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Growing Number of Retirees May Drive up Pension Costs

The Associated Press

April 5, 2004

Thousands of retired public employees in California receive annual pensions of more than $100,000, and the growing number of retirees in the next few years could further drive up costs, forcing cuts in services or tax hikes, a newspaper reported.

Many state agencies will have to pay out two to four times as much in retirement benefits in the next few years, even as pensions suffer from investment losses, higher payouts for benefits, and reduced contributions from current employees, the Daily News of Los Angeles said.

The newspaper studied government pension data and found that 427 retirees in the California State Teachers' Retirement System have pensions paying more than $100,000 a year. Six-figure pensions also are paid to 816 people in the California Public Employees' Retirement System.

"The pension and benefits for some of these government employees are outrageous," said Allan Hoffenblum, a Republican political consultant. "It's just what (the government unions) have negotiated with city councils, boards and elected officials."

Union officials noted that the vast majority of government employees don't receive large pensions.

"We must be careful to distinguish between the relatively small number of public servants who receive large pensions and the vast majority whose pensions are modest - some can barely make ends meet in retirement," said Mark Tarnawsky, spokesman for Service Employees International Union, Local 660, which represents Los Angeles county workers.

The number of public employees earning more than $100,000 has grown fivefold since 1995 to more than 5,100, the newspaper said. That's a likely signal of higher pension payments in the future.

Former Los Angeles County Sheriff Sherman Block's widow collects up to $270,000 a year, while Sheriff Lee Baca, the county's highest-paid elected official at $235,759 a year, is expected to receive more than 95 percent of his salary when he retires.

The number of private-sector retirees who receive pensions is diminishing, and most collect less than half of their salaries in retirement, officials said.


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