Average Costa Mesa Firefighter Makes Nearly $250,000 Per Year. Why? Pensions.

Does that fact have your attention? Because media consultants insist we preface anything of substance with a hook like this. It even has the virtue of being true! And now, for those with the stomach for it, let’s descend into the weeds.

According to payroll and benefit data reported by the City of Costa Mesa to the California State Controller, during 2015 the average full-time firefighter made $240,886. During the same period, the average full-time police officer in Costa Mesa made $201,330. In both cases, that includes the cost, on average, for their regular pay, overtime, “other pay,” the city’s payment to CalPERS for the city’s share, the city’s payment to CalPERS of a portion of the employee’s share, and the city’s payments for the employee’s health and dental insurance benefits.

And if you think that’s a lot, just wait. Because the payments CalPERS is demanding from Costa Mesa – and presumably every other agency that participates in their pension system – are about to go way up.

We have obtained two innocuous documents recently delivered to the City of Costa Mesa from CalPERS. They are entitled “SAFETY FIRE PLAN OF THE CITY OF COSTA MESA (CalPERS ID: 5937664258), Annual Valuation Report as of June 30, 2015,” (click to download) and a similar document “SAFETY POLICE PLAN OF THE CITY OF COSTA MESA (CalPERS ID 5937664258), Annual Valuation Report as of June 30, 2015,” (click to download). Buried in the bureaucratic jargon are notices of significant increases to how much Costa Mesa is going to have to pay CalPERS each year. In particular, behold the following two tables that appear on page five of each letter:

Projected Employer Contributions to CalPERS  –  Costa Mesa Police


Projected Employer Contributions to CalPERS  –  Costa Mesa Firefighters


In the rarefied air of pension arcana, pension systems can get away with a lot. If you’re a glutton for punishment, read these notices from CalPERS in their entirety and see if, anywhere, they bother to explain the big picture. They don’t. The big picture is this:  For years CalPERS has underestimated how much they are going to pay in pensions and they have overestimated how much their investments will earn, and as a result they are continuously increasing how much cities have to pay them. This notice is just the latest in a predictable cascade of bad news from pension systems to cities and other agencies.

Coming down to earth just a bit, consider the two terms on the above charts, “Normal Cost %” and “UAL $.” It would be proper to wonder why they represent one with a percentage and one with actual dollars, but rather than indulge in futile speculation, here are some definitions. “Normal Cost” is how much the city pays (never mind that the city also pays a portion of the employee shares – we’ll get to that) into the pension system if it is fully funded. The reason pension systems are NOT fully funded is because, again, year after year, CalPERS underestimated how much they would pay out in pensions to retirees and overestimated how much they would earn. Read this disclaimer that appears on page five of the letters: “The table below shows projected employer contributions…assuming CalPERS earns 7.5 percent every fiscal year thereafter, and assuming that all other actuarial assumptions will be realized….”

And when the “Normal Cost” payments aren’t enough, and the system is underfunded, voila, along comes the “UAL $,” that bigger catch-up payment that is necessary to restore financial health to the fund. “UAL” refers to “unfunded actuarial liability,” the present value of all eventual payments to retirees, and “UAL $” refers to the payments necessary to reduce it to a healthy level. Notice that for firefighters this catch-up payment is set to increase from $4.2M in 2017 to $6.8M in 2022, and for police it is set to increase from $5.8M in 2017 to $10.1M in 2022. This is in a small city that in 2015 employed an estimated 125 full-time police officers and 75 full-time firefighters.

As always, it must be emphasized that the point of all this is not to disparage police or firefighters. No reasonable person fails to appreciate the work they do, or the fact that they stand between us and violence, mayhem, catastrophe and chaos. And it is particularly difficult for those of us who are part of the overwhelming majority of citizens who appreciate and respect members of public safety to have to disclose and publicize the facts of their unaffordable pensions.

