"It's Corruption On Steroids" - A Look Inside The El Monte, California Public Employee Pension

Tyler Durden's picture

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 2000 collect an average of $120,000.

Mayor

 

But former City Manager Harold O. Johanson didn't think it was "fair" that police officers got a sweetened retirement deal while other city employs had their pensions capped at two-thirds of their final salary.  So he set out to implement a "supplemental plan" for other El Monte public employees that would boost their retirement checks by ~50%.  Johanson subsequently retired three years later, at 58, and now collects $250,000 per year from taxpayers putting him in the top one-hundredth of one percent of all public pension recipients in California.

The idea for the supplemental plan arose in 2000, after the city council granted El Monte police officers the right to retire with up to 90% of their highest salary guaranteed for life.

 

But it created a gap between El Monte police and the city’s non-uniformed employees: Under CalPERS rules, civilian pensions were capped at two-thirds of final salary.

 

It would boost civilians’ retirement checks by 50% and put their pensions nearly on a par with police. The city council approved the idea in May 2000, unanimously and without public debate.

Johanson retired three years later, at 58. Today, he is the top beneficiary of the program he championed, collecting a combined pension of more than $250,000 per year, state and city records show. That puts him in the top one-hundredth of one percent of all public pension recipients in California.

But sweet pensions aren't the only perk afforded to El Monte public employees who also get Fridays off if they work 10 hours per day Monday - Thursday and annual cost of living adjustments of up to 5%

El Monte has a history of generous employee benefits — including a four-day work week for civil servants, who put in 10 hours a day and have Fridays off. Liberal pension provisions are another part of that tradition.

 

Under state law, police are supposed to contribute 9% of their paychecks toward their pensions, and civilian workers 7%. But El Monte covers the employee contribution as well as the employer share, a legacy of collective bargaining agreements dating to the early 1980s.

 

On top of that, retired El Monte employees receive annual cost of living increases at the high end of what CalPERS allows: up to 4% for police retirees and 5% for civilians, depending on inflation. Most CalPERS pension recipients receive increases of 2% annually.

 

Benefits that lavish do not come cheap: For every $100 the city paid a police officer in 2016, it had to pay an additional $71 to CalPERS to fund payments to current and future retirees.

Perhaps at some point we can all stop talking about "Russian hackers" and actually focus on the real corruption plaguing our country.

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navy62802's picture

It's the socialist dream!

jcaz's picture

BK the city, and invalidate these bogus "pensions"-  it's not an arms-length contract when you can influence your own outcome.

BK California while we're at it-  they still want to secede?   By all means, be my guest.......

JamesBond's picture

No sympathy for socialists and the consequences they have to bear.

 

jb

WillyGroper's picture

anyone besides me having weird shit happen on sites?

everything from "no internet connect" when there is, to a complete block.

i could only get back here thru the IP.

even sites such as tractor supply.

these bastids are getting ready for sumpin big.

DontGive's picture

Get better smoke signals.

This pension bomb will be spectacular. I will enjoy it, with Putins popcorn.

847328_3527's picture

#publicemployeeslivesmatter

Theosebes Goodfellow's picture

Better yet...

#publicemployeepensionsmatter

Government employee unions should be illegal. When all you have at the bargaining table are two classes of government employees, the taxpayer will get fuck every single time. The El Monte government employees union is just the poster child. There are literately thousands of muni employee union pensions out there, (and not just in California). And the level of underfunding is huge.

The revenge though will be sweet, (presuming you are into the whole revenge thing). All these trough feeders who are living it big thinking those funds will continue to pay out for the rest of their lives will be in for a rude awakening if a) interest rates go up and b) the US dollar tanks. I sure hope some of them are wise enough to convert their pension payouts into real money, but I doubt it. They all worked for the government for all those years.

Ramesees's picture

Never trust a thin chef or a fat socialist.  

Theosebes Goodfellow's picture

Or play cards with a guy whose first name is a city.

Reno Joe.

Phlliy Pete.

Topeka Ben.

Don't play cards with them dudes.

gladih8r's picture

California is a statist's paradise.  The local electorate seem to enjoy it and keep voting for more.  In perverse way, the more the career politicians feed at that trough over there the better. 

