Spurred by Bell Scandal, CalPERS Urged to Release Salary Pay to Prevent Abuse

(August 12, 2010) — California Treasurer Bill Lockyer has asked the $211.4 billion California Public Employees Retirement System (CalPERS), the biggest US public pension fund, to report the 100 highest state and local government salaries in order to help prevent pay abuses.

The proposal was spurred by an uproar over pay rates for officials in the lower-income city of Bell, California, who earned inflated salaries.

“The Bell fiasco shows that when a few greedy public officials are allowed to operate outside public view, they can turn taxpayers into their personal ATMs,” Lockyer said in a statement. “That’s disgraceful and it dishonors everybody else who works hard and makes sacrifices to keep public services going.”

According to a report obtained by The Los Angeles Times, California’s $204.4 billion state pension fund was aware of inflated pay to a Bell, Calif., city administrator – Robert Rizzo – and other top city officials but did not take action. Now, they are in the process of reviewing the pension benefits of system participants who earn more than $400,000 a year. On August 6, CalPERS said that it was suspending the pension benefits of the Bell officials who are under investigation.

California Attorney General Jerry Brown has subpoenaed the personal financial records of present and former Bell officials, The Times has reported, noting that he’s reviewing the possibility of voter fraud.

Lockyer hopes greater transparency from CalPERS regarding government pay will prevent pay abuses that increase retirement benefits by having officials retire at their highest salary level. “These recommendations have a simple goal: to help ensure taxpayers know how much they’re paying the folks who work for them, and how those payments affect their obligation to fund retirement benefits for those employees. CalPERS has an opportunity to tighten its compensation reporting policy and regulations, and I intend to make sure we don’t pass up the opportunity,” said Lockyer.