How Public Pensions Make People Well-Off at Taxpayers’ Expense
Here is another editorial entitled Government pensions fund second careers about the outrageous problems with public sector pensions:
Manchester Town Manager Steven R. Werbner has applied to become Tolland’s (Conn.) town manager, and he’d probably be a fool not to take the job if it is offered, because if he goes to Tolland, Manchester will make him rich.
Having worked in various town-government positions in Manchester for almost 30 years, Werbner is now entitled to collect an annual pension of about $90,000 a year, even though he is only 52. While the salary Tolland is advertising for its manager’s job — $88,000 to $114,000 — would be as much as $40,000 less than the $129,000 Werbner earns in Manchester, that $90,000 annual pension payment from Manchester would cover at least twice any reduction in Werbner’s total income if he took the job in Tolland.
Given his experience, Tolland probably will offer Werbner something closer to $114,000, so if he accepts the job he probably will end up with annual income of more than $200,000 a year.
If he holds the Tolland job for 10 years or so until he reaches the age at which most people stop working, Manchester will have paid him about a million dollars, not really as retirement compensation but instead as a bonus for working elsewhere.
Werbner’s situation is no fluke…
Indeed, retirements that are really the start of second careers underwritten by generous pension benefits are common in public employment in Connecticut. The rationale for extravagant pension benefits is that they are necessary to attract and keep good people in government. But increasingly these extravagant pension benefits are causing people to leave, not to stay.
The public that pays for making Connecticut a public employee paradise may think that “pension” or “retirement” benefits are meant to support people when they are no longer working, not to give government administrators more compensation than the governor. The public also may think that times are hard in government in Connecticut and that this or that service must be curtailed because public needs are becoming overwhelming even as tax support of those needs is drying up.
In fact government in Connecticut is always rolling in money even as elected officials lack the political courage to confront the primary beneficiaries of that money, the government’s own employees, whose unions are the most politically influential special interests…
…Government-pension benefits should support people who are no longer working, not subsidize people in beginning second careers. State law and municipal ordinance alike should prohibit payment of such benefits to any public employee before a traditional retirement age, such as 62 or 65, or before his or her incurring a disability that prevents him from working, or at least should reduce benefits in proportion to income a beneficiary continues to earn by working…
…should make it an issue in this year’s municipal-election campaign. Connecticut should want its veteran public employees to be able to retire comfortably. Connecticut should not want them to collect luxurious retirement benefits when they are still working and getting paid so much better than ordinary taxpayers.
Making public sector employees well-off, another benefit brought to us by the public sector unions and paid for by the rest of us – the working families and retirees across America.
It is important to remember that the public sector unions oppose any reforms to these rich pension benefits.
Now ask yourself again who represents working people and retirees in Rhode Island and across America?
Bankrupt pensions, extraordinary healthcare insurance benefits, related issues with private and public sector unions, and the misguided incentives that exist in public sector taxation have been discussed previously on Anchor Rising:
Misguided Incentives Drive Public Sector Taxation
If You Won’t Deal With Economic Reality, Then It Will Deal With You
Underfunding Pensions, Public and Private, can Hurt Taxpayers
Bankrupt Public Pensions: A Time Bomb That Will Explode
Why Truly Free Markets & Timely, Transparent Information Are Needed to Protect the Freedom of American Citizens
RI Public Pension Problems
The Cocoon in which Entitled State Employees Live
The Union’s Solution for the Future: Get More People in Unions
Bankrupt Public Pensions, Part II
Outrageous Employee Compensation Liabilities Continue to Haunt General Motors; Will American Taxpayers End Up Paying the Bill?
Why the Big Three Auto Companies Could Easily Fail