The Pension Crisis is not really a crisis at all in most states. It is true that if every state employee were to simultaneously retire, there would not be enough money to cover their guaranteed pensions. But this will not and cannot happen since employees aren’t even eligible to receive benefits until they’ve worked a minimum number of years. It is also true that most pension systems have lost considerable value as a result of the financial meltdown, but this was caused by Wall Street speculators, not greedy unions. This, too, should not be seen as a crisis, since the values are expected to gradually recover over time.
Fearful that the current losses in state pension plans might be replaced through increased taxes, the wealthy went on the offensive, blaming the unions (which they absurdly argue are the primary political powerhouse) for extracting extravagant benefits at taxpayers’ expense. The only solution, they argued, is cutting benefits, delaying when workers are eligible to receive those benefits, and forcing workers to pay more each month to bolster the funds.
One of the ways they are trying to cut benefits is by capping the maximum income that can be used to calculate future benefits. In California, the recently passed pension “reform” bill will cap benefits at $132,000.
In the long term, this will harm most employees, since, with inflation, $132k will eventually become a modest income, easily earned by bus drivers, teachers, and other moderate income state employees. At present, however, the majority of state employees earn far less than this.
School administrators, though, will feel the pinch of this new cap.
The San Francisco Chronicle reported today that there are 77 retired superintendents earning pensions of more than $200,000 a year. James Enochs, for example, who had been superintendent of the Modesto school system, tops the list with an annual pension of $301,000. Fredrick Wentworth, formally of the San Joaquin County Office of Education earns $296,000 per year and Edward Hernandez Jr., formally head of the Rancho Santiago Community College District brings in $291,000. Marilyn Miller, retired chief of the Hillsborough school district gets $268,000 per year and Johanna VanderMolen, who once headed the Campbell Union School District, retired at $267,000 per year.