Public employee pensions are a popular topic of discussion. Public perception seems to be that all Sonoma County retirees enjoy six-figure pensions. This is partly due to recent coverage in The Press Democrat of the large pensions of some retired elected officials and other county managers. Service Employees International Union believes that not enough distinction has been made between the pensions of managers, and those of the service-providing workforce, which includes our members. Not all public pensions are created equal.
Very few SEIU members have salaries high enough to qualify for the six-figure pensions cited in most of the recent coverage. Our members also do not receive most of the pensionable benefits that allow some individuals to have pensions much higher than their salaries.
The average pension for all SEIU retirees who retired between 2008 and the present is less than $40,000 annually and many receive less than $20,000. Our research shows that the average pension of SEIU retirees with at least 20 years of service and who retired since 2008 is $51,095 annually. This is significantly lower than the $68,000 average annual pension for all 20-year career retirees cited in recent articles. SEIU members, as with all county employees, contribute nearly 12 percent of their salaries toward their pensions.
The Sonoma County Board of Supervisors and county administrator could take a large step to reduce salary and pension costs by seriously addressing the ratio of line-staff employees per manager. The ratio at the county is currently fewer than six employees per manager and has been steadily declining since the 2000-01 fiscal year, when the ratio was 7.3 employees per manager.
Between fiscal year 2007-08 and 2011-12, the number of non-management employees declined by more than 16 percent, while management declined by just over 8 percent. If management positions had declined at the same rate as employee positions, there would be 46 fewer managers. The potential salary savings is nearly $7 million annually, based on an average total compensation (wages, benefits and costs) of more than $151,000 for currently allocated management positions.
Greater savings could be realized by increasing the ratio of employees to managers. Based on staffing levels of 2011-12, an increase from the current ratio of 5.8employees to 7.3 employees per manager (the ratio from 2000-01), represents a decrease of 105 managers, with potential annual savings of nearly $16 million.
Since managers have higher salaries and more and larger pensionable benefits (including car allowances and county-paid deferred compensation) than non-management employees, these proposed reductions in management positions would also lead to significant savings in future county pension costs.
The discussion of staff-to-management ratio is not unique to Sonoma County. Oregon recently enacted legislation that requires state agencies with at least 100 employees to have employee-to-manager ratios of 11 to 1. Texas has had a similar law since 1997. In both cases, the ratios before enactment were 6-to-1, which is very close to Sonoma County's current ratio of 5.8-to-1. Agencies in both states can apply for lower ratios based on industry standards.
The laws passed by these states seem to indicate that a ratio of 6-to-1 is perceived within some government agencies as inefficient and unsustainable and that real cost savings can be realized by restructuring and reducing management levels. SEIU believes that the county would be fiscally stronger and able to provide more robust programs and services if it invested more wisely the funds it already has.
(Earl Gwynne, a staff member with Service Employees International Union Local 1021, is a Sonoma County retiree who formerly owned Revelation Natural Foods Restaurant in Santa Rosa for 16 years. He lives in Healdsburg.)
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