An illustration of what is wrong with government pensions
As a disclaimer, let me say that I have 14 years credit in CalPERS, the California public employee pension system. My hope is that before I retire in 20 years or so I’ll pick up a few more years at a public agency so that I can receive a bigger pension. That being said, something is wrong with the picture painted by this post from theNewEditor.com. Thanks to my buddy Josh for sending me this story.
Back in 2008, the Daily Bail’s Bill Zettler listed what can only be described as an eye-popping list of the top 100 pensions due to school administrators in the state of Illinois.
The total estimated cost of these pensions is almost $1 billion — at $887,925,790 — for 100 people! That’s nearly $9M per person.
Nearly a billion dollars of pension liability for only 100 employees is mind boggling. My first reaction was simply, “Wow!” I’m certain a similar list for California and for other types of government employees would produce similar results. I don’t believe this is only a Illinois school administrator issue.
My own belief is that in years past, government employees accepted lower than market rate salaries in exchange for better retirement programs. Over the last 20 or 30 years both their annual compensation and retirement benefits have continued to grow to the point where they far outweigh those available to the average corporate worker. I’m glad to see that the Governor was able to renegotiate some changes in the retirement system for new State employees with four of the unions representing state employees. It will require employees to pay a larger share and base retirement on that highest three years instead of their highest year.
I think this problem, like many others related to government spending comes from a widespread attitude that taxpayer money “belongs to the agency” or that there is a never ending supply. I think many government workers don’t take seriously their responsibility to be good stewards of public resources.
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