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Pensions for career Sonoma County government workers have more than doubled in the past decade, led by sheriff's deputies and other public safety workers who by 2011 were retiring with an average of more than $94,000 a year.

Employees outside the ranks of public safety who retired in 2011 with 20 or more years averaged nearly $68,000 — 107 percent more than what co-workers who retired in 2002 get on average, county retirement records show.

The dramatic jump — four times greater than the rise in the cost of living — has affected at least 758 career employees who have retired under enhanced pension benefits approved by the Board of Supervisors in 2002 and rolled out for public safety workers in 2003. Higher benefits approved for other workers began in 2004.

Both deals granted a higher percentage of compensation for every year worked and lowered the retirement age, to 50 for public safety workers and 60 for all other workers.

Outrage over public pensions is sweeping through California and the nation. Many workers in the private sector, who've seen their employers shed defined-benefit pension plans in favor of 401(k)-type plans, are demanding that government do the same.

One former county sheriff who gets substantially less in retirement than his successors called the higher county pension amounts "obscene."

"Not only the pension piece, but the salaries," said Mark Ihde, a two-term sheriff who retired in 1997 with a pension that is now little more than a quarter of the retirement earned by the latest retiring sheriff.

The scrutiny comes in an era of austerity for government, with less money available for roads, parks, libraries, health and welfare programs and a range of other services. Higher retirement benefits were granted years ago, in part to attract and retain workers, but also as a strategy intended to slow the rising pace of salaries. Now those deferred costs are coming due.

The higher pensions promised to the current workforce are a key factor, along with investment losses, in the county retirement system's long-term shortfall, now set at $353 million. The system's investment portfolio is valued at $1.8 billion.

Taxpayer costs for county pensions, including payments on bond debt, meanwhile, have risen 401 percent in the past 12 years, to $87.2 million a year.

The employees' share of pension costs rose 152 percent, to $37.3 million, in the 10-year period ending in 2010, the latest year for which those figures are available.

Newly disclosed county retirement data show career workers account for a majority of the benefits paid by the system. And the average pension for career workers is continuing to rise rapidly, putting further pressure on strained public services.

"It's not a pretty picture," said Valerie Brown, the only current Board of Supervisors member who was serving when the board unanimously approved the higher benefits.

After Sonoma County pension officials rejected requests to release individual records that could shed light on retirement costs, The Press Democrat in 2010 sued the Sonoma County Employees' Retirement Association to gain access to those records. A local judge and an appellate court panel subsequently ordered the data to be made public.

The first batch of records disclosed last year showed that 98 individuals in the system draw annual benefits of $100,000 or more, including three county officials who now get pensions topping $200,000.

A Press Democrat analysis using more detailed retirement data received this year shows how those higher benefits for career workers are driving up pension costs.

The newly obtained records cover 3,992 county retirees, special district workers and their beneficiaries. The additional information shows the effect in the past decade that more generous pension formulas, years of service, classification as a public safety or "general" employee, salary hikes and the layering of premium pay and perks into pensions have had on retirement benefits.

The records show:

The system's 1,293 career retirees going back to 1969 — those with 20 or more years of employment — account for 32 percent of the members but 57 percent of the benefits paid out annually. Their $52,800 average pension is 76 percent higher than the overall average of $30,000.

Pension officials and labor representatives often cite the lower figure to counter critics protesting costly pensions. But the lower figure includes those who worked as few as five years and those who left the county workforce as far back as 1969.

The average benefit for the 789 career workers who retired from 2002 through 2011 is $64,600, up from $34,900 in the previous decade.

Workers who've retired since 2000 with 20 or more years of service are getting on average 75 percent of their highest year's compensation. The average for all workers retiring since 2000 is 50 percent of their highest year's pay.

Among the 152 career public safety workers who retired from 2002 through 2011, the average pension is $80,200, up from $47,300 in the previous decade.

Among the 637 career general workers who retired from 2002 to 2011, the average pension is $60,900, up from $31,700 in the previous decade.

101 of the 2,247 workers — 4.5 percent — who've retired since 2000 get paid more in retirement than they received in base salary and other ongoing supplemental pay and cash benefits while on the job. The individuals range from the system's top earners to retirees getting pensions of $47,000. The average pension for the group is about $99,000. All have more than 30 years of service.

New era

A 1997 California Supreme Court decision began the acceleration in public pensions by vastly expanding the range of pensionable pay for government workers. The state and local governments followed soon after with a wave of decisions that sharply increased pension formulas, thus granting enhanced retirement benefits.

The result in Sonoma County has been pensions for recent career workers that can be shockingly higher than those received by career workers who retired before the upgrades.

The disparity cuts across the county workforce. A deputy district attorney who left in 2004 with 25 years, for example, gets a $95,000 pension — 60 percent higher than one received by a colleague who retired with almost 29 years on the job in 2001.

Among two engineering technicians, each with more than 37 years of service, the employee who retired in 2001 gets $46,000 a year while the one who stepped down in 2009 gets $82,000, records show.

