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State’s retired public workers earn 26% more than private-sector workers still on the job
California’s retired government workers earn 26% more in retirement than private-sector workers earn while still on the job.
That’s the finding of an in-depth analysis released this week by the California Policy Center.
“This is an absolutely upside-down system,” said California Policy Center CEO Mark Bucher. “In the Golden State, it truly pays not to work.”
The new study found that the average pension for a retired public employee in California was $68,673 in 2015, before benefits. By contrast, active private-sector workers earned on average just $54,326.
That same year, the maximum Social Security benefit for a high-wage earner retiring at age 66 was just $32,244 – less than half the benefit of a retired government worker.
Study author Ed Ring analyzed 23 of the largest pension systems in California, representing 95 percent of all state and local government retirees – over 1 million retirees.
State officials at CalPERS claim that benefits to retirees average about $31,500 per year.
But that’s misleading, says Ring, who is vice president of research at CPC.
“They’re not taking into account the average retiree’s length of service. Someone who works half of a normal career should not expect a pension equal to someone who has worked a full career,” Ring says.
Read the full study here: What is the Average Pension for a Retired Government Worker in California?
Other key findings of the study:
- For all systems evaluated, representing over 1.0 million records of California’s retired state and local government workers, in 2015 the average pension for a post-2000 retiree with between 29.5 and 30.5 years of work was $68,673. This does not include benefits.
- Using the same criteria – the average full-career pension for a CalPERS retiree was $71,402, for a CalSTRS retiree it was $57,715, and for a University of California retiree it was $61,752.
- There was a great deal of variation in the major independent county pension systems, with the highest full-career average in 2015 going Contra Costa County, at $85,091, and the lowest going to Tulare County, at $51,932.
- To compare public safety pensions to pensions for all other employees, we evaluated data from three cities where each city has two independent pension systems, one for public safety, and another for all other employees. The 2015 results summarize as follows:
Los Angeles – public safety $89,183, all other retirees $54,782,
San Jose – public safety $130,439, all other retirees $74,649,
Fresno – public safety $54,860, all other retirees $40,927 - Another way to compare public safety pensions to pensions for all other employees was to evaluate data from pension systems that reported, for each record, the former employing agency. Los Angeles County provided data that included this information. Los Angeles County was also the only major pension system to provide benefits data, yielding the following summary:
Sheriffs – pension $88,144, benefits $18,395, total $106,539
Firefighters – pension $104,905, benefits $20,350, total $125,256
All other retirees – pension $50,484, benefits $10,581, total $61,065 - Data on disability pensions was available from two major pensions systems: In Los Angeles County in 2015, disability pensions were reported for 6.5% of former miscellaneous employees, for 40.5% of all retired former sheriffs, and 65.7% of all retired former firefighters; in San Jose’s retirement system exclusively for former public safety employees, 50.0% of the retirees were receiving disability pensions.
“California’s state and local governments face serious financial challenges, including $1.3 trillion in debt and underfunded pensions, plus neglected infrastructure,” says Ring. “State and local elected officials ought to be coming up with policies designed to lower the cost of living for everyone, instead of paying pensions to their government workforce that actually exceed the average of what active private sector citizens earn while still working.”
ABOUT THE CALIFORNIA POLICY CENTER
The California Policy Center produces policy solutions to unleash California’s legendary talent and entrepreneurial spirit. Learn more at CaliforniaPolicyCenter.org.