California's public pension system is facing a growing crisis, with the number of retirees collecting six-figure annual pensions more than doubling in recent years. In 2025, more than 63,000 former public servants received at least $100,000 from the California Public Employees’ Retirement System (CalPERS), the nation's largest public pension fund. This surge in high payouts is contributing to an estimated $153 billion pension shortfall.
These substantial pension benefits, which have become increasingly common, are straining local government budgets. Santa Barbara County Supervisor Bob Nelson noted last year that rising pension payments have forced his county to allocate an extra $100 million annually, leading to reductions in public safety staffing and resources for mental health and homelessness initiatives.
The number of retirees earning over $100,000 annually has dramatically increased. In 2018, over 26,000 retirees were in this category, a significant jump from just 1,841 in 2005. Experts attribute this trend, in part, to a 1999 law signed by then-Gov. Gray Davis, which substantially increased public pension benefits for state employees. Davis later expressed regret for signing the law, referencing it as "SB 400."
CalPERS is a defined benefit pension system funded by employee contributions, investment returns, and employer contributions, ultimately funded by taxpayer dollars. Zachary Christensen, leader of the Pension Integrity Project at the Reason Foundation, stated that the system is $153 billion short of the assets needed to cover promised benefits.
While the average annual pension benefit is approximately $44,209, a growing number of retirees are receiving significantly more. In 2023, 21 individuals collected pensions exceeding $300,000. By 2025, this number had risen to 36.
Among the highest earners is Curtis Ishii, a former managing investment director for fixed income at CalPERS, who received $462,784 last year. His pension is calculated based on his final salary, which was $688,000 in 2017. Michael D. Johnson, a former Solano County administrator, received $426,028, and Steve Maguin, former chief engineer and general manager of Los Angeles County Sanitation Districts, collected $418,614 before his passing earlier this year.
Other notable recipients include Joaquin Fuster, a UCLA professor ($385,479.57), Leroy J. Jackson, former city manager of Torrance ($369,485.19), James F. Stahl, former chief engineer at LA County Sanitation Districts ($366,629.46), Susan A. Cummings, a physician for Santa Clara County ($365,165.55), John Di Stasio, former CEO of the Sacramento Municipal Utility District ($357,647.19), and Artie Fields, city manager of Inglewood ($357,125.10).
Some recipients continue to work in non-government roles. For example, John Di Stasio is listed as the president of the Large Public Power Council.
A 2013 law enacted by California lawmakers now ties public pensions to IRS limits, which may affect future payouts. However, many current retirees have pensions established under the prior, more generous rules. CalPERS' total payout has increased, from $29.1 billion in 2021-22 to an estimated $34.6 billion for 2024-25, alongside a growing number of pension recipients.
Despite challenges, CalPERS experienced a strong year in investment returns. Experts suggest that the increasing number of high pensions may be due to longer careers in public service and higher salaries, which form the basis of pension calculations. Christensen specifically cited the 1999 decision to increase benefits, which was made when the stock market was performing well, as a key factor contributing to the current deficit.
This expansion of benefits in 1999 allowed public sector employees to retire earlier and receive more lucrative calculations, which were made retroactive. However, subsequent economic downturns and investment losses significantly increased the annual contributions required for CalPERS, from $1.6 billion in 1999 to an estimated $26.7 billion in the current fiscal year.
Even as reforms have been implemented, union advocacy for higher pension benefits continues. Governor Gavin Newsom recently vetoed a bill that would have expanded pension benefits for police officers and firefighters, citing the need to avoid repeating past pension crises.
Christensen noted that the impact of the 2013 reforms will not be fully realized for about a decade, as workers hired after these changes begin to retire. Unions, a significant political force in California, are expected to continue advocating for increased pension payouts.