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The mystery of Jerry Brown’s pension

August 13th, 2010 58 Comments · posted by BRIAN JOSEPH, Sacramento Correspondent

Updated with comment from Brown’s spokesman

As Jerry Brown grabbed the spotlight with his criticism of Bell city officials and their outrageous pensions, The Watchdog got to wondering: How much will the Democrat for Governor make in retirement?

That, as it turns out, is a very difficult question to answer. After more than a month of investigation, the Watchdog can only say for certain that Brown and a handful of other top officials are eligible for generous benefits under a special pension fund so obscure that few people in government know how it works and many thought it had been eliminated 20 years ago by outraged voters.

Under the law, Brown should have accrued, at most, 16 years of service credit in this special fund, known as the Legislators’ Retirement System, or LRS. Actuarial statements produced by LRS, however, indicate that an unnamed person of Brown’s age and earning Brown’s exact salary has been credited with 25 to 29 years of service. The difference would mean tens of thousands of dollars in additional pension payments for Brown each year.

Brown’s campaign staff acknowledge the unnamed person sure looks like the gubernatorial candidate but have been unable to explain the discrepancy over service.

Officials at the California Public Employees’ Retirement System, which manages LRS, have similarly refused to cooperate, saying the law forbids them from answering questions about specific individuals. Meanwhile, The Watchdog has sought help from the offices of seven state lawmakers, one constitutional officer and one state department as well three outside pension experts and not one has been able to explain the discrepancy.

It’s a mystery as persistent as LRS itself.

THE PENSION SYSTEM THAT WON’T DIE

Founded in 1947, LRS was established by the California State Legislature as a special pension system to serve, well, members of the California State Legislature. Later, it was expanded a little to include constitutional officers, like the governor and attorney general, as well as four unelected legislative statutory officers who hold special responsibilities at the State Capitol. At the absolute most, no more than 136 working officials in state government could be members of LRS, which, by the way, offers pension benefits far more generous than what your typical state worker could earn.

For decades, LRS operated in relative anonymity, doling out pension and health benefits to retired lawmakers and other elected state officials, until the late 1980s, when frustration with state government reached a fever pitch in California. Riding a wave of discontent, voters in 1990 approved Proposition 140, a ballot measure which implemented term limits for state officials and eliminated pensions for state lawmakers.

Many thought Prop. 140 meant the end of LRS. Ted Costa, one of the driving forces behind Prop. 140, certainly did when the Watchdog spoke to him recently.

But Prop. 140 didn’t kill LRS, it merely shrunk it. Today, LRS membership is open only to the state’s eight constitutional officers, the four members of the Board of Equalization, the four legislative statutory officers and lawmakers first elected to the Legislature prior to 1990, who are grandfathered in. As of March, only 13 working officials were members of this independent pension system.

For that baker’s dozen, LRS is a good deal.

State Controller John Chiang, for example, currently is eligible for a $67,897 annual pension for a little over 11 years of elected service under LRS. Under the pension plan offered to typical state employees, Chiang would be eligible, at most, for $40,738 annually.

At the same time, LRS is enticing for retired lawmakers. In recent years, Assemblymen Charles Calderon, D-Whittier, and Jim Nielsen, R-Biggs, have come out of retirement to re-join the Legislature. By virtue of having first been elected to the Legislature prior to 1990, both are eligible to earn pension benefits for time in Sacramento while all other lawmakers are not.

WHERE’S JERRY?

But perhaps most eyebrow-raising is the service of a current LRS member identified in actuarial reports only as 65 years or older with 25 to 29 years of service and a salary of $184,301. CalPERS staff won’t talk about specific members, but with so few people in the system you can tell quite a bit from the actuarials.

Only two statewide elected officials have ever had the exact annual salary of $184,301, according to the California Citizens Compensation Commission: Superintendent of Public Instruction Jack O’Connell and Attorney General Jerry Brown.

Brown was born on April 7, 1938 — he’s 72. O’Connell was born on Oct. 8, 1951. He won’t turn 65 until 2016. The person listed in the actuarials appears then to be Brown.

The only problem is Brown should have only 16 years of LRS-eligible service: four years as Secretary of State (1971 to 1974), eight years as Governor (1975 to 1982) and four years as Attorney General (2007 to 2010).

The Watchdog has spent weeks trying to account for the additional time, to no avail. LRS rules don’t allow members to transfer in service credit accrued in other elected offices, so that eliminates Brown’s time as Oakland mayor or as member of the Los Angeles Community College District Board of Trustees. LRS members also can’t purchase “air time,” that is, they can’t add years of service credit by paying a fee, as is allowed in other public pension plans. There goes that option.

MYSTERY ENDURES

So how could Brown have additional time?

CalPERS official refuse to say. Spokespeople Brad Pacheco and Pat Macht have both told the Watchdog that even though CalPERS knows the answer, they are prohibited under the law from sharing it with the public.

“I am very sorry CalPERS staff can’t be more helpful, we have gone as far as we can go within the law,” Macht wrote in an email this week.

Brown’s campaign, for its part, says that the attorney general shouldn’t have more than 16 years of service in LRS. The Watchdog first asked the campaign about the discrepancy 3 1/2 weeks ago and while staff there have been polite, they haven’t gotten to the bottom of it nor have staff at the attorney general’s office been able to explain it either.

Campaign spokesman Sterling Clifford did tell the Watchdog that Brown started receiving an annual pension of about $20,000 when he turned 60 in 1998 and pocketed it every year until he assumed the attorney general’s office, when it was suspended. That means Brown’s received a pension on top of his $115,000 salary as Oakland mayor, but it doesn’t explain the discrepancy.

As best as we can tell, Brown would be eligible for an annual LRS pension of $73,720 if he has 16 years of service. If, somehow, he has 25 or more years, it would be $110,580.

We’re going to keep digging. Hopefully, we can get some answers.

UPDATE

Clifford contacted the Watchdog again and had a few more insights. He said that Brown was not a member of any pension system while he served on the community college board, but he did work one year as a clerk at the California Supreme Court, which combined with his time as Oakland mayor would give him nine years in the pension system open to all state workers. He also noted that pensions are calculated based on an employee’s highest salary and because the California Citizens Compensation Commission cut state officials’ pay last year (and very well could keep the pay cut in effect for the coming years), Brown’s pension has likely topped out.

He concluded his brief email with this reminder: “And of course if you are worried about paying out Jerry’s pension, the best thing to do is elect him Governor so he doesn’t collect it.”