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Study: Public Workers Have Better Benefits Than Private Employees

SACRAMENTO (AP) — California's state and local government workers make salaries similar to those at large private-sector employers but get significantly higher retirement benefits, and teachers make far less after retirement than other public employees, a study issued Thursday concluded.

The conclusions were part of a report by consultants hired by the California Foundation for Fiscal Responsibility, a nonprofit involved in research on pension reform. The group shares roots and some advisers with an organization preparing a statewide ballot initiative that seeks to force changes in government pensions.

The study found taxpayers spend roughly three times what large private employers spend per employee for pensions and retiree health benefits. The gap is far smaller for teachers, and costs are lower for public workers who do not spend their entire career in government.

Public pensions have been the subject of hot debate across the nation, with critics arguing that they provide richer benefits, guaranteed by taxpayers, than other workers get. Although pension funds have gained back some of the deep losses they suffered during the recession, they remain underfunded by billions of dollars, and projections show costs to governments increasing in the future.

Capitol Matrix Consulting looked at retirement benefits based on their current value for both the public systems and several large private employers, assembling data that could be used to compare very different sets of benefits, said Michael Genest, a former state finance director and now a principal with the consulting firm.

"There's no question that there's a funding problem," Genest said, and the new study provides hard data that can inform the debate on how to solve pension problems.

Worker groups have long argued that richer retirement benefits for government workers offset lower salaries, and public-employee unions and the state's largest pension fund quickly raised questions about the study.

The state's largest pension fund, the California Public Employees' Retirement System, was not allowed to review the report before it was issued, said chief executive officer Anne Staussboll, and "what we have seen reported raises significant policy and legal questions."

The consultants said they did not review the legal issues involved in changing pension benefits for workers already in the system, as proposed this year in a report by California's Little Hoover Commission.

(© Copyright 2011 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten or redistributed.)

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