Paying for Pension Mistakes

We hear much these days of unfunded this and unfunded that. One of the mammoth concerns regarding the latest proposed health care legislation direction is the question of who will pay. Leaving aside the future laws which may be passed, we have some issues on hand right now. Once again, California provides us with an outstanding example (via Betsy’s Page) by Mark Tapscott:

Maybe there really is a pot of gold at the end of the rainbow, at least if you are one of the nearly 10,000 retired California public sector employees pulling down tax-paid pensions of $100,000 or more.

A total of 6,133 of the members of the “$100,000 Pension Club” are covered by the infamous CALpers system that critics often cite as among the most politicized and mis-managed public retirement programs in the country. You can see all of the names of the individuals in the club and their monthly and annual stipends here.

Be prepared for a shock, though, because you may not believe the numbers you find. The top 10 CALpers retirees include Bruce Malkenhorst whose $499,674 annual pension puts him on top of the list. Then there’s Joaquin Fuster at $296,555, in second, and Donald Gerth in third with $278,054.

Nearly half a million annually from a taxpayer funded pension for the top person. That’s cause for outrage. No, I’m not expressing class envy here. I’m stating a fact. California is so close to bankruptcy that it simply cannot continue to spend money (which unlike the federal government, it cannot print). Granted, a half a million is a small thing compared with the California deficit, but it is something.

Interestingly enough, Bruce Malkenhorst has a bit of public history. He was apparently (according to Forbes) one of the those who ran things in the very small town of Vernon, CA:

Only 92 people live in Vernon. There are no parks, schools, libraries, health clinics or grocery stores. The only four restaurants close by 4 p.m. By sundown the 44,000 workers who commute here have all fled the stench.

Vernon’s leaders like it that way. California’s tiniest city, if you want to call it a city, is one of the nation’s most lasting and efficient political machines, run almost entirely for the benefit of a handful of rarely opposed, extremely well-paid politicians. Vernon should have been subsumed long ago into the surrounding city of L.A, but its independence is a strange and stark example of how a democracy can become a dynasty.

Vernon is run by two families: the Malburgs and the Malkenhorsts, neither of which agreed to be interviewed. The bespectacled Leonis C. Malburg, 77, whose grandfather founded Vernon in 1905, has been mayor for 33 years. Bruce Malkenhorst, 71, was for 32 years the city administrator as well as clerk, finance director, treasurer, redevelopment agency secretary and chief executive of the utility Vernon Light & Power. The city was reportedly paying him $600,000 a year, more than twice what L.A.’s mayor earns, until he resigned all posts unexpectedly and without public announcement in 2005. By most accounts Malkenhorst still pulls the strings. His appointed successor is his 42-year-old son, Bruce Jr.

Go read the whole piece.

I am by no means castigating all who would get benefit from public pensions. I am a firm believer in working hard to excel and get ahead. I am also a firm believer that government–at all levels–should work for the citizens and that, as such, the public servants should be held to strict accounting for how they spend the taxpayer’s funds–and that includes pension funds like California’s.