By Ginger Rutland
grutland@sacbee.comPublished: Sunday, Jun. 21, 2009
SourceAs far as the leaders of public employee unions in California are concerned, Marcia Fritz is public enemy No. 1. A certified public accountant who specializes in government work, Fritz is an expert on pensions.
A diminutive woman with pale blond hair and perfectly manicured nails, she is the numbers cruncher behind the California Foundation for Fiscal Responsibility, an advocacy group that seeks to reform California's runaway public pension system.
Last month, the group launched its $100,000 Pension Club, a Web site that posts the names, former employers and annual pension amounts received by retired state and local government workers in California who collect more than $100,000 in retirement pay.
"Anyone who looks at our $100,000 Pension Club is in shock and awe," Fritz says. "People have no idea the level of benefits we've promised people; even elected people were not aware."
A typical government worker in California can retire at age 55 or 60 and collect 70 percent or 80 percent of their salaries or more. Most public safety workers, police officers and firefighters, can retire in their early 50s with 90 percent of pay and, in some local jurisdictions, with pensions worth 100 percent of their final salaries.
The $100,000 Pension Club that Fritz has compiled already includes more than 5,000 former government workers and continues to grow daily (www.californiapensionreform.com). Locally, the former president of California State University, Sacramento, Donald Gerth, made the top 10 on Fritz's list, weighing in at No. 3, with $278,555 a year in retirement pay.
Some governments, Sacramento County among them, have so far refused to disclose the names of their retirees. Fritz and her group are fighting efforts around the state to keep that information secret.
But even incomplete, the list proves what Fritz already knows, that the public pension system in California is too rich. If it is not reined in, she believes, it will bankrupt the state and local governments.
She has reason to know. In 1999, just as the Legislature was contemplating approving sweeping retirement benefit increases for state employees, her accounting firm was hired to help assess the staffing needs of the actuarial services division at the California Public Employees' Retirement System. The division is supposed to determine what various retirement formulas would cost state and local governments. Those determinations are calculated based on workers' expected ages at retirement, projected pay rates, length of service, life expectancy for them and their spouses and benefit levels.
In 1999, when Fritz joined the team of accountants reviewing the division, she says CalPERS' actuarial work force was in disarray, short-staffed, ill-trained, hampered by sizable backlogs, sloppy standards and procedures, and too few safeguards.
In the midst of that turmoil, key members of the division were pulled away to analyze Senate Bill 400, the bill that authorized the big pension benefit increases. There was no way, Fritz says, "they could have possibly given anything reliable to the Legislature."
Still, the analysis the division provided was used to justify the pension benefit increases. And the magnitude of the miscalculations is staggering.
The actuaries predicted back then that by 2009-10, taxpayer contributions to the public employee retirement fund would amount to just $258 million, only 1.85 percent more than the cost of the retaining the older, lower benefits. Instead, the state's retirement contributions for the coming fiscal year have been set at $3.3 billion, 12 times what the CalPERS' actuarial staff predicted.
Some of that difference results from misjudging the cost of the benefit increase. Much of it stems from the recent market crash, which left investment returns far below the level needed to maintain current benefits without increasing the public's contribution to the fund.
Fritz is appalled but not surprised. She doesn't blame public employee unions for pension excesses. She thinks non-union managers whose salaries and benefits are tied to the rank-and-file's pay and benefit rates are even more to blame. "Managers didn't stand in the way of unions because they were able to personally benefit from the union demands," she said.
A wife and mother of a grown son, Fritz talks up her concerns about pension excess before taxpayers groups, business leaders, government officials and reporters, wherever and whenever she can get her message out. She is aware that her activities are risky. She knows she's probably lost clients, especially local government clients whose governing bodies are heavily influenced by public employee unions.
But she doesn't seem intimidated. She comes from pioneer stock. Her family owned the property Capitol Park is built on. They farmed in Citrus Heights in the 1800s. A California native, she cares about the state and worries about what pension greed will do to it. "My roots are in California," she says. "It bothers me this is going to break our state."