The Public Pension System

by: Sharon GR

Wed Mar 01, 2006 at 11:26:39 AM EST

Tom Moran of the Star-Ledger has a commentary this morning on the pension system for public employees. He cites abuses and legal tricks, such as:

Edison Police Chief Edward Costello is one lucky guy. On his final day in office, he negotiated a whopping pay hike that boosted his pension to $115,000 a year. That's on top of the $62,000 he got for unused vacation and sick time.
...
In Newark a few months ago, the deputy police director retired to take a pension, then was rehired to do the same job as a consultant, for a combined income of $221,000. It was apparently legal, but so embarrassing that the plan was scratched.
...
South Orange allowed 11 police officers to boost their pensions by counting unused vacation time as salary. Bradley Beach gave several top officials big raises in their final year, and counted sick and vacation time as salary.

Wow.

Sharon GR :: The Public Pension System

Now, do I blame guys like Chief Costello? Not really. He made his pension contibutions for decades, and served with honor. Apparently, he hadn't gotten a pay raise in three years, so his last-minute raise was to make ammends for that. He played the system and came out on top. (Is it the 'right' thing to do? Not really. Would you do the same in that position? Damn right.) The blame falls squarely on a system that allows these tricks. The benefits plans are excedingly, embarrasingly, ridiculously generous and must be changed.

Remember in the private sector, you couldn't get away with this. I know people in the private sector who went five years between raises; instead of being angry, they feel lucky to simply have their jobs, since their co-workers have been laid off. Many folks who work in the private sector have no chance at a pension; they get a 401K (if they're lucky) and a "good luck to ya."

Politicians always talk about cutting waste and fraud. Some of this is fraud, but even with what's legal there's a lot of waste. Our public employees deserve a fair shake and decent pay, but this goes way beyond that. I hope Governor Corzine will make good on those promises, and propose a plan soon to cut the fraud and waste here. Moran states, "unless these benefits are somehow reined in, at least for new employees, you can expect a taxpayer revolt at some point." I sure hope so.

(cross-posted at CoNJL)

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The Public Pension System | 2 comments

Let's not race to the bottom (0.00 / 0)

Of course these types of loopholes/abuses need to be remedied - that's common sense, and good policy.

But I cringe when I (so often) hear what sounds like hostility toward public sector employees compared to "those who work in the private sector [who] have no chance at a pension; they get a 401K (if they're lucky)" - as though people with pensions are bad. And as though the private sector is the model we should be following.

Hey, pensions are good for society - heck, they're great. The government deserves kudos for holding up their end of the social compact made with their employees. The hostility should be reserved for the private sector that have treated pensions as slush funds when they haven't gotten rid of them altogether.

by: Jeff Gardner @ Wed Mar 01, 2006 at 20:42:05 PM UTC

There's no hostility (0.00 / 0)

...here, anyway, toward public sector employees. Don't try to read between the lines to find any- it ain't there. I'm sorry to hear that you so often hear hostility toward public employees, such as police officers who may have to give their all in the line of duty. People with pensions are not bad, absolutely not. I specifically said I don't blame folks like the esteemed police chief, a war veteran with many years being on the blue line. "The blame falls squarely on a system that allows these tricks," tricks such as unused vacation time being counted as salary for pension reasons and an employee "retiring" and taking pension only to consult at their old job at a similar salary.

The private sector certainly doesn't always get it right either. Just look into GM's pension woes to see an example of that.

A pension based on salary is deserved, fair and reasonable; a pension based on 11th hour raises and accounting tricks with built-up sick time is not, and the taxpayers of Our Fair State shouldn't be footing the bill for it.

-Sharon GR

by: Sharon GR @ Thu Mar 02, 2006 at 01:02:24 AM UTC

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