Public employees' pensions eat tenth of San Luis Obispo County budget

San Luis Obispo County is spending nearly $45 million a year on pension payouts — 10 percent of its budget — a growing amount that has prompted ongoing negotiations toward a two-tier pension plan and higher employee contributions with unions. The county’s nearly 1,900 retired workers each draw on the county pension fund at an average of nearly $24,000 a year, according to the county Administrative Office.

The Tribune requested the information as part of its ongoing examination of wages and benefits paid to public employees.

“According to Pension Trust, we currently have 1,890 recipients,” County Administrator Jim Grant wrote in response to The Tribune’s query. “The average annual benefit paid to recipients is $23,778, or $1,981 per month. These numbers include safety and probation members.”

Multiplying 1,890 by $23,778 yields $44,940,420. The pension costs represent about 10 percent of the county’s overall budget, which is $450 million.

There are 2,403 county employees, down 197, or 7.5 percent, from the 2007-08 fiscal year, when the economic downturn began.

Here’s a breakdown of the 1,890 recipients, according to Grant:

1,665 “miscellaneous” member recipients; the average annual benefit for miscellaneous members was $21,634.

187 public safety member recipients, whose average annual benefit was $40,260.

38 probation officer member recipients, with an average annual benefit of $36,609.

Asked whether one class of retiree receives more than those in another group, Tony Petruzzi, executive secretary of the San Luis Obispo County Pension Trust, wrote that, generally, no one job category has a higher payout than another. Benefits, Petruzzi wrote, are based on years of service. The longer one worked, the higher the payout.

However, he added, “public safety and probation officer members, due to the nature of law enforcement and probation case work, are eligible to retire at earlier ages, with higher benefit levels, than are the miscellaneous members. This is common to these particular sectors — again primarily due to the demands of those types of positions.”

Grant wrote that the county and employees contributed about $55 million to the pension trust in 2009. “The contribution may be somewhat less in 2010 due to a reduction of 40 positions in the current year,” he added, noting that the county will receive updated figures from the Pension Trust by early summer.

“We would anticipate a possible 1 percent increase, which would equate to roughly $1.5 million more per year (again this is the total rate, which is paid for by both the county and employees).”

Grant said county government has “been negotiating an increase in the employee’s share of the pension costs, with the target of achieving an overall 50/50 split, for both existing and future employees.”

“PERS (California Public Employees’ Retirement System) counties/cities are nowhere near this ratio,” he wrote.

Grant was referring to the fact that San Luis Obispo County has its own, locally controlled system.

Its benefits, administered by a board of trustees, are established by actions of the Board of Supervisors, through the collective bargaining process, according to Petruzzi.

CalPERS, on the other hand, is the statewide pension system, subject to control of the Legislature, and its benefits are set forth in the California Government Code.

CalPERS covers all state employees, nonteaching school employees and the numerous public employees who work for agencies that have contracted with CalPERS, such as cities, water districts and cemetery districts.

The county has already implemented a two-tier pension plan for management employees, which, when negotiated with all employee groups, will eventually cut total pension costs by 50 percent, saving the county about $20 million to $25 million per year.