Lavish Pensions for Upper Crust Court Execs

     SAN FRANCISCO (CN) With the bitter medicine of a $350 million cut to the judicial branch budget being administered this week, a lavish perk provided to the top 30 state court bureaucrats has come under fire. Unlike ordinary businesses, where it violates federal law to topload a pension plan, the state court bureaucracy gives its most privileged a full 22% ride on top of their rich salaries.

      Someone making roughly $200,000, such as the former financial director for the court administration, received $45,000 more, all of it paid for with public money tithed against the taxpayer.
     And while the ex-finance director has traded those benefits into a lesser local fund in his new job as head clerk in San Bernardino, the top thirty members of the central court bureaucracy, including its director and assistant director, continue to receive the lavish benefit.
     “Pension benefits shouldn’t be given out like candy,” said San Diego Superior Court Judge Daniel Goldstein.
     The trial judge said the former chief justice, Ron George, pushed for the benefit, which has been getting attention along with a series of controversies, which some call scandals, over budget priorities.
     Last October, 3.5 percent retroactive pay increases were handed out to eight out of ten of the AOC’s roughly 950 employees. That action came during a period when courts were being closed one day a month, staff were being furloughed or let go, and judges took a voluntary pay cut.
     Then in February of this year, with the financial crisis only getting deeper, the administrators received television coverage over another lesser privilege, distributing iPads for top-level staff. A memo from the head of the information services division at the administrative office said the distribution of the iPads was in order “to review tablet technology as an alternative to traditional laptops.”
     The iPads came on top of the laptops that were already issued to the staff. At the time, Associate Justice Terence Bruiniers suggested on camera that the alternative to the iPads was returning to pencil and paper.
     The freespending ways of the judiciary’s central bureaucracy from an extraordinarily expensive IT project to the relatively minor distribution of electronic gadgets are the subject of profound criticism from trial judges. They also descibe the accommodations for the brass in San Francisco as “opulent” and “plush,” while jurors in local trial courts spread through the rest of California work for next to nothing in what the trial judges describe as “relative shabbiness.”
     But the most controversial of the various privileges granted to the top administrators is the extraordinary pension benefit.
     A spokesperson for the AOC said, “It is not uncommon for public sector employers to pay for all or most of employee’s share of the retirement benefits.”
     It is, however, uncommon to topload a pension by almost a quarter of the salary, even for government institutions.
     In Oregon, for example, the State Court Administrator does not discriminate between the top and bottom employees, offering a modest six percent bump to salaries for pension payments. The agency’s benefits manager, who asked that her name not be used, said her office pays the six percent employee contribution for “everyone from Judicial Specialist I all the way up the Chief Justice of the Supreme Court.”
     “There’s nothing that the top level staff get that everybody doesn’t get,” said the Oregon adminstrator.
     Federal law does not allow employers to topload pension plans and discriminate in favor of the most powerful and best paid employees, said CPA Karen Covel with the San Diego firm Lauer, Georgatos & Covel in San Diego.
      “Qualified plans as we know them are subject to nondiscrimination rules, the intent of which is to ensure that the plan doesn’t favor higher-paid employees. All qualified plans maintained by private employers are subject to the nondiscrimination requirements,” Covel said.
      The California Legislature, however, passed a law that allows state agencies to avoid the federal rules, and topload the plans as well as avoid limits on the percentage of salary that can be added on as a pension benefit. “It’s a whole different ball game when it comes to government benefits,” said Covel.
      Judge Goldstein in San Diego said the privileged pension was added onto the compensation of the top brass by the old chief justice even as trial courts were closing their doors.
      “While trial courts were closing and we were thinking, `gosh what can we cut,’ while we were closing our doors to the public, these folks wouldn’t give up that benefit.” said Goldsetein. “It’s a joke to say ‘well, it’s in the government code.’ Is it legal? Yes. Is it wrong? Yes. It’s not the right thing to do.”
      In a letter sent to Goldstein last April, AOC general counsel Mary Roberts called the contribution “consistent with the practices of other judicial branch entities including the Supreme Court . . . and the majority of trial courts.”
      Goldstein challenged that statement, saying his court does not pay any of its employees’ expected retirement contributions, and that in fact, San Diego judges are required to contribute eight percent of their monthly paychecks to their retirement.
      According to a memo from Roberts, most rank and file AOC employees are expected to pay five percent into their retirement plans, and the AOC boosts that by 16.4% for some 17.5% for others.
     But the 30 top executives do not pay anything out of their salaries for a benefit that is very generous by any standard, public or private. The taxpayer, through the AOC, contributes 22.5% on top of the court executive’s salary.
     “If it was the right thing to do, they’d offer it to everybody,” Goldstein said. “But that perk is taking money out of the taxpayer’s pocket.”
     For Goldstein, who teaches a class in legal ethics in addition to working as a judge, the right thing to do would be to get rid of the perk altogether.
     “It really is a slap in the face,” he said, “to judges and staff and everybody that’s been taking cuts so that these bureaucrats in San Francisco can get the perk that nobody else gets.”

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