Sunday, August 8, 2010
It's Time for Public Pension Reform
The photo above is of CalPERS' list of Top 10 pensioners. Between $200K-$500K a year for life? Good for them, but not for the taxpayer. (Click here for California Pension Reform's searchable database.)
Daniel Borenstein at the Contra Costa Times has been doing a bang-up job of reporting on how out of control our public pensions are in California (see link below). Not only is the system itself outdated and flawed, but the tactics used by some public employees -- with the support of their bosses -- to "spike" their pensions just prior to retirement border on criminal behavior, as far as I'm concerned.
Those of us in the private sector have to rely on our self-funded 401(k) plans for our retirements. Why are we providing full pay (or more) -- for life! -- to retirees who are in their early 50s? The outrageousness of this problem is exacerbated by recent surveys that show that public workers are also better paid and have dramatically better benefits than private sector workers in similar positions. In other words, they should be more capable of providing for their own retirements than the typical private sector employee. To add insult to injury, not only do many public workers have generous pensions, but they also have the equivalent of 401(k) plans (403(b) plans, etc.) with generous employer matching. How much is enough? Especially in light of the outrageous abuses that have been exposed in the Bell, California scandal, one has to wonder why no one is responsible for monitoring the fairness of these compensation schemes. It's time for serious public pension reform.
Click here for a good article by Borenstein.