Myths and Facts
Myth #1: Public safety pensions are extremely
generous and are bankrupting local governments.
Fact: Wall Street failures, corporate abuses and
the burst of the housing bubble are to blame for
California’s struggling economy. We are
witnessing the worst economy in our lifetime.
Public safety members throughout California are
working together, proactively offering
concessions and working to help local
governments manage their budgets.
The spiking you have heard about is
unacceptable. The truth is, very few public
employees receive pensions above $100,000; less
than one percent.
Myth #2: Public safety officers are greedy and
unwilling to help cities and counties out of
this financial mess.
Fact: The average month of service retirement
to ALL CalPERS retirees is only $2,101 per
month. In fact, 78 percent of all service
retirees receive $36,000 or less per year. Most
law enforcement officers work on the front
lines, putting their well-being in jeopardy
every day. It is not an easy job or one without
risk. In these days of dangerous technology and
weaponry, it is increasingly difficult to find
individuals willing to take those risks.
In trying to solve this problem, public safety
members have been and continue to work
proactively. Associations are constantly at the
bargaining table, offering concessions such as
deferment of pay increases, additional shared
responsibility for health and retirement
benefits, and even reduced special program
staffing.
Myth #3: Public safety members retire young but
receive the same lofty pension they would have
if they worked twenty years.
Fact: The average public
safety retiree is 56 years of age and has worked
more than 20 years for the state of California.
To receive the maximum retirement benefits, an
officer has to work over 30 years. The current
retirement formula encourages officers to work
as long as they possibly can in order to receive
the maximum retirement benefit. In reality,
only 1% of public safety members actually
qualify for this benefit level. Many officers
struggle in dealing with their injuries as they
get further along in their career.
Myth #4: Municipalities are paying more for
pensions than ever before.
Fact:
California’s pension funds were almost fully
funded until the recent stock market crash.
Employer contributions to pension plans are
lower today than they were in the early 1980s,
and the funded status of plans is better than in
the early 1980s. Between October 9, 2007 – the
peak of the market – and October 9, 2008,
equities declined by 42 percent. State and
local defined benefit plans, which held roughly
70 percent of their assets in equities, saw a
decline in the value of their equities by $1
trillion.
Myth #5: Public safety members are fortunate in
that they don’t pay into Social Security like
other Californians do.
Fact: Many public safety members do pay into
Social Security but do not receive full Social
Security benefits upon retirement. This means
that when an officer retires, their pension may
be their sole source of income. This often
leads to officers needing to find work during
retirement to supplement their income.
Myth #6: Taxpayers are responsible for paying
the entire cost of public employee pensions.
Fact: Pension funding comes from member
contributions, employer contributions and income
earned from investments. All of this combined
pays for benefits and administrative expenses.
When all is tallied, investment earnings on
average cover almost 75% of public safety
pensions.
Myth #7: Police and firefighters retire at age
50 with 90 percent of pay.
CalPERS indicates that over the last seven
years, safety workers who retired at age 50 with
30 years of service represented 1 percent of all
those retired. The reason very few ever receive
this level of retirement pension is that they
would have had to start working age 20 to earn
30 years. Most public safety members start their
careers at age 27, 28, or 29.
Twelve percent of all public safety members are
subject to the 3 percent at age 55 formula. They
would need 37.5 years of service at age 50 to
get 90 percent, and would have had to start
working at age 12.5. Seven percent of all
public agency safety members are subject to the
2 percent at age 50 formula. They would need to
have 45 years of service at age 50 to get 90
percent and would have had to start working at
age 5.
