CalPERS and PEPRA Retirement Plans are Sinking the Ship
- Elisa Ballard
- 2 days ago
- 5 min read
OPINION
Update:
In response to questions we received about our article, we are publishing additional information. A reader suggested that the majority of county workers are paid only the minimum wage of $17/hour and that they accept this meager wage only because of the benefits. While it is true that many do only get paid minimum wage, the data show that the vast majority of county workers are paid far more. Here is that data:
Shasta County Public Employees (2024 data)
Employee Class | Estimated # of Employees | % of Total (~1,913) | Estimated Avg Regular/Base Pay (excl. benefits) | Notes / Key Examples |
Senior Leadership (Dept Heads, CEO, Elected Officials like Sheriff/DA) | ~20–35 | ~1–2% | $170,000 – $220,000+ | CEO ~$279k, Sheriff ~$222k, HHSA Director ~$205k, other directors $170k–$210k. |
Public Safety (Deputies, Correctional Officers, Probation, Sergeants/Lieutenants) | ~550–650 | ~29–34% | $85,000 – $95,000 | Includes sworn roles with high overtime potential. (see note below) |
Administrative (Managers, Analysts, IT, Mid-level Supervisors) | ~230–320 | ~12–17% | $100,000 – $125,000 | Mix of professional and support management roles. |
Public Health and Welfare (HHSA: Social Workers, Nurses, Eligibility, Mental Health) | ~450–550 | ~24–29% | $75,000 – $90,000 | Largest department group with varied clinical/program roles. |
Clerical / Non-skilled Labor (Clerks, Office Assistants, Maintenance, Records, Custodial) | ~400–500 | ~21–26% | $45,000 – $60,000 | Entry to mid-level support and labor roles. |
Key Notes
Total Employees: 1,913 (CA State Controller GCC 2024). Transparent California shows 1,823 detailed records.
Why broad ranges? Each class group has many job titles with different pay steps, experience levels, and specialties. These are logical category estimates, not single uniform job averages.
Pay Basis: Regular/base pay only (excludes overtime & benefits). Public Safety often receives substantial overtime — many deputies and sworn staff average $30,000 – $50,000+ in annual OT (with some exceeding $60k), significantly boosting total wages.
Data Sources: Transparent California 2024 + CA State Controller. Budget-authorized FTEs are slightly higher due to vacancies.
Figures are for Shasta County government employees only (excludes cities, schools, special districts).
Original Article
Retirement plans differ sharply between the private sector and California public employment. Most private-sector workers rely on defined contribution plans like the 401(k), while Shasta County and other California public employees participate in CalPERS, a traditional defined benefit pension plan. The Public Employees’ Pension Reform Act (PEPRA) of 2013, promoted by and signed into law by Governor Jerry Brown, introduced reforms for newer hires, but the system remains unsustainable due to longer lifespans, investment volatility, and mounting costs that divert funds from public services.
Private Sector: The 401(k) Model
In the private sector, employees and employers contribute to individual 401(k) accounts. Employees bear the investment risk.
Average employer contribution: Approximately 4.6% to 4.8% of salary (Vanguard and Fidelity data, 2024–2025). A common structure is a 100% match on the first 3% of salary plus 50% on the next 2%.
No guaranteed lifetime income. Balances fluctuate with markets.
Plans are portable when changing jobs.
This model keeps employer costs predictable and relatively low.
California Public Pensions: CalPERS and PEPRA
CalPERS promises a fixed monthly pension for life based on a formula (years of service × benefit factor × final compensation). Shasta County participates in CalPERS and PEPRA for its employees.
Key features:
Classic members (pre-2013): More generous formulas, e.g., 2%–3% at younger retirement ages for safety employees.
PEPRA members (hired on/after Jan. 1, 2013): Reduced benefits, such as 2% at age 62 for miscellaneous employees, higher retirement ages, higher employee contributions, and compensation caps. Classic Members are capped at $360,000 and PEPRA Members are capped at $191,679 as to the amount of the employee's salary that can count toward their final compensation and pension calculation.
Employer contribution rates in Shasta County (and similar counties) are massively higher than private-sector matches. Recent figures for many California counties show employer contribution rates around 29% for miscellaneous employees and up to 62% for safety employees (police, firefighters), including normal costs and payments toward unfunded liabilities. These rates far exceed the private-sector average of ~4.7%.