Everyone else needs an example of what NOT to do staring us in the face at all times.

 

Elco the Constitutionalist's picture
Elco the Constitutionalist (not verified) gladih8r Jan 1, 2017 8:05 PM

When they completely control all media, flood voter rolls with illegal aliens, bribe union members including government workers, and use all the other extortions and fraud that they can manage, is it really the fault of the voters?

Do the voters even matter at that point? How can we even know the extent of election fraud?

Xena fobe's picture

Yes they do.  The idiots voted themselves several tax increases last electiom. Just tell them it will allieviate traffic congestion or someone else will pay for it and they'll vote for anything.  So many non English speakers couldn't care less about public policy.  They are provided with voting materials translated into a dozen languages.  Yet still are easily fooled.

Déjà view's picture

West Virginia paid the most generous benefits, equal to 115% of final earnings, followed by New Mexico (113%), Oregon (105%), California (102%) and, yes, conservative Texas (101%).

https://www.aei.org/publication/which-states-pay-the-most-generous-publi...

Wonder how much Tejas H.S. football coaches reap after avg. nearly $100,000 p.a. in $alaries...

Thirty-four coaches made more than $100,000, led by Bob Wager of Arlington Martin and Anthony Criss of Arlington Sam Houston, who took in $113,553 each.

http://www.star-telegram.com/sports/dfwvarsity/prep-football/article9754...

SoDamnMad's picture

Part of the "negotiated" CA pension deal is that you base your retirement salary on the average of the last 3 years. The last year the individual uses unpaid accrued  vacation, sick days and personal days in the computation.  Then the next to last 2 years they work  (actually just show up) they work ungodly amounts of OT.  I've seen fathers of kids in parades getting paid OT for being on-duty while shepharding their kids all day on Cinco de Mayo (yes, CA celebrates the Mexican army victory over the French in 1862).

auricle's picture

It is the DNC that keeps bankrolling these corrupt grifters to power. And the idiot electorate keeps voting for their candidates? By now it should be evident to every voter that the RNC and DNC are completely corrupted entities that draft candidates that work on behalf of special interests and not the people. 

chumbawamba's picture

OMG DEY B SHUTTIN DOWN DA INTERNETS!

Lorca's Novena's picture

Same here, especially the past month... Bought a new chrome-book (yeh I know googles is evil) yesterday figuring it was my old one, same problems. Even had to register with a new username since my main one would not sync with new 'puter. Everything takes twice as long, and its pissing me off when i'm trading...

SoDamnMad's picture

I cannot get RT on anything and hold it.

MontgomeryScott's picture

YES.

On Cable One, it's every other webpage.

On Hughesnet, it only happens with SPECIFIC sites (such as Before It's News).

ICANN is really working quite well, though (for the PTB, that is).

QUESTION: If CONUS and Russian Federation got 'full nuclear', who benefits?

ANSWER: In three, two, one...: P.L.A., perhaps?

 

A lot of REALLY BAD SHIT can happen in 20 days, Willy. The Titanic sank in 2.5 hours, you know.

I almost EXPECT the PLA to make a strategic military move to take over Taiwan, for example.

I pray for WB7's safe passage.

peddling-fiction's picture

Willy, welcome to my world.

Everything can be blocked, or pages can rendered white.

JRobby's picture

He should have taken the lump sum.

CALPERS PARTY IS GOING TO END IN MAYHEM!

Putting yet more stress on "the healthcare system"

Financial Rape

847328_3527's picture

Freeze the mangers' and brokers' assets who mismanaged this chaos and force them to disgorge all the fat commissions, bonuses, expensive vacations, mulit-million dollar houses, etc to help fund the deficit.

Any of these politicians who unlawfully or irresponsibly handed themselves fat salaries or pensions, same remedy.

It's only fair.

WakeUpPeeeeeople's picture

Fair would be stretching their necks from a telephone pole and then confiscating their assets as a clawback. Works for me..

JRobby's picture

Put them on the ground with a ball bat. Then let the citizens commence to kicking them and never stop.

Mr Kurtz's picture

1.     

