California Public Employees’ Retirement System (CalPERS) officials announced that they are reviewing the pension benefits of system participants who earn more than $400,000 a year.
Brad Pacheco, public affairs manager at the $204.4 billion CalPERS, said the review will ensure that all proper regulations are being followed in the rewarding of retirement benefits. Pacheco said it has yet to be determined how many of CalPERS’ 1 million active participants currently earn more than $400,000 a year.
Last week, CalPERS officials expressed surprise at a 47 percent raise given to Bell, California, City Administrator Robert Rizzo and other top city officials in 2005, but press reports indicated that CalPERS officials knew of the increases after an audit in 2006.
The raise was included in news reports that three Bell city employees were making a total of $1.5 million a year, including an $800,000 annual salary for Rizzo.
Pacheco said CalPERS was aware of the increases but could do nothing about them. He said normal procedures would require CalPERS to grant a waiver for a major salary increase, because pay hikes increase pension benefits. But he said CalPERS had no power over granting or denying the increase, if other similar employees also are receiving raises.
Pacheco said Bell officials told CalPERS several employees were in the management group that received similar increases, so CalPERS decided no waiver was needed.
“We followed all the existing pension rules related to Bell four years ago, but it is clear that we need to work toward strengthening our regulations and possibly state law,” said CalPERS chief executive Anne Stausboll in a statement.
Filed by Dennis Diamond of Pensions & Investments, a sister publication of Workforce Management. To comment, e-mail editors@workforce.com.
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