The cost of spiking
Taxpayers and local governments are on the hook to pay nearly $800 million stemming from “legal” pension spiking over the next two decades, the state controller in California said.
An audit of 11 state and local government agencies found no illegal pension spiking but concluded that CALPERS, the country’s largest public retirement fund makes itself vulnerable to the practice by not aggressively reviewing its 3,100 member agencies’ payroll records. Chiang said he especially was concerned by the practice at 97 local agencies of fattening a worker’s final year’s pay when the collective bargaining agreement calls for the agency to pay both the employer’s and the employee’s share of the total pension contribution.
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