The following charts, using data downloaded from the CA State Controller, put these costs into perspective:

Average and Median Employee Compensation by Department
Costa Mesa – Full time employees – 2015


In the above chart, before sorting by department and calculating averages and medians, we eliminated employees who worked as temps or only worked for part of the year. This provides a more accurate estimate of how much full-time workers really make in Costa Mesa. Bear in mind that most part-time employees still receive pension benefits, as will be shown on a subsequent chart. As it is, during 2015 the average full-time police officer in Costa Mesa was paid total wages of $121,636, about 15% of that in overtime. But they then collected another $79,694 in city paid benefits, including $59,337 paid by the city towards their pension, AND another $11,562 that the city paid towards their pension that the State Controller vaguely describes as “Defined Benefit Paid by Employer.” Total 2015 police pay:  $201,330.

Also on the above chart, one can see that during 2015 the average full-time firefighter in Costa Mesa was paid total wages of $150,227, about 32% of that in overtime. They then collected another $90,659 in city paid benefits, including $72,202 paid by the city toward their pension, and as already noted, another $10,440 that the city paid toward the employee’s share of their pension. Total 2015 firefighter pay: $240,886.

To distill this further, the following chart shows, per full-time employee, just how much pensions cost Costa Mesa in 2015 as a percent of regular pay.

Average Employer Pension Payment as % of Regular Pay
Costa Mesa – Full-time employees – 2015

As the above chart demonstrates, employer payments for full-time employee pensions during 2015 already consumed a staggering amount of budget. For police, every dollar of regular pay was matched by 80.5 cents of payments by the city to CalPERS. For firefighters, every dollar of regular pay was matched by a staggering 94.4 cents of payments by the city to CalPERS.

The next chart shows the impact this has on the City of Costa Mesa budget. Depicting total payroll amounts by department, it compares the same variables, total employer pension payments as a percent of total regular pay. As can be seen, the percentages are nearly the same, despite this being for the entire workforce including temporary and part-time employees, some who may not have pension benefits (most do), and many who do not receive top tier pension formulas which the overwhelming majority of full-time public safety employees still receive. As can be seen, for every dollar of regular police pay, CalPERS gets 75 cents from the city, and for every dollar of firefighter pay, CalPERS gets 92 cents from the city.

Total Employer Pension Payment as % of Regular Pay
Costa Mesa – All active employees; full, part-time and temp – 2015

At this point, the impact of CalPERS stated rate increases can be fully appreciated. And because this article, already at nearly 1,000 words, has violated every rule of 21st century social media engagement protocols – keep it short, shallow, simple, and sensational – perhaps the next paragraph should be entirely written in bold so it is less likely to be lost in the haze of verbosity. Perhaps a meme is in here somewhere. Perhaps an inflammatory graphic that shall animate the populace. Meanwhile, here goes:

Once CalPERS’s announced increases to the “unfunded payment” are fully implemented, instead of paying $10.9M per year for police pensions, Costa Mesa will pay $15.2M per year, i.e., for every dollar in regular police pay, they will pay $1.04 toward police pensions. Similarly, instead of paying CalPERS $6.4M per year for firefighter pensions, Costa Mesa will pay $9.1M per year, i.e., for every dollar in regular firefighter pay, they will pay $1.30 towards firefighter pensions.


So just how much do Costa Mesa’s retired police and firefighters collect in pensions? Repeatedly characterized by government union officials as “modest,” shall we report and you decide? The following table, using data originally sourced from CalPERS and downloaded from Transparent California, are the pensions earned by Costa Mesa retirees in 2015. Excluded from this list in order to present a more representative profile are all pre-2000 retirees, since retirement pensions were greatly enhanced after the turn of the century, and it is those more recent pensions, not the earlier ones, that are causing the financial havoc. Also excluded because the benefit amounts are not representative and the retirement years are not disclosed, are all “beneficiary” pensions, which survivors receive.