It is terrible to contemplate how few politicians are hanged. ~ G. K. Chesterson

two hoots's picture

There are many swamps that need drained, local, state and national.    

JRobby's picture

Criminality has taken over in a big way. BIG way.

Morality long gone.

GreatUncle's picture

Secede ... more like make cuts and one of them is throwing California out.

Shemp 4 Victory's picture

Primer mi carucha, Chevy '39
Going to El Monte Legion Stadium
Pick up on my Weesa, she is so divine
Helps me stealing hubcaps, wasted all the time

Fuzzy dice, bongos in the back,
My ship of love, ready to attack

Won't you please hear my plea?

https://www.youtube.com/watch?v=wMSQ1vCxZJU

rccalhoun's picture

most humans have no conscience.  then throw in 'no pressure' government work and a culture that thrives on entitlement and you've

got a group that would be least likely to survive a comple reset benefiting the most from the system that is irradicated.

these government retirees would be toast in a 'survival of the fittest' society.

August's picture

Best of all, corruption in the USA is completely legal.

Is this a great country, or what?

Escrava Isaura's picture

navy62802: It's the socialist dream!

Wrong. This level of corruption is an outcome of capitalism.

Socialism, where the workers run the business, this level of corruption unlikely would happen.

But nice propaganda of misinformation on your side.

 

 

Ol Man's picture

This level of corruption is an outcome of capitalism.

Wrong.  There is no competition in government. 

It is not a capitalist system. 

It is theft by taxation and corruption. 

I can think of no goverment that isn't doing something like this.

They are all corrupt.

DontGive's picture

Here is Socialism for you.

http://hosted.ap.org/dynamic/stories/L/LT_VENEZUELA_UNDONE_PROFITING_FRO...

Military "profiting" errr - doing Gods work with food.

Keep sucking that Gov dick Escrava.

boattrash's picture

Ol Man gets it! +100   Theft is theft, even/especially when it's done under "color-of-law".

Lorca's Novena's picture

I see your delusion made it through the new year...

globozart's picture

Well, look for Venzuela. There your dreams came to life.

Not My Real Name's picture

Escrava blames Venezuela's problems on capitalism too.

Nexus789's picture

Seeing that Venezuela was a target for Clinton and the IMF have been  involved since 2009 the strategy is an easy one to figure out - own the local bankers/government,  create economic chaos and then steal the people's assets.  Sod all to do with socialism or capitalism.  

Xena fobe's picture

It is both. The era of deregulation enabled govt agencies to do away with policies that had traditionally reined in excesses.  Same as with private.

DonGenaro's picture

SPOILER ALERT!:

In the last chapter of The Socialist Novel, the people starve at gun point

Bunga Bunga's picture

They know that the system is gonna blow up, so get out as much and as quick as you can.

G-R-U-N-T's picture

Dominos soon, municipalities, States and the Feds will be begging for mercy for their greed, those bitches deserve what they get as the residual effects will be devastating!

Torches and pitchforks via public servants will be marching to Wshington demanding taxpayer bailouts. Trump would be wise to tell them to go back home and ask their poiticians and nation destroying bureaucrats why they made promises they knew they couldn't keep for votes? Then let the chips fall where they may!

Let them go by way of ANY private sector business whose mismanagement has caused default and file bankruptcy!

The Chief's picture

This is the kind of corruption that turns average men into patriots, and patriots into ravenous revolutionaries.

This is diabolical.

Rich Monk's picture

Start hanging these f---ing pricks in government!

Lost in translation's picture

Shades of the Maywood/Bell scandal.

These things are far from anomalies. It's how government officials operate in CA, at every level.

That's why the plebes are being disarmed, and the police are being given M240B's and MRAPs.

CrankyCurmudgeon's picture

Forty hours is forty hours. WTF is wrong with four tens vs five eights. You're right about the pensions but dragging in crap like that harms your cause.

Zarbo's picture

Let's assume that you needed a piece of paper from a city clerk on a Friday.  That clerk works only Monday to Thursday.  You paid for a service, but did not get it.  Been there, experienced that.  It was the city itself that generated my need for the piece of paper -- and gave me a deadline.