Myths about public pensions

They aren’t excessive, and taxpayers don’t pay for them

The author is a retired political-science professor at Chico State. He served as education secretary under Gov. Pat Brown.

Public employees’ retirement benefits are under heavy media and political attack these days. A fact sheet issued in February by 10 nonpartisan national, state and local governmental organizations separates the facts and myths.

Myth: Pensions are among the highest costs of state government.

Fact: Pension cost is about 2.5 percent of total cost of state government.

Myth: Taxpayers pay the total cost of public pensions.

Facts: Investments by the California Public Employees Retirement System (CalPERS) pay 63 cents of every pension dollar. Public employees pay 8 percent to 10 percent of their salaries each month to the fund, which equals 15 cents of every pension dollar, and government employers pay 22 cents.

Myth: Public pension funds are excessive and a drain on the public.

Facts: The average CalPERS pension is $25,000 per year. Half of retirees receive $16,000 or less, and many receive no Social Security. Only 1 percent of nearly a half-million CalPERS retirees receive pensions of $100,000 or more. Seventy-eight percent of CalPERS retirees receive $36,000 or less, and public schools’ nonteaching staff receive an average of $1,079 a month.

Myth: CalPERS is unsustainable.

Fact: The value of the CalPERS fund is up $55 billion from the March 2009 low resulting from the recession. Last fiscal year the fund achieved a 13.3 percent return.

Myth: Police and firefighters retire at age 50 with 90 percent of pay.

Fact: Only 1 percent of safety workers who retired in the last seven years did so at age 50 with 30 years’ service. For a retiree to reach this level of pension, he or she would have had to start working at 20 years of age. Most start their careers at 27, 28 or 29.

Myth: Public employees are paid higher salaries than private-sector workers.

Fact: When workers’ educational levels are taken into account, this is untrue. Matched by educational attainment, public employees actually earn less than their private-sector counterparts.