It was recently reported that a Court ordered the Orange County Employees Retirement System (OCERS) to release the payroll of retirees receiving a monthly check from the system. This was in response to a lawsuit seeking the names of each such retiree and the annual amount they receive. The primary interest seems to be in those receiving $100 K a year or more in retirement pay.
The OCERS web site says they will be complying with the court order. In the meantime, I thought I would review the data on their site for an inkling of what is to come.
I found a list of over 12,000 retirees receiving a monthly check. There are about 500 in the $100K club, which calculates to about 4.3% of the retirees getting a monthly check. Of that 500 there are 12 receiving over $ 200K, a fraction of 1%.
It looks to me then like about 4.3% of the retirees in this system are in the $100K club, and about 95.7% are not. What this all means is an interesting question. When OCERS releases the payroll with names as ordered by the Court you will then have it all. Until then, this preview will help those who are interested in this subject assess the situation.
Why the hell are they getting 100K?
Jack, defined benefit retirement programs provide for a retirement as a percentage of salary. The percentage increases as years of employment increase. A highly paid executive, physician, engineer, law enforcement official, city manager etc. who works 25 years or more will be drawing a salary in the high 100K range (or more), and will retire with a percentage of that pay.
Hypothetical Example – a Dr. in the Health Department earns $ 175K a year, and retires after 30 years with the county and the retirement system he has worked under provides for 60% of his pay as retirement. That would be $ 105K a year. If he reached the point where the retirement system provided 75% of his pay, then it would be about $ 131,000 a year.
With salaries of local government level top management in the neighborhood of $200K a year, and in some cases more, it is not difficult to see how people with decades long careers retire with six figure retirement benefits. I provide this information to show you how it happens, not to try and justify it (or on the flip side not to attack it either).
I would add that statistically the number of retirees I found on the OCERS site receiving 6 figure retirements is a very small percentage (approx. 4.3%) of all retirees. However, in these difficult economic times there are a lot of questions about whether government can contnue to provide such retirement benefits going forward, and a lot of people who are struggling to survive who view such benefits with disdain.
If there is any good news, it is that the Orange County retirement system that made it possible for someone to work 40 or more years and retire at full pay has not been available to anyone hired after 1978, so that retirement benefit at least is a dinosaur. I suspect that some/many of those with the highest retirement pay are from that pre-1978 era, and their ranks will not grow for some time, if ever. Hope this explanation did not put you to sleep.