Retired bureaucrats in California are receiving an astonishing $6.3 billion annually in pensions, with some pulling in as much as $462,000 a year while doing nothing. This comes amidst a significant public pension shortfall in the state, which has escalated to at least $153 billion. According to reports, over 63,000 retired public workers earn at least $100,000 annually from the California Public Employees’ Retirement System (CalPERS), the largest public pension fund in the country.
This extensive financial commitment, combined with ongoing efforts to raise pension payouts, has drawn criticism from local officials who also benefit from CalPERS. They argue that these rising costs strain local government budgets, forcing them to cover escalating pension expenses.
Santa Barbara County Supervisor Bob Nelson highlighted the repercussions of such pension packages during a conversation with lawmakers. He noted that his county now spends an additional $100 million each year just to manage increasing pension payouts, recalling how similar packages nearly bankrupted the state and numerous municipalities in the 1990s and early 2000s.
He further mentioned the tangible impacts of these costs, which result in cuts to public safety staffing provisions and fewer resources for essential areas like mental health, homelessness, and criminal justice reform.
Interestingly, the number of pensioners earning six-figure pensions has more than doubled since 2018; back then, more than 26,000 were part of this group. To put it in perspective, just two decades ago, in 2005, only 1,841 retirees were receiving such significant benefits. Experts are now labeling this pension boom a financial ticking time bomb, especially in light of a law signed by former Governor Gray Davis in 1999 that greatly increased benefits for state employees.
Reflecting on the decision he made in 1999, Davis later stated, “If I knew then what I know now, I would never have signed SB 400.” This law has had long-lasting implications, as CalPERS functions as a defined benefit pension plan relying on a mix of employee contributions, investment growth, and government employer funds—essentially taxpayer dollars.
Zachary Christensen, who leads the Pension Integrity Project at the Reason Foundation, remarked that the system is currently short $153 billion in assets needed for promised benefits, marking the largest pension debt in the country. He emphasized that the growing frustration among taxpayers regarding these lavish benefits will likely escalate in the future. The average annual pension benefits amount to $44,209, but the number of individuals receiving benefits exceeding $300,000 has been on the rise.
In 2023, just 21 retirees fell into this category, which grew to 36 last year. At the top of the list is Curtis Ishii, a former managing investment director at CalPERS, who received $462,784 last year after retiring in 2018 following over four decades of public service. His pension benefits are significantly tied to his last paycheck, which was a hefty $688,000 in 2017, given that pension calculations are based on salary and years of service.
Pursuing the top three pensions, Michael D. Johnson, a former Solano County administrator, was next with a $426,028 pension last year. He started his role in 1992 and saw his benefits grow over the years through annual cost-of-living adjustments. Lastly, Steve Maguin, previously the chief engineer and general manager of the Los Angeles County Sanitation Districts, received $418,614 last year. He passed away in January 2023, having retired in 2012.
Other notable pension recipients include Joaquin Fuster, a UCLA professor, earning $385,479.57, and Leroy J. Jackson, the city manager of Torrance, bringing in $369,485.19. Both benefitted from their roles within public sectors before moving on to other ventures; for instance, Jackson currently advocates for public power systems.
Interestingly, while some of these high pension payouts might be phased out due to a 2013 law linking public pensions to IRS limits, numerous individuals are retiring with benefits established before these regulations were put into place. Despite a reported increase in total CalPERS payouts—from $29.1 billion in 2021-22 to $34.6 billion in 2024-25—the financial pressure to meet pension obligations persists.
Experts warn that by remaining a major political force, unions push for higher benefits even as challenges loom. Notably, Governor Gavin Newsom recently vetoed a bill that sought to expand pension benefits for police and firefighters, explicitly stating he wishes to avoid repeating past mistakes linked to the pension crisis before the 2013 law.
California may continue to see substantial public pension payouts for another decade until the cohort affected by the 2013 reforms begins to retire fully. Meanwhile, unions will likely continue advocating for increased pensions, leaving many unsure about the financial sustainability of these programs.
