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    If Councilmembers Govern Redevelopment Agency & Set Their Compensation Above Current Council Salary, This Could To Some Extent Increase Their Retirement Pensions, CalPERS Says

    (December 11, 2004) -- If LB City Councilmembers vote on December 21 to take over governing LB's Redevelopment Agency Board, and subsequently vote to pay themselves an amount exceeding their current Council salary as compensation for their new RDA positions, this could increase their taxpayer-paid retirement pensions, a spokesperson for California's "Public Employee Retirement System" (CalPERS) has told

    It's impossible to know with precision the exact amounts for each individual because CalPERS pension calculations depend on the interaction of several factors. However (with the caveat that pension calculations are complex and vary individually on many factors including prior or subsequent CalPERS covered employment) in general CalPERS pensions are based on three factors: service (time or years spent), age at retirement...and average salary calculated over a one or three year period using the highest salary within that period, said Darin Hall, CalPERS spokesman.

    The Redevelopment Agency Board of the City of Long Beach is legally a separate entity from the City of Long Beach...and Councilmembers (acting as RDA Boardmembers) would have the legal power to decide their compensation for their RDA duties.

    So what might this mean in the real world? It's impossible to know with precision without knowing more about specific individuals' work circumstances (caveats above) and without knowing what compensation levels Councilmembers might choose (anyone's guess at present).

    LB taxpayers currently pay Councilmembers a little over $25,000 a year plus health insurance coverage and perks. If Councilmembers set their RDA compensation at equal to their Council salary, that would mean more money for them each month, but absent other factors wouldn't necessarily fatten their pensions. However, if they (hypothetically) set their RDA compensation at higher than their Council compensation, that could increase their pensions.

    The basic CalPERS pension calculation involves multiplying years of service credit by an age factor/benefit factor that increases with age. For most (non-public safety) LB city employees who retire at the minimum age of 50, it's 1.1% times every year of service; at 55 it's 2%; at 63, it's 2.5%. Taking (hypothetically) a 55 year old employee who has 20 years of service, the calculation is 2% times 20 = 40%...meaning that employee stands to receive a taxpayer-paid pension amounting to 40% of his/her average salary calculation. ).

    If (hypothetically) Councilmembers set their RDA compensation 50% higher than their Council compensation and a Councilperson retired at age 55, the 50% increase would boost their pension calculation by 2% times the number of years of that person's CalPERS covered employment (some Councilpersons have held other CalPERS covered jobs). In rough terms (again hypothetically) 20 years of CalPERS covered employment would produce 40% of the 50% increase, or 20% of the increased RDA compensation averaged over a one or three year period using the highest covered salary.

    Council and RDA compensation amounts would stand on their own and would not be added (summed) to calculate pension benefits, Mr. Hall said.

    The CalPERS system, created by the state legislature, gives most local and state government employees generous taxpayer-paid pensions exceeding what other taxpayers receive under federally mandated "Social Security." CA public employee unions are among the heaviest contributors to CA political campaigns.

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