"It’s Corruption On Steroids" – A Look Inside The El Monte, California Public Employee Pension
By Tyler Durden
El Monte, California is a city of roughly 100,000 residents in East Los Angeles, many of whom struggle to make ends meet with a median household income of ~$39,000 and nearly 25% of people living below the poverty line. But while most of the people of El Monte struggle to meet monthly expenses, the city’s public employees are living the high life courtesy of one of the most egregious taxpayer funded pension plans in the country. Just ask the retired City Manager, James Mussenden, who told the LA Times that he gets paid $216,000 per year in retirement to tour the world on extravagant golf trips.
The retired city manager of El Monte collects more than $216,000 a year, plus cost-of-living increases and fully paid health insurance.
“It’s giving me an opportunity to do a number of things I didn’t get to do when I was younger, like travel to Europe, take some things off my bucket list,” Mussenden, 66, said recently. He even flew to Scotland to play the famed Old Course at St. Andrews, a mecca for golf enthusiasts.
Mussenden recognizes that few Americans have pensions anymore — least of all the El Monte taxpayers who are funding his retirement. So while he enjoys his monthly retirement check, he’s discreet about it.
“The guys I play golf with, they get very angry about my pension because they don’t have anything like it,” he said.
El Monte’s total retirement costs for public employees in 2016 totaled $16.5 million, or a staggering 28% of the city’s total budget.
But taxpayer funded pension payouts weren’t always so generous in El Monte. A fact that changed in 1999 when a decade-long bull market tripled the value of California’s massive public pension fund, CalPERS. Of course, the CalPERS board of directors, dominated by public employee union leaders and their political allies, voted to spend the surplus lowering retirement ages and raising pensions for public employees all across the state.
Unfortunately, the CalPERS board was blinded by endless wall street reports suggesting that “pets.com” was worth at least $1 trillion and forgot that markets actually cycle. Alas, shortly after granting 200,000 civil servants sweet new retirement packages, at the absolute peak of the market, the tech bubble burst and CalPERs found itself in a crisis that still plagues the state to this day.
California Highway Patrol officers got an especially sweet deal. Their pensions had been 2% of their highest salaries, multiplied by the number of years they worked. The percentage of peak salary was raised to 3%.
That meant officers with 30 years of service could collect up to 90% of their highest pay for life. And they would be eligible to retire at 50.
El Monte adopted the new pension formula (known as “3% at 50”) in 2000, and the effect was dramatic. Officers who retired before 2000 with more than 25 years of service collect $82,000 a year on average, according to CalPERS data.
Those who retired after …read more
Source: "It’s Corruption On Steroids" – A Look Inside The El Monte, California Public Employee Pension
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