Contra Costa Co. pension board reviewing 'spiking'

January 11, 2010 7:07:21 PM PST
Contra Costa County is facing a crisis over its employee pension plan. It has to increase its pension contribution by a whopping 77 percent over the next six years, which means $105 million. That harsh reality prompted the county's retirement board to take a hard look at a practice called "spiking."

Hundreds of retirees and current employees of Contra Costa County packed a hotel ballroom to hear whether their pensions might be cut. At issue is the 12-year-old practice of spiking.

Spiking involves taking cash payouts in lieu of accrued vacation time in the last year of employment. That amount is then added to an employee's final year of wages, which can dramatically inflate pensions.

"They've been overpaid. There should be some way for them to repay what they didn't earn and they didn't get under the law," says Marcia Fritz, a taxpayer advocate from the California Foundation for Fiscal Responsibility.

"To even discuss that they might reduce that, what people have planned and made their retirement plans on, is unconscionable," says Wanda Quever, a Contra Costa employee.

In one case, a former chief of the Moraga-Orinda Fire District retired with an annual pension of $241,000 -- $56,000 more than his salary in his final year on the job.

Some current and former employees told ABC7 they are worried those extreme examples of pension payouts may prompt changes that could cost them big money.

"According to their figures, I was overpaid $15,000," says Gayl Belfor, a retired health services worker.

Belfor told ABC7 her pension is less than $2,400 per month.

"We're not getting monumental pensions. We're getting small amounts," says Belfor.

"When you signed on the dotted line, you expected to be able to live on a certain amount of income. So it's not our mistake, it's theirs," says Louis Kranyac, a retired deputy sheriff.

In the coming weeks, the board will decide whether to ask retirees to pay back some money, reduce pensions only for future retirees, or leave the system as it is.