Average Pensions by Years of Service
Costa Mesa retirees – 2015


While these averages are impressive – work 30 years and you get a six-figure pension – they grossly understate what Costa Mesa public safety retirees actually get. There are at least four reasons for this: (1) The data provided doesn’t screen for part-time workers. Many retirees may have put in decades of service with the city, but only worked, for example, 20-hour weeks. They would still accrue a pension, but it would not be nearly as much as it would be if they’d worked full time. (2) Nearly all full-time employees are also granted “other post-employment benefits,” primarily health insurance. It is reasonable to assume that for public safety retirees, the value of these other post employment benefits is at least $10,000 per year. (3) Because CalPERS did not disclose what department retirees worked in during their active careers, this data set is for all of Costa Mesa’s retirees. That means it includes miscellaneous employees who receive pensions that are, while very generous, are not nearly as good as the pensions that public safety retirees receive. (4) While recent reforms have begun to curb this practice, it has been common at least through 2014 for retirees to purchase “air time,” wherein for a ridiculously low sum they are permitted to claim more years of service than they actually worked. It is common for retirees, for example, to purchase five years of air time, so when their pension benefit is initially calculated, instead of multiplying, for example, 20 years of service times a 3.0% multiplier times their final salary, they are permitted to claim 25 years of service.

All of this, of course, is dense gobbledygook to the average millennial Facebook denizen, or, for that matter, to the average politician. To be fair, it’s hard even for the financial professionals hired by the public employee unions to acknowledge that maybe 7.5% (or even 6.5%) annual investment returns will not continue for funds as big as CalPERS, or that history is no indicator of future performance. And even if they know this, they’re under tremendous pressure to keep silent. So the normal contribution remains too low, and the catch-up payments mushroom.

Finally, to be eminently fair, we must acknowledge that since modest bungalows on lots so small you have to choose between a swing set or a trampoline for the kids are now going for about a million bucks each in most of Orange County, making a quarter million per year ain’t what it used to be. But there’s the rub. Because until the people who work for the government are subject to the same economic challenges as the citizens they serve, it is very unlikely we’ll see any pressure to lower the cost of living. Everything – land, energy, transportation, water, materials, etc. – costs far more than it should, thanks to deliberate political policies and financial mismanagement that creates artificial scarcity. But hey – artificial scarcity inflates asset bubbles, which helps keep those pension funds marginally solvent.

Cost-of-living reform, if such a thing can be characterized, must accompany pension reform. What virulent meme might encapsulate all of this complexity?

 *   *   *

Ed Ring is the president of the California Policy Center.

15 replies
  1. Avatar
    Lovie Dovie says:

    In both cases, that includes the cost, on average, for their regular pay, overtime, “other pay,” the city’s payment to CalPERS for the city’s share, the city’s payment to CalPERS of a portion of the employee’s share, and the city’s payments for the employee’s health and dental insurance benefits.
    You left OUT : 1) Vacation pay of 3-6 weeks; 2) Holiday pay of 14 days, and 3) Sick leave pay of 12 days. That is an additional paid benefit of 48-69 days. Using the mean/average compensation of $240,886, you get mean/average daily compensation of $926/day. PER DAY!. $926 x 48/69= an additional benefit of $44,448 – $63,994. Add that onto the mean/average compensation of $240,886= and you get the average/mean compensation including time off of $285,334- $304,780. That is more than 10 TIMES the average/mean per capita income of $29K for actual WORKING Californians.

  2. Avatar
    Tough Love says:

    COLA-increased 90% of final pay pensions after 30 years, and with annuity payouts often beginning in the early 50s is beyond pale in it’s extraordinary richness, and hence extraordinary cost.

    Such pensions are ROUTINELY 4 to 6 times greater in “value upon retirement” than the pensions typically granted Private Sector workers who retire with the SAME pay, the SAME years of service, and at the SAME age.

    As NY’s recently departed crook Crazy Eddie would say …… It’s INSANE !

  3. Avatar
    joes8523 says:

    if only the taxpaying public would come out to protest this rape of the public treasury in the same way they protest the police use of unnecessary force (for which, by the way, the police are never punished and the taxpayers have to pick up the tab for all the lawsuits).

