it is running out of money, the pension fund reaches into state coffers that all taxpayers pay into to make up the shortfall.

In this year's budget, nearly $4 billion is going to CalPERS with taxpayer liability growing every year.

"That means you're going to have those services that people depend on from government to be cut and taxes are going to have to be raised," St. Sen. Dennis Hollingsworth, R-Murrieta, said.

There is already a 1996 federal IRS rule that limits pension payouts to $245,000 a year, but if CalPERS' own investigation into Bell salaries comes up clean, it will not apply to Rizzo or Bell's former police chief, who will get more than $450,000 a year in retirement, because they were already public employees in other California cities.

"The officials in the city of Bell were actually in the CalPERS system prior to that so they would not be in effect under that law," CalPERS spokesperson Brad Pacheco said.

State workers though, worry reforms meant for the six-figure club will shortchange them. They point out a typical pension is more like $25,000 a year.

"A lot of times, that's what we see is knee-jerk reactions to the hot button crisis of the moment; I hope that's not how pension reform gets decided," state employee Eric Wiesenthal said.

Some of the proposals they are talking about include forcing the former Bell officials into that $245,000 a year limit and posting local government salaries online. Lawmakers will have to act fact; the legislative year ends at the end of the month.


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