More on unfunded state government pensions
The first three links are via Glenn Reynolds (Instapundit), who's performing a significant public service in calling attention to the issue.
"Illinois State Pensions Most Underfunded In America".
"Battle brewing over Illinois pensions".
A financial war is brewing -- and it's likely to pit these public employees against Illinois taxpayers who are responsible for paying those generous pension promises.
"San Jose pension costs soar with added benefits".
As San Jose police battle for enhanced retirement benefits they say are crucial to recruitment and retention, a series of earlier sweeteners has helped push the city's pension costs for officers and firefighters up 167 percent since 2000.
That's twice the percent increase in pension costs for the city's civilian workforce. And it far exceeds the federal Consumer Price Index for the Bay Area, which has risen just 23 percent during that time.
Don't let anyone tell you the American dream has faded. the truth is the U.S. is still minting lots of millionaires. Glenn Goss is one of them.
Goss retired four years ago, at 42, from a $90,000 job as a police commander in Delray Beach, Fla. He immediately began drawing a $65,000 annual pension that is guaranteed for life, is indexed to keep up with inflation and comes with full health benefits.
Goss promptly took a new job as police chief in nearby Highland Beach. One big lure: the benefits.
Given that the average man his age will live to 78, Goss is already worth nearly $2 million, based on the present value of his vested retirement benefits. Looked at another way, he is a $2 million liability to Florida taxpayers.
I tell my students, if job security is important to you, with reasonable pay, do what I do: work for the government. UPDATE: John Derbyshire at National Review Online agrees.
I've been trying to explain the problem of defined benefit public pensions to Public Budgeting grad students now for almost a decade. For some reason, the idea of liabilities rising faster (sometimes much faster) than revenues doesn't seem to worry most of them. Of course, most of them work for (or expect to work for) some level of government.
The City of Farmington, MI (I think --going from memory, it may be Farmington Hills) is currently paying *3* retired fire chiefs more in retirement (plus full health care) than it pays its current fire chief in salary. The oldest is around 60 and the youngest is just over 50. Just think. The city can pay 3 former fire chiefs 80K+/yr/chief (indexed) for the next 30-40 years (or more) and receive in return -- well, I suppose the best wishes of the former fire chiefs.
Posted by: JorgXMcKie | February 10, 2009 at 12:05 PM
One solution is to move to new small communities that do not have a huge pension liability.
Posted by: Jake | February 10, 2009 at 03:28 PM
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Posted by: Government Jobs | February 10, 2009 at 10:30 PM