A new audit finds "pension spiking" continues in California. It's still legal in some cases, and the audit says it will add hundreds of millions of dollars more debt to a system already overburdened with it.
State Controller John Chiang says 3,100 public agencies contract with the California Public Employees' Retirement System and dozens have engaged in "legal" pension spiking using a variety of techniques to increase pensions beyond what they should be.
The audit suggests that practice will cost the state almost $800 million over 20 years.
The audit says the state doesn't have the money to pay.
CalPERS says the practice had been authorized under the law, but the law has been changed and "spiking" is now banned for newly hired workers. Auditors says they found no evidence of illegal spiking, but that CalPERS has failed to used automated controls and to "proactively" review payroll data.
It also found CalPERS lacks the capacity to cover all the agencies with which it contracts. On the current review schedule, the controller found a local government that contracts with CalPERS would face an audit once in 66 years.
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