Retired Sheriff's Capt. Erne Ballinger left in 2000 after nearly 33 years of service with a retirement of $84,000. Four years later, a captain with two fewer years of service retired with a $120,000 annual pension.

"That is a rather substantial difference," Ballinger said. "The fellows living with lesser amounts probably don't feel completely happy."

Salary hikes in intervening years and differences in pay among individuals in the same job category contribute to the disparity. The average county salary increased 60 percent from 2001 to 2010, retirement system records show. By comparison, the Consumer Price Index rose 23 percent, according to the federal Bureau of Labor Statistics. The bureau's data also shows that mean wages for all workers in Santa Rosa rose 32 percent during that time while management wages rose 38 percent.

Steep rise

Enhanced pension benefits are likely the dominant factor in the disparity, retirement experts say.

The richer benefit formulas tend to amplify the pensions of management employees more than rank-and-file because of management's higher overall pay.

The result is sometimes startling differences between pensions of top officials who retired on opposite sides of the benefit change.

Bob Beach left as general manager of the county Water Agency in 1994 with 17 years of service. He gets a pension of just over $45,000, including cost-of-living adjustments. His successor, Randy Poole, who also was the agency's chief engineer, retired in 2010 with 19 years of service. He gets a pension of nearly $128,000.

Among the county's retired sheriffs, the upward march in pensions is even more stark.

Ihde retired in 1997 with nearly 25 years of service. He gets a pension including adjustments of $69,000. His successor, Jim Piccinini, retired in 2003 — the first year of the benefit bump for public safety — with just over 35 years of total service. He gets a pension of nearly $141,000. His successor, Bill Cogbill, retired at the start of last year with 33 years of service. His pension is $239,311, the second-highest in the system.

The top benefit is earned by Rod Dole, the former auditor-controller-treasurer-tax collector, who also retired last year. He gets $254,625 — 74 percent more than the highest pension earned by a retiree who left before benefits were increased.

Pension debate

The higher pensions have sparked outrage among taxpayers protesting the drain on public coffers, and are defended by employees and labor leaders who say the numbers don't tell the whole picture.

"I don't feel guilty. I've done my fair share," said Roger Rude, who retired as a sheriff's lieutenant in 2006 with nearly 29 years of service with the county and a pension of almost $102,000.

He benefited from the enhanced formula that gives public safety workers the ability to retire at age 50 with 3 percent of their pay for every year worked — effectively 90 percent of their highest year's compensation based on a 30-year career. The higher benefit became standard when the state and local governments improved benefits more than a decade ago.

The corresponding Sonoma County benefit for general workers allows retirement at age 60 with 3 percent of their highest year's pay for every year worked. That benefit is higher than in most government workforces in California.

Among both groups, careers longer than 30 years and cash-outs of accrued vacation, holiday, compensatory and sick time, along with other bonuses, can boost pension amounts over 100 percent.

The cashouts are a larger factor among safety workers, boosting pensions by an average of 6 percent, according to retirement officials.

Rude, the retired sheriff's lieutenant, defended the better retirement now received by public safety workers.

"Those who I have worked with put their lives on the line, numerous times ... and their health," he said. "I don't in any way feel like what we earned over the course of our career is inappropriate. We negotiated in good-faith terms."

But critics say those negotiations smacked of self-interest and lacked any serious consideration for how the higher benefits might affect public finances in the long term.

They have hit on a key perk — the higher benefit formulas were applied retroactively to all current workers at the time, meaning career employees could retire in year one of the higher benefit after decades paying for a lower pension. More than 100 career employees did exactly that.

A cost-sharing deal with workers was meant to help pay for the better benefit. It boosted employees' contributions by 3 percent. About 12 percent of county workers' paychecks go toward pensions, one of the highest rates among their government colleagues.

Surplus investment income was to kick in the rest needed to cover the richer benefits. But that was wiped out first by the dot-com bust in 2000 and then by the 2008 stock market free-fall, which erased a third of invested pension fund assets. Two rounds of county borrowing to prop up the fund with a total of $520 million in pension bonds have left taxpayers holding the bag, critics say.

"It's the unions influencing elected leaders. And it's management using rank-and-file to get what they want. And taxpayers are being carved out of the loop," said Marcia Fritz, a pension overhaul advocate who leads the California Foundation for Fiscal Responsibility.

Labor's defense

Labor leaders say public workers are being made scapegoats for economic woes caused by Wall Street. They also say the six-digit pensions of managers have skewed overall averages.

The average pension for the largest group of those represented workers, Local 1021 of the Service Employees International Union, is $24,000, said Lathe Gill, the union's Santa Rosa-based area director. The retirement records obtained by The Press Democrat do not contain information about union membership. Of the 758 career employees who retired in past decade under the enhanced benefits, only 40 retirees are getting less than $30,000, records show.

County workers also pay into and get Social Security benefits.

Gill and other labor leaders say they hear little grumbling about the differences in retirement among generations of workers — including future county employees who face the likelihood of lower benefits because of present costs.

