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By Timm Herdt, Ventura County Star, March 6, 2012
Kern County Chapter President Regina Kane released this statement Tuesday:
The Los Angeles Times reported this weekend that many Kern County retirees benefited by “spiking” their pay.
This story was bad journalism, plain and simple. It was based on an incomplete understanding of how pensions work.
Spiking is when employees and employers manipulate a year of pay to make it higher than normal. Spiking is a problem for pension funds because employers and employees pay into funds based on every year’s compensation. If a worker drives his or her pension up based on only one year, then the worker will collect more money than the pension is prepared for.
Most real spiking is done only by top managers. For example, the Kern County Board of Supervisors made Guy Shaw a director for his last year on the job. When he retired, his position became a lower-paid manager. By giving Shaw a higher pay rate, the Supervisors spiked Shaw’s pension.
But much of what the L.A. Times calls spiking is not. For example, a worker with more than 20 years on the job gets longevity pay. That is part of a worker’s compensation, and is in fact used in the total salary calculations to determine how much a worker contributes to the pension fund.
But the Times excluded longevity from base pay, claiming anyone receiving longevity pay was “spiking.”
The same went for higher classification pay. People who worked for years in a higher classification, paying into the pension system for that pay, were considered “spiking” by the Times.
Spiking is a real problem, and SEIU supports efforts to end it. But the truth is that spiking is rare, and the vast majority of Kern County workers receive the pension they worked for and paid for, nothing more.
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