AVERAGE Orange County Pension 88% of Final Salary

Would you take a 12 percent pay cut in exchange for a 100 percent reduction in work? In Orange County, if you’ve worked 30 years – say from age 25 until age 55 – that is exactly what you can expect. And many OCERS retirees are receiving pensions in excess of their highest salary.

For instance, Orange County Department of Education’s former deputy superintendent Lynn Hartline retired in 2013 with an OCERS-reported final average salary of $250,018. Hartline won’t have too much trouble adapting to life without a salary, however. Her 2013 full-year pension benefit from OCERS (Orange County Employees Retirement System) was 100 percent of her final average salary – $250,018.

Charles Walters received the second-highest OCERS yearly payout in 2013. Walters was the former Orange County assistant sheriff who retired in 2008 amidst a criminal grand jury probe for the 2006 murder of John Chamberlain in the jails he oversaw. His pension for the 2013 year was also 100 percent of his final average salary — $226,365.

Unfortunately the examples above are hardly extreme outliers, but rather indicative of an underlying trend. For all OCERS full-career retirees — those with 30 or more years of service credit for retirement — the average annual pension benefit received in 2013 was $73,875, or nearly 90 percent of their final salary.

Focusing on only recent retirees prevents older retirees — who’ve received significant cost of living adjustments to their pension benefit — from artificially inflating the comparison of pension benefits as a percentage of final salary. The average pension benefit received by a full-career OCERS retiree who retired in 2004 or later was $81,283, which represents 88 percent of the average final salary.

OCERS retirees who worked for the O.C. Fire Authority received an even larger percentage of their final salary in retirement. The average full-career Fire Authority retiree received a pension benefit of $117,934 in 2013, which was 94 percent of the average retiree’s final salary. Retirees who had retired after 2004 received an average benefit of $119,326, worth 94.5 percent of their final salary. For 2008 or later full-career Fire Authority retirees, the average pension benefit in 2013 was $122,770, which was 94.75 percent of the average retiree’s final salary.

The data from those who retired after 2008 demonstrates that pension benefits worth 94 percent their final salary is indicative of the base pension amount an employee can expect to receive upon retirement.

Reviewing the OCERS 2013 data reveals that this problem goes beyond fire retirees. In addition to Hartline’s quarter million dollar yearly benefit, a former social services director, assistant public defender, and sanitation district manager all receive annual pension benefits well over $150,000 apiece.

As salaries rise, so too will future pension benefits for which taxpayers are responsible. Consider the Orange County Department of Education’s current superintendent, Alfred Mijares, who received a salary of $287,500 in 2013.  If Mijares retires with at least 30 years of service credit, he will likely receive a pension benefit of over $250,000 his very first year of retirement.

Private citizens usually consider an appropriate pension amount to be what is necessary to cover the cost of living during retirement. Yet for many Orange County employees, pensions have become a continuation of the extravagant salaries they took home during their careers.

This system encourages government employees to retire 10 to 20 years earlier than their private- sector counterparts. Taxpayers are left paying for six-figure government pensions that most can only dream of, while simultaneously trying to fund their own, significantly smaller pensions.

Robert Fellner is a research fellow with the California Policy Center and a transparency researcher for TransparentCalifornia.com.

5 replies
  1. Avatar
    Tough Love says:

    And when one factors in the favors “bought” with Public Sector Union campaign contributions and election support (specifically, our elected officials favorable votes on Public Sector pay, pensions and benefits), the Taxpayers are eminently justified in reneging on the 50-75% share of these grossly excessive pensions and benefits that clearly would NOT have been granted in the absence of that collusion.

    Reform (in the form of VERY material cutbacks) WILL come because it’s a MATH problem, and math ALWAYS trumps politics.

  2. Avatar
    Barry Levinson says:

    The reason all taxpayers should be outraged by the final percentage of retirement income vs. final pay for OCERS retirees is simple.

    The taxpayer can not afford to pay these public servants that kind of retirement money. It may be called a pension, but in reality part of it is simply welfare created by the unions cozy relationship with so many of our elected officials. A pension benefit should be earned and paid for by the contributions of the employees with a matching contribution by the employer/taxpayer and nothing more.

    As someone who has studied and worked in the financial field my entire life, I wish there was a financially prudent way to afford these lavish pensions. There is only one way to do this and that would be to have each and every public employee pay at least 30 – 50% of their gross salary into the pension fund. Of course that will never happen but that is exactly what we the taxpayer’s are facing now or will face in the near future without a major reduction in public retirement benefits.

    For instance, in 2012 I reviewed the employer cost for the Fullerton, California safety workers (police and fire). The employer portion (which in public service means the taxpayer) was scheduled to be over 40% and rising. This is not fair to the taxpayer. Most of the taxpaying public makes less in salary than our police and fire employees, and could only dream of getting any pension let alone 88% of final salary.

    Let me state something plain and simple. Those public unions and their members are self-centered, selfish people who do not really care about the financial well-being of all those taxpayers who have paid for their incredibly generous benefits and very healthy salaries as well.

    The question that must be asked is the following: When will those public employee unions stop their conflict of interest campaigns of supporting only agreeable candidates for office and start acting like true public servants who actually care about the communities they are supposed to serve?

  3. Avatar
    John Peterson says:

    As with everything the facts are not presented here. OCEA employees got 2.7 at 55 after years of rough negotiations. The employees fund the enhancement 100 percent, otherwise it costs the County zero dollars. The 1.62 over formula is funded by the County and the Employees too. The 1.62 formula which has been in place for decades and will not provide enough income in retirement. Most cities pay 100 percent of their retirement into their employees funds. I pay close to 20 percent of my income to OCERS or 1200 a month. Also to note OCERS has a 2 billion dollar surplus and is one of the best run retirement systems in the nation. OCERS wins awards each year for best run system. So in a nutshell its costing the taxpayer zero for the enhancement and OCERS is in great shape!

  4. Avatar
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  5. Avatar
    michael Hungerford says:

    That’s not true. There is no way an individual “OCER” can fund a retirement with the amount of pension they will receive upon retirement. Anyone with half a brain and a retirement calculator can figure this out. People with these types of pensions are receiving the equivalent of a differed lottery jackpot. Think about this for a moment, In the private sector, we pay roughly 7% of our earnings into Social Security & our employers pay another 7.5%. What do we end up with? If we are lucky, we will end up with about $2300 per month. The pensions that these workers are receiving are the equivalent to winning a $4,000,000 jackpot paid out over the rest of their lives. The state of California’s slogan should be, “work for us and win the lotto” It’s a joke and they know it. Look up the facts.

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