Pensions

Federal regulators should boost their oversight of 401(k) retirement plans and adopt reforms to ensure full disclosure of hidden costs that can cut deeply into the savings accrued by millions of American workers, a government report recommended Thursday. With companies rapidly abandoning traditional pensions, 401(k) plans have become a cornerstone of retirement security for an estimated 47 million people.

As California's public retirement funds reel from losses of nearly $100 billion in recent years and lack enough cash to cover their long-term costs, thousands of state employees are collecting government pension checks along with their paychecks. John Benoit, a Republican state senator from Palm Desert and a former California Highway Patrol captain, is one. He draws a $98,600 annual state pension while also collecting a six-figure salary as a lawmaker. David Turner retired as a state fire chief in 2004, went back to work for the state firefighting agency two days later and is still employed there.

Laventhol & Horwath, the nation's seventh-largest accounting firm, may be dissolved or put into bankruptcy, with some of its offices operating as independent partnerships or affiliating with other firms, partners said Monday. The firm, whose legal and financial troubles have mounted in recent months, declined to comment. But its 350 or so partners met over the weekend in Houston to decide the Philadelphia firm's fate.

Some Californians, angry that taxes have just gone up, IOUs are being issued and the state may be on its way over a cliff, find few things more infuriating than a big benefits package enjoyed by a government worker. So some of the 5,100 state and local government retirees who draw more than $100,000 annually are trying to lie low, preferring that the details of their receipts be kept private. And they have asked the courts for help.

A federal grand jury Friday indicted five former and current city pension board officials for their role in approving an investment scheme that has left the city struggling with a $2-billion pension deficit, the worst financial debacle in city history.

Collecting nearly $318,000 a year, the former head of Los Angeles' Department of Water and Power tops a list of 841 city pension recipients paid six-figure benefits, according to newly obtained records. And, like many of the retirees, former DWP General Manager Ronald Deaton will be paid more beginning this summer -- boosting his annual retirement pay to more than $327,000 -- because of annual cost-of-living increases, records and interviews show. New DWP pension data provide a fuller picture of the city's largest retirement packages at a time when City Hall is cutting services, the public is being hit with recession-driven tax increases to cover government budget shortfalls and rising public pension costs are under close scrutiny.

Alarmed over the spiraling cost of retirement benefits, Los Angeles' top budget officials have begun laying the groundwork for a June 8 city ballot measure that would dramatically scale back the pension benefits given to newly hired city employees. The plan sets the stage for a showdown between the city's elected officials and the labor unions that, in many cases, helped put them in office. Union leaders have already begun denouncing the proposal, saying the City Council cannot make the changes without returning to the negotiating table.

Another pension alarm bell is ringing in Sacramento, this time at the teachers retirement system, where the nation's second-largest public pension fund is reporting a $43-billion shortfall. The California State Teachers' Retirement System said that as of June 30, 2009, it could meet only an estimated 77% of its future pension obligations -- far less than the 100% recommended by actuaries. Known as CalSTRS, the fund took a big hit during the 2008-09 fiscal year, losing a quarter of its value.

For insurance agent Steve Adams, 51, the resentment began two years ago. As he worried whether his stagnant 401(k) account would be adequate for retirement, his wife's employer ended her pension plan, forcing her to rely on a 401(k) as well. Then New Jersey lawmakers raised his property taxes to maintain state workers' pensions. Last spring Adams joined a taxpayer group called Americans for Prosperity that is seeking limits on government employee pensions.

Baseball has been very good to Larry Dierker. The right-hander tossed a no-hitter late in his 14-year career with the Houston Astros before moving to the broadcast booth and eventually becoming the team's manager. He also wrote books, newspaper columns and a blog about the game.

Another pension alarm bell is ringing in Sacramento, this time at the teachers retirement system, where the nation's second-largest public pension fund is reporting a $43-billion shortfall. The California State Teachers' Retirement System said that as of June 30, 2009, it could meet only an estimated 77% of its future pension obligations -- far less than the 100% recommended by actuaries. Known as CalSTRS, the fund took a big hit during the 2008-09 fiscal year, losing a quarter of its value.

