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BENEFITS BIND

Contrasts can stir resentment

June 10, 2007|Catherine Saillant | Times Staff Writer

CALIFORNIA'S public workers -- police, firefighters, teachers, office clerks, managers -- are better paid and receive far more generous retirement benefits than private-sector employees, a study found.

And the public knows it, says former Republican Assemblyman Keith Richman.

"Individuals in the private sector are working well into their 60s, and sometimes their 70s, and are wondering why they are still working hard and paying taxes to provide extravagant pensions for public employees," he said.

A 2005 study by the nonpartisan Employee Benefit Research Institute, a respected Washington, D.C.-based clearinghouse on issues concerning pay and benefits, found that wages for California's state and local government workers overall were 40% higher than those of people in the private sector and fringe benefits were 60% higher.

There are many reasons why public workers earn more, the report's authors said. Service occupations such as police officers and teachers require higher levels of education or involve greater physical risk.

Greater union membership and higher participation in health insurance and retirement programs also play a role.

But public employees' success, coupled with declining perks for private-sector workers, has created a growing benefits gap, the study found.

It's led to "retirement envy," Richman said. "The public is aware that government workers have become a special interest with protected benefits."

Public servants say they have become an unfair target in media stories detailing generous pension and post-retirement healthcare packages.

"We didn't cause the problem," Ann McWherter, vice president of a statewide group of retired public employees, wrote recently to a state commission that is looking into retiree healthcare costs. "We worked hard during our careers to earn these benefits and traded salary, time off and other benefits in exchange for our post-retirement benefits."

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(BEGIN TEXT OF INFOBOX)

Christine Lorenzi, 54

English teacher, John North High School (public), Riverside

Years on job: 25

Expected age of retirement: 60

Expected retirement income: By the time she steps down, Lorenzi will be eligible for a pension equal to 62% of her salary, or about $50,000 a year plus cost-of-living increases, until she dies.

Retiree health benefits: The Riverside Unified School District will pay her medical premiums until she is eligible for Medicare at 65. After that, Lorenzi plans to pay for her own supplemental policy.

Retirement plans: She and her husband, an attorney in Riverside County's child support division, will stay in Riverside to be close to their three children. Lorenzi said she will not have to work, but may volunteer or teach a class at the local community college.

"Teachers know they aren't going to be compensated for the hours they put in above and beyond the classroom. But they know a secure retirement is going to be there when their working days are over."

Judith Terzi, 64

French teacher, Polytechnic School (private), Pasadena

Years on job: 23

Expected age of retirement: 64, this year

Expected retirement income: Terzi estimates she'll get about $28,000 a year from annuities and investments in her 401(k). She expects to get $20,000 from Social Security. She didn't discuss her salary but said the school pays full-time teachers $80,000 to $85,000. It matched her 401(k) contributions up to 10% of her salary.

Retiree health benefits: Her employer does not provide benefits, so Terzi plans to supplement her Medicare coverage with an AARP policy that will cost about $180 a month.

Retirement plans: A poet, the Pasadena resident hopes to spend more time writing. She may return to work as a substitute teacher if money gets tight.

"I'm constantly checking my investments on the Net. I've reallocated and readjusted. It's stressful. For this kind of retirement plan, if you don't have money saved up, you're in big trouble."

*

Christine Lorenzi, 54

English teacher, John North High School (public), Riverside

Years on job: 25

Expected age of retirement: 60

Expected retirement income: By the time she steps down, Lorenzi will be eligible for a pension equal to 62% of her salary, or about $50,000 a year plus cost-of-living increases, until she dies.

Retiree health benefits: The Riverside Unified School District will pay her medical premiums until she is eligible for Medicare at 65. After that, Lorenzi plans to pay for her own supplemental policy.

Retirement plans: She and her husband, an attorney in Riverside County's child support division, will stay in Riverside to be close to their three children. Lorenzi said she will not have to work, but may volunteer or teach a class at the local community college.

"Teachers know they aren't going to be compensated for the hours they put in above and beyond the classroom. But they know a secure retirement is going to be there when their working days are over."

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Judith Terzi, 64

French teacher, Polytechnic School (private), Pasadena

Years on job: 23

Expected age of retirement: 64, this year

Expected retirement income: Terzi estimates she'll get about $28,000 a year from annuities and investments in her 401(k). She expects to get $20,000 from Social Security. She didn't discuss her salary but said the school pays full-time teachers $80,000 to $85,000. It matched her 401(k) contributions up to 10% of her salary.

Retiree health benefits: Her employer does not provide benefits, so Terzi plans to supplement her Medicare coverage with an AARP policy that will cost about $180 a month.

Retirement plans: A poet, the Pasadena resident hopes to spend more time writing. She may return to work as a substitute teacher if money gets tight.

"I'm constantly checking my investments on the Net. I've reallocated and readjusted. It's stressful. For this kind of retirement plan, if you don't have money saved up, you're in big trouble."

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