  4. Avatar
    Tough Love says:

    Tell commentator SkippingDog, a retired CA Police Officer who thinks he “earned it”, INCLUDING that portion granted RETROACTIVELY as a result of SB400.

  5. Avatar
    S Moderation Douglas says:

    You’re making another assumption. If… SkippingDog, or any other safety worker, retired at age 55 (average age for CHP retirees is 54, other safety workers are usually higher) and… he, or they, had 33 1/3 years of service, their pension would be exactly the same under either formula.

    No increase, retroactive or otherwise.

  6. Avatar
    S Moderation Douglas says:

    Per capita income by definition is total income divided by all Californians. Every man, woman, and child. Not just “WORKING Californians”.

    The average salary for working Californians is $55,260 (May, 2015) according to BLS, wages and salaries account for 68.6% of total cost, so total compensation for private sector employees would average $80,554. That includes vacation pay, holiday pay, sick leave, retirement and healthcare, etc. It does not include overtime or bonuses.

    And that average includes every fast food worker, janitor, and 7-11 cashier.

  7. Avatar
    Tough Love says:

    S Moderation Douglas,

    So do you then agree that all those who retired with LESS than 33 1/3 service years should RETURN the incremental value of SB44 for which they provided ZERO (yes ZERO) consideration … both for FUTURE years not yet paid AND for all PAST years in which it was already collected ?

  8. Avatar
    S Moderation Douglas says:


    Some of us received a three percent formula increase that was more than offset by by losses to CPI. We tried to make everybody exactly equal, but that’s not the way life works.

    We are all unequal, but some are more unequal than others.

  9. Avatar
    Tough Love says:

    Yes SMD, some received 3% more … and some received 50% more.

    But ALL of it should be at the top of the list for reversal WHEN (not IF ) the the CA Plans fail.

  10. Avatar
    Eli Pierce says:

    Fireman vs cop vs military. A cop runs his roll off of penal code. You run calls based on who to bust, who’s violating Penal Code. Who will go to jail. Who you might have to beat. Handcuff. Kill. Military: you have an MOS. you have orders to kill, shoot, take prisoners, wipe out a village, etc..FIREMAN: They are there to save lives. Do CPR. Rescue people from fires, crumpled vehicle accidents, gun shot wounds, they don’t arrrest people, they don’t kill people they don’t ruin lives and make up shite so that families are destroyed and child protective servies are called and people are wounded and villified and destroyed. No, that’s why firemen are honored among the community. Cops, no thanks. We’ve seen too many of them who don’t care. Who are so jaded because the DA didn’t care either that even after the cops gathered evidence and put togehter a case the lazy subintellectual politically motivated moronic DA office shot down the case, so disillusioning the cops that even they gave up. Wrap your mind around that you idiot sheeple. And the general public has no clue. no idea how corrupt this system is, but one thing is for sure, the fireman they don’t care about politics. They will come and save you and protect you, not so much the cops anymore, they are mostly compromised by hiring effeminate PC cops who won’t stand their ground. Who won’t advocate for what’s right too concerned and afraid for themselves weak pathetic people. not the old school cops who didn’t care what media thought but only cared about what’s best for community and what the law said. Good luck sheeple.

  11. Avatar
    Lola and Bert says:

    I have a question that just might provide the requisite “slap across the face” for all taxpayers:
    If I, as a pure private-sector, non-pension-receiving California taxpayer was required to write a check (I know, old school), or send an electronic check (a little better), or PayPal/Zelle/ApplePay the amount I owed to fully fund the monies owed to the firefighter/police/government employee pension program as of today, what dollar amount would I be required to pay (trust me, it isn’t a “contribution”)? What would my additional required payment be in 5 yrs? In 10yrs? I think that if the average taxpayer were to hear/read/see those actual numbers – FOR EACH OF THEM – it might make more of a statement. Hearing phrases like “taxpayer-responsible X Million” or “kicking the can down the road” don’t really bring it down to ME. But telling ME (average private-sector tax-paying Joe) how much I have to pay – today and again in 5 yrs and again in 10yrs, etc: Now THAT makes a statement!

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