One Pension Spiking Technique Ending in Merced County

It makes the job of County Supervisors and top managers easier if they have some advance notice that a high level manager is going to be retiring. How might top managers be induced to give such advance notice? How about a 5% pay boost if they will give a 12 month notice?

Trick is, such a pay boost also spikes the manager’s retirement for life. Public sector retirement pay is usually based upon the highest 3 years of wages, and in some cases just the highest 12 months. So, if a person can boost his or her pay in their last year their retirement pay will go up too.

Some government entities have had a policy like this in place, approved by the elected Board of Supervisors, City Council, etc. Everyone knows that the end result is to spike pensions, but the feeling has been that it is worth it to have time – say a year – to recruit and train a replacement for these top managers.  Besides, it has been under the public radar.

Worth it and under the radar, that is, until these tough times when public sector pensions are in the cross hairs of a lot of angry citizenry and maneuvers like this to increase pensions are particularly galling. It appears the Board of Supervisors of Merced County got the message, for they just voted to end this policy. I doubt it is a new awareness of succession planning that produced this change in Merced; most likely it is heat on the Supervisors from an increasingly unhappy voting public.

The Merced Sun-Star newspaper reports that the policy in Merced County, implemented in 2001, applied to 28 positions consisting of Department Heads and Assistant CEO’s. The CEO himself brought the matter before the Board, stating it is no longer needed. Good move on Merced County’s part. How about your city, your county, your school district, your water district, your AQMD District, your Sanitation District? Do they have such a pension spiking policy in place, and if so what are you doing about it?


About Over But Not Out

A retired Orange County employee, and moderate Republican. The editor seriously does not know OBNO's identity as did not the former editor, but his point of view is obviously interesting and valued.