Public Pension Stupidity

November/29/2010 16:16PM
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The Chicago Tribune ran an article showing all the cities in the Metropolitan area with shortfalls in minimum pension coverage. The City of Chicago is in the same boat. The country is in the same shape. Not only with employee pensions, but social security as well.

How does a pension plan get out of control? I attained a list of the top 100 government pensions payouts in the state of Illinois. The top pension is $402,418 annually or $33,535 a month for one Tapas K Das Gupta, from the state university system. The lowest is Peter Krupczak, $186,571, again, the state university system. Fifty six are from the state university system and thirty two from the teachers retirement system. Is it any wonder the schools are broke and tuition keeps going up in universities faster than any other aspect of the economy, including health care?

In the private sector most retirement plans are based on the highest five years average of the last ten worked. Most have some kind of points plus age to qualify. Many use 80 plus points. For example, you must have worked 30 years and be 50 years old to quality.

The cities in trouble according to the Tribune have a twenty year qualifier. And, get this, your pension pay is based on the last day you worked. To get marginal employees to retire, they are often given a big raise for a month and that jumps their retirement pay by a like percentage. And, since most pay the pension to the spouse if the employee dies, it’s like a second to die life insurance policy. But, giving an employee a big raise for one month doesn’t hit the budget hard, it just piles it on down the road, it’s immediate action to get someone a good deal and delayed pain.

Why should be be shocked to find this part of government is out of control at every level? We get what we pay for. We elect career politicians at all those levels. Most are too incompetent to hold a real job. Then, we let them go without checks and balances. Everything they touch is a problem. Build something, it’s over budget and late. Run something and it loses money.

We got a clue years ago when the Orange County pension program caused the county to file bankruptcy. We didn’t pay attention. Then we saw the city in California paying everyone a million a year.

Most of these public employees are union. The unions get the politicians elected. What do you expect?

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