…As I document in my new book, Plunder!, government employees of all stripes have manipulated the system to spike their pensions. Because California bases pensions for employees on their final year’s salary, some workers move to other jurisdictions for just that final year to increase their pay and thus the pension. Even government employees convicted of on-the-job crimes continue to collect benefits. Municipalities have adopted Defined Retirement Option Plans, or DROPs, in which the employee earns his salary and his full defined-benefit retirement pay at the same time, with the retirement pay going into an account payable upon actual retirement. And as average Americans work longer to sustain themselves, public employees can retire in their early fifties with their plush benefits…
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Correct me if I’m wrong, but I believe some retirement systems in CA are now averaging the top 3 years of pay to calculate a retirement benefit.
Back in the spring, SD’s City Council was considering modifications to its DROP program.
…A lengthy court fight led to rulings that gave city leaders the power to make sweeping changes to DROP, but a judge has yet to rule on whether the city can eliminate the program altogether. . . . “It’s not a bad thing to keep experienced people, but what we’ve done is we set it up so that it’s more lucrative to be in DROP than it is to be an employee because you don’t have to contribute to the pension system,” Goldsmith said. “That’s where we went wrong.”…
I don’t agree with soon-to-retire employees being able to use “pension-spiking tactics” to increase their pensions. Nor do I agree with employees being able to “purchase” periods of broken service (where they were not on the payroll for whatever reason) so as to have “continuous service” or to help them vest.
The only public employees that I know of that can retire “in their early fifties with their plush benefit” are sworn staff (aka law enforcement and firefighters). All “general retirees” will not be able to get their full benefit until age 62. If they decide they want to collect their benefit earlier than that, it will be a partial benefit for life, calculated in part upon their age at the time they decide to begin to collect it. This would make sense if the “deferred retiree” was terminally ill or otherwise unable to eek out any kind of a living. Otherwise, why take a partial benefit early??
All this “plundering talk” is obviously coming from half-cocked ignoramuses.
