Unsustainable Government Pensions
Susan Edelman writes in the New York Post of a retired CUNY professor who gets a New York CIty pension of $561,286 a year:
Retired Queens College history professor Edgar J. McManus, 90, gets a city pension of $561,286 a year, newly released figures show.His payout is the highest by far in both the city and state teachers retirement systems, according to data obtained by the Empire Center for Public Policy, an Albany-based think tank.
The city Teachers Retirement System, or TRS, administers pensions for 80,300 members, mostly former employees of the Department of Education and some from CUNY.
The city's second-biggest pension, $308,358, goes to Alvin Marty, a Baruch College economics professor who retired after 55 years in 2008.
Fifteen other retirees collect more than $200,000 a year -- including city Schools Chancellor Carmen Fariña, who gets $208,506.
And 1,796 retired educators get more than $100,000 a year.
...McManus, who has written groundbreaking books on slavery, retired in February 2012 after teaching history and constitutional law for more than 50 years. His final salary was $116,364.
Check out how crazy it is in California.
Many states and municipalities are in the same bind.
Solutions, anyone?
I'd like to know how someone can retire and collect 5x their working salary. That's got to be about the stupidest thing I've ever heard.
BunnyGirl at October 6, 2014 11:59 PM
Let's take the case of Prof. Marty. Working from the data given, he taught for 55 years. About the earliest he could have started teaching would have been age 25. So he retired around the age of 80.
His life expectancy is probably 10 years or so. He has 55 years of pension investments to his name. Of course he has a high pension!
If people want to drive outrage, they need to actually find cases that are outrageous. This isn't one of them...
a_random_guy at October 7, 2014 12:18 AM
Solutions?
"Last day. Capricorn 15's. Year of the city - 2274. Carousel begins."
lujlp at October 7, 2014 12:33 AM
That's not including any savings, IRAs, investments, or other resources these former government employees may have.
I shoulda gone into government work.
Conan the Grammarian at October 7, 2014 8:10 AM
"So he retired around the age of 80."
The average public employee in California retires at age 60. Firefighters and correction officers can retire at 55. They'll get less if they retire earlier, but still.
The mid-sized city in NorCal where I grew up, nearly half the annual budget goes toward pension obligations and the obligations are growing yearly. It seems pretty unsustainable.
Jason S. at October 7, 2014 8:30 AM
And so we return to an argument started here six years ago: if the public doesn't pay any attention to the behavior of the agency administering pensions, then they set themselves up to send their tax money to people who do not work.
If investors and stockholders do not pay attention to the agent administering pensions for the company, then company profits will be sapped to pay people who do no work.
I get that the employee was valuable, and that the pension was offered as incentive, but if you don't watch where your money is GOING to go, then don't be surprised when it is not there when you arrive.
BTW, Flint, Michigan can't put cops on the street, but the retired cops are fully funded. There you go, Flint.
Now - here's an angle that hasn't been covered: pension plans are supposed to be invested, so that the payout is drawn from a fund other than profits or taxes. Just saying this guy above gets a lot isn't the whole story.
Radwaste at October 7, 2014 8:58 AM
That's how Social Security was supposed to work.
Then Congress (and the President) discovered they could pool that money with tax money and spend even more. Until one day there were more beneficiaries than taxpayers.
Conan the Grammarian at October 7, 2014 9:28 AM
...pension plans are supposed to be invested, so that the payout is drawn from a fund other than profits or taxes. ~ Posted by: Radwaste at October 7, 2014 8:58 AM
That's how Social Security was supposed to work.
Then Congress (and the President) discovered they could pool that money with tax money and spend even more. Until one day there were more beneficiaries than taxpayers.
Posted by: Conan the Grammarian at October 7, 2014 9:28 AM
It is a Ponzi scheme. And most of them are about ready to go bust.
This is what took GM down. They were locked into union contracts for absurdly high benefits, and gold plated health coverage.
Two solutions that will fix this. Bankruptcy, or rampant inflation.
I am betting on a combination of the two. It has already started. I fear the next ten to 15 years will be pretty rocky.
Isab at October 7, 2014 9:36 AM
Just as a side note. I have a friend that retired from Calpers in 2012.
She worked for the sheriffs department, I believe in San Bernadino for 23 years.
Only half of that was as a line officer. Other half was desk jobs.
Her pension from Calpers? 106k a year.
This is roughly triple what my husband will get with 35 years of service as a federal engineer with a P.E.
Not complaining, just stating a fact. I don't think she has any idea where this money comes from, or how fragile the system is.
We are going the way of Greece folks, just give it ten more years.
Isab at October 7, 2014 11:37 AM
"Just saying this guy above gets a lot isn't the whole story."
Well, yeah, true. But it's a big part.
Calif's teachers pension is the biggest in the nation, and they figured that an average %7.5 return on investments, and contributions from members, would cover retirement and benefit packages.
They've been getting good returns on investment, but they still run billions of dollars in the red. Partly because members, school districts and the state haven't contributed and also...and mainly, because the retirement and benefit packages are unsustainable over so many years. At least that's what's happening in CA, according to reports.
Jason S. at October 7, 2014 12:17 PM
Lots of underfunded pensions out there.
Solution: Death Panels!
doombuggy at October 7, 2014 1:02 PM
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