Among the new proposals outlined by the governor in his State of the State speech Wednesday: A $500-million jobs creation package that would fund worker training and payments to companies that hire new employees. A $10,000 tax break for first-time home buyers. Buyers of both new and existing homes would be eligible. A sales tax credit for green technology companies, such as those that produce solar panels, for purchase of manufacturing equipment. Fast-tracking major public works projects.

Alarmed over the spiraling cost of retirement benefits, Los Angeles' top budget officials have begun laying the groundwork for a June 8 city ballot measure that would dramatically scale back the pension benefits given to newly hired city employees. The plan sets the stage for a showdown between the city's elected officials and the labor unions that, in many cases, helped put them in office. Union leaders have already begun denouncing the proposal, saying the City Council cannot make the changes without returning to the negotiating table.

Hurt by big investment losses, California's two biggest state-run pension funds lost top long-term credit ratings from Moody's Investors Service on the insurance they sell to municipal governments to make it easier for them to sell bonds. Moody's blamed the downgrade on steep losses suffered by the funds, which could affect their future ability to meet obligations to retirees. "Today's rating action reflects our expectation that the cumulative back-to-back market value declines in the investment portfolios of both CalPERS and CalSTRS for the fiscal years ended June 2008 and 2009 will exacerbate long-term projected actuarial funding shortfalls, recent market gains notwithstanding," said Martin Duffy, Moody's vice president and senior credit officer.

A five-year package of raises being offered to employees of the Los Angeles Department of Water and Power could put a major burden on the utility's retirement system, according to a report prepared by the city's top budget official. The agreement, which contains five consecutive increases for DWP employees, could cause the utility's yearly pension contribution to increase by more than 150% by 2014, according to the confidential report, a copy of which was obtained by The Times. The DWP sets aside 30 cents for its pension expenses for every dollar it spends on salaries, City Administrative Officer Miguel Santana wrote in his report.

As California's public retirement funds reel from losses of nearly $100 billion in recent years and lack enough cash to cover their long-term costs, thousands of state employees are collecting government pension checks along with their paychecks. John Benoit, a Republican state senator from Palm Desert and a former California Highway Patrol captain, is one. He draws a $98,600 annual state pension while also collecting a six-figure salary as a lawmaker. David Turner retired as a state fire chief in 2004, went back to work for the state firefighting agency two days later and is still employed there.

Bank of America Corp. owes Kenneth D. Lewis, who is quitting as its chief executive at year's end, $68.8 million on his way out the door. Lewis accumulated that amount in his 40 years of work at Bank of America and predecessor companies. Topping the list of assets is a lump-sum pension benefit that was valued at $53.2 million in the bank's last public report on his holdings. That report, in a proxy filing this year, also said Lewis, 62, had $10.6 million in deferred compensation coming his way. And he will keep 305,000 shares of restricted stock that will vest over the next few years, which, at today's stock price of $16.34, is worth about $5 million.

Collecting nearly $318,000 a year, the former head of Los Angeles' Department of Water and Power tops a list of 841 city pension recipients paid six-figure benefits, according to newly obtained records. And, like many of the retirees, former DWP General Manager Ronald Deaton will be paid more beginning this summer -- boosting his annual retirement pay to more than $327,000 -- because of annual cost-of-living increases, records and interviews show. New DWP pension data provide a fuller picture of the city's largest retirement packages at a time when City Hall is cutting services, the public is being hit with recession-driven tax increases to cover government budget shortfalls and rising public pension costs are under close scrutiny.

A high-level Los Angeles pension official has recommended that the city pay off the cost of an employee early retirement package 10 years sooner than previously planned -- a move that threatens to throw the city's budget into disarray. Hoping to slash payroll costs and eliminate a $530-million budget shortfall, the City Council gave tentative approval last month to a deal that provides early retirement to 2,400 workers who belong to the Coalition of L.A. City Unions.

Some Californians, angry that taxes have just gone up, IOUs are being issued and the state may be on its way over a cliff, find few things more infuriating than a big benefits package enjoyed by a government worker. So some of the 5,100 state and local government retirees who draw more than $100,000 annually are trying to lie low, preferring that the details of their receipts be kept private. And they have asked the courts for help.