A more common complaint concerns a 2008 reduction in county medical benefits, which retirees are fighting in court. That change actually boosted pensionable pay for current workers because it involves a monthly $600 cash allowance to employees.

Gill defended the disparity in pensions resulting from the formulas adopted in the past decade. "It isn't fair," he said, "but lots of things in life aren't fair. People wanted to share in the benefits of prosperity. Times were roaring ahead. Do I look back and think it was a mistake? I don't know that I do."

But Ihde, the retired sheriff, says county leaders erred in their decision to improve benefits.

"When I was there, I was saying 'We can't afford this,' " he said. "I do believe public safety employees deserve an enhanced pension, but not at this level."

Wrangling over changes

The debate over public sector pensions and the dilemma of what do about soaring retirement costs is not unique to Sonoma County.

Hundreds of local governments that granted higher benefits a decade ago are staggering as pensions take up a greater share of payroll and put a tighter squeeze on staffing for current public services.

For Sonoma County, the $87.2 million going this fiscal year to pension costs, including bond payments, represents 18.5 percent of total salary and benefit expenses. That share is up from over 6 percent of total payroll a decade ago.

The costs have hit as revenue has dried up. Property tax — the county's main source of discretionary money — has been at a historic low, while sales tax has been flat and state and federal funding has shrunk.

"It's less doomsday than today. It's real. The revenue just isn't there," said Harvey Leiderman, a San Francisco attorney who advises the state's largest retirement funds, CalPERS and CalSTRS, as well as a number of local government pension systems.

Advocates pushing for pension system overhaul say changes are needed to lower investment risk and reduce benefit costs.

"This is not a partisan issue. It's a math issue. And those of us who understand math know that it doesn't add up," said Bill Pollacek, a retired treasurer-tax collector for Contra Costa County who has been active on pension overhaul campaigns. "Unfortunately, it's going to become an intergenerational debt."

Some critics have pushed for cuts that would affect current workers, seen as the quickest way to bring down costs. There are about 3,400 employees in Sonoma County government, all of whom are in line for the higher retirement benefit provided they work five years.

Yet moves affecting promises to existing workers and others proposed elsewhere that would affect retirees are almost certain to run into legal challenges.

Changes the county is pursuing in contract talks and in revisions to state law include, for all employees, capping benefits and scaling back pension spiking created through extra pay and perks, and for future workers, reducing benefits and raising the retirement age. A move to add four more Board of Supervisors' appointees to the pension system board, county leaders say, would increase public oversight of the system. Supervisors currently appoint four of the panel's nine voting members.

Supervisor David Rabbitt, who serves on the pension board, also has pushed retirement officials to consider lowering the system's market risk, a move that could jack up taxpayer contributions in the short-term but could prove more effective in controlling underfunding.

Income from the system's $1.8 billion investment portfolio was flat in 2011, essentially adding $140 million to the long-range unfunded liability. The 20-year returns to the system are now at 6.8 percent a year, significantly less than the assumed return rate of 7.75 percent.

"There is a structural problem with the system going forward," Rabbitt said three weeks ago, following another forecast of increased county pension costs well into the future.

Concessions, concerns

Labor leaders have conceded some changes may be warranted. Returning to a retirement age of 55 for safety workers is one, a local representative said.

But employee representatives remain concerned about tinkering with guaranteed pensions, a bedrock benefit of government work. The 401(k)-type defined contribution plans preferred by private-sector employers offer less retirement security, labor representatives say, and often fare worse in market downturns.

"These issues all go to questions of what people want to pay for" in government, said Chris Platten, a San Jose attorney who represents public-sector labor groups. "Over time, these pension systems will right themselves. Are we still going to have a pig-in-a-python problem in the short-term? The answer is yes, and the reason is the fiscal disintegration of Wall Street."

Brown, the veteran county supervisor and former state legislator who is retiring at the end of this year, also assigns blame to the nation's bankers.

She has remained the one board member most skeptical of calls for retirement system changes. But the picture of sharply rising pensions among career workers gave her pause in an interview last week.

"It can't be sustained," she said.

Decisions she helped make 10 years ago were flawed by rosy assumptions of investment returns that did not materialize.

"I certainly have discomfort about it now," she said.

Past members of the Board of Supervisors who also took part in those votes — Tim Smith, Mike Reilly, Paul Kelley and Mike Kerns — have not returned previous calls for comment. All but Kelley, who has not filed for retirement benefits, receive pensions under the enhanced formula.

Brown, in turn, offered her assessment of the future, saying government has gone through "a huge come-to-Jesus moment."

"The cost of some services can't be supported; people aren't going to get what they expect to have paid for. Pensions are certainly a part of that."

"We're stuck with a reassessment that's going to be painful," she said.

(News Researcher Teresa Meikle compiled and analyzed retirement records for 3,992 retired workers and beneficiaries for this report. Her work also serves as the basis for the graphs presented with the report. Staff Writer Randi Rossmann contributed to this report. You can reach Staff Writer Brett Wilkison at 521-5295 or brett.wilkison@pressdemocrat.com.)