Marking a significant political shift, Contra Costa's public worker retirement system last week eliminated most pension spiking opportunities for new employees.
The Contra Costa County Employees' Retirement Association administers pensions for 17 government agencies. Its board consists of the county treasurer, four trustees appointed by the county Board of Supervisors, and four retiree and employee representatives.
Historically, labor has controlled the board because county supervisors have appointed at least one union-friendly trustee. That ended in June, when they refused to reappoint former Richmond Councilwoman Maria Theresa Viramontes and replaced her with attorney Scott Gordon.
The first significant sign of change came when the retirement board decided how to implement the new state pension law for workers hired after Jan. 1 of this year. For years, the Contra Costa system has included a ridiculous list of pay add-ons in pension calculations.
For example, a worker's pension could be based not only on highest base salary but also extra compensation for everything from unused vacation to shift differentials, holiday pay and training certificates.
The new state law eliminated many add-ons for new employees' pension calculations, but left it to each retirement system to make determinations on other items. With Viramontes, the Contra Costa pension board had planned to include a substantial list.
But on Wednesday, trustees voted to eliminate all add-ons. Pensions for new workers will be calculated using only base pay. That comports with the plain reading of the new law.
That language hasn't stopped the nation's largest pension program, the California Public Employees' Retirement System, from maintaining a long list of add-ons. Fortunately, Contra Costa will not be following that lead.
Obama vs. Brown: In a standoff with labor unions and the Obama administration over transit workers' pensions, Gov. Jerry Brown blinked last week.
He didn't cave. And he hasn't given up the fight. But U.S. Labor Secretary Thomas Perez won Round 1. He was holding billions of federal transportation dollars hostage and Brown wasn't willing to lose that.
Perez claims that a 1964 federal law prohibits releasing funds to transit agencies that implement the state's new pension rules. The federal law was designed to ensure public transit agencies didn't bust unions as they acquired financially troubled private transportation companies.
Perez claims that the pension changes Brown signed last year would violate the half-century-old federal law by infringing on transit workers' contractual and collective bargaining rights. Brown vehemently disagrees.
With Perez unrelenting and starting to cut off federal money, Brown announced that the state will delay implementation of the new pension rules for transit workers to allow time for a court to resolve the legal dispute.
That means transit workers hired during the delay will enjoy greater pension benefits when they eventually retire than new employees for other California public agencies. Even if the state wins its case, transit agencies will be stuck paying higher pension costs for workers hired in the interim.
Take 2: In last week's column, I oversimplified the explanation of 2002 pension changes for Contra Costa County public safety workers -- changes that are now driving the East Bay's largest fire district to the financial edge. My thanks to a reader, who asked to remain anonymous, for catching the error.
Here's a corrected version: Before the changes, firefighters at Contra Costa County Fire Protection District who are at least 50 years old received pensions ranging from 2 percent to 2.6 percent of top annual salary for every year of service. The multiplier depended on exact age at retirement. The 2002 deal increased the multiplier to 3 percent, regardless of retirement age.
Thus, a 30-year veteran's starting pension, before annual inflation adjustments, equals 90 percent of top salary. Those with more experience can earn up to 100 percent. That top salary also includes credit for unused vacation time, sometimes making retirement more lucrative than working.
The deal was applied retroactively. Workers could use the new formula for past years of service, even though they had been previously paying into the retirement system at rates that assumed lower benefits.
That immediately created a financial shortfall for the retirement system -- a debt the fire district must pay off.