The average CalPERS pension statewide is about $45,000+ per year, varying by role and service. Many Shasta County employees (especially miscellaneous) also receive Social Security, creating a dual-benefit structure.
The Sustainability Challenge – Local Impact in Shasta County
Even with PEPRA reforms, the system faces structural pressures:
Longevity Risk: Retirees living 25–30+ years after retirement dramatically increases total payouts.
Investment Volatility: CalPERS assumes ~6.8% annual returns. Market downturns create unfunded liabilities that taxpayers must cover through higher contributions. Shasta County, like other agencies, faces volatile “catch-up” payments. "The most significant uncertainty in future budgets will be the impact of decisions made by the CalPERS board of directors." - a quote from Shasta County CEO David Rickert in this year's Shasta County Budget Proposal.
Budget Strain: High contribution rates (often 20–60%+ of payroll depending on the employee group) consume a growing share of county budgets. In Shasta County’s recent budget proposed for the 2026/2027 fiscal year, pension contributions are $48.6 million, pension and retiree obligations represent a substantial and rising portion of expenditures, crowding out funding for roads, public safety, health services, and other priorities.
Legacy Costs: PEPRA only applies to newer hires. Costs from older, more generous plans continue to burden taxpayers.
Key Trade-offs
Aspect | Private Sector 401(k) | Shasta County / CalPERS Pension |
Guarantee | No lifetime guarantee | Lifetime monthly payment |
Risk | Employee | Primarily taxpayers |
Employer Cost | ~4.6–4.8% of salary | Often 28%+ (misc) to 62%+ (safety) |
Portability | High | Low |
Predictability | Market-dependent | High for retiree, volatile for county |
Sustainability | Individual | Strains county budgets & services |
Conclusion
Shasta County’s CalPERS and PEPRA obligations — with employer contribution rates reaching 28% for miscellaneous employees and over 60% for safety positions — create persistent fiscal pressure that benefits public employees at the expense of taxpayers. On top of the generous pension plan, County employees receive optional 401(a) and 457(b) deferred compensation plans with County matching funds and a host of other benefits. Compounded by longer lifespans and market volatility, these rising pension costs continue to divert resources from essential public services. The growing burden on county budgets raises serious questions about long-term affordability. Meaningful reforms are needed to better balance employee benefits with fiscal responsibility for Shasta County and California taxpayers.
If it were possible to switch the County’s retirement obligations from defined-benefit plans to 401(k)-style accounts with a 5% employer contribution, this would reduce annual pension costs from $48.6 million to roughly $7.3 million. In just a few years, those savings would be enough to build a new jail or provide critically needed road repairs and more law enforcement. Unfortunately, the current obligations cannot realistically be cut. Instead, more needs to be done to reduce benefits for new hires, either through stronger reforms to PEPRA or by eliminating defined benefit plans altogether. The era of defined benefits needs to end sooner rather than later, or the ship will sink, leaving our children and grandchildren without the services they need and facing higher tax burdens. There is only one candidate for the Shasta County Board of Supervisors, Richard Gallardo, who is even talking about the pension burden. He is running for District 1 against incumbent Kevin Crye and Redding City Council Member Erin Resner. This is not an endorsement of any candidate, simply an important observation.
The largest obstacle preventing the legislature from changing a defined-contribution 401(k)- style retirement plan is the powerful public employee unions. It would be impossible to reduce any benefits from existing employees. PERPA is the only time the legislature has been able to implement a different retirement plan for new employees. I
Voters should understand the consequences of continuing to provide extremely generous pension plans to governmental employees. Remember that a public employee's salary is only about half the real cost to taxpayers. The other half comes from pensions, healthcare, and other benefits - especially the growing CalPERS burden. Someone working for the County who receives a $70,000 yearly salary is costing the County $140,000 per year in salary and benefits. This is the average cost per employee in Shasta County, with 2046 full-time-equivalent employees proposed for the upcoming fiscal year's budget and an employee salary and benefits budget of almost $286 million.
To see the proposed Shasta County Budget, go to:
To see the Shasta County employee benefits, go to:
