City of San Jose, CA drowning in an ocean of pension obligations

Sometimes it takes time for the news to be published by the print media. On April 29th I began blogging a series on CalPERS Pensions with my first target being the city of Vernon whose City Administrator receives $499,675 per anum in this city of under 100 residents.
Yesterday’s San Jose Mercury covered the San Jose pension obligation and reports that  “San Jose’s $100,000-plus pension club includes 256 retired officers and firefighters and 34 other city workers.”

 Folks. That’s $29.0 million just for the top rung and we wonder how cities are going to survive in a down economy. How many other former employees in San Jose have retired and are receiving just under $100,000 per year? Many of these retired employees have been replaced by the next group of public servants who will be entitled to the same pension payout unless the system can be altered.

Let’s be candid. This “defined benefit “obligation throughout California simply cannot be sustained.

Following is the opening 5 brief paragraphs of the San Jose Mercury report. The actual link is located at the end of the post. 

(Doug Griswold – Mercury News Illustration)

Veteran San Jose Fire Capt. Randy Sekany hung up his helmet in December at the age of 53. But he didn’t leave behind his $100,000-a-year-plus salary. Instead, he joined the ranks of hundreds of former city workers making six-figure sums, with a pension that will pay him $121,510 this year.

He is one of 44 firefighters and police officers who left the city last year alone with six-figure pensions, thanks to a controversial retirement system that is receiving renewed scrutiny. Even as the cash-strapped city cuts services, it is contributing more than ever to shore up the pension fund amid the market meltdown.

Under the system, San Jose’s veteran public safety workers don’t have to be retired for long before their pensions exceed their former salaries. Depending on how long they worked for the city, they can retire with 90 percent of their salaries while receiving guaranteed, 3 percent annual cost-of-living increases — while private-sector workers are seeing their 401(k)s gutted by market losses.

All told, San Jose’s $100,000-plus pension club includes 256 retired officers and firefighters and 34 other city workers.

“It’s absolutely outrageous,” said Jerry Mungai, a San Jose resident who retired from Cypress Semiconductor and is frustrated that while city retirees collect hefty pensions, his street is “cracked and crumbling” and no one picks up the phone when he calls City Hall.

About Larry Gilbert