The pension system for government workers is out of control all across America. Public employees retire on average earlier than private workers and have pensions (remember those?) that pay out at levels the taxpayers can’t sustain. These pensions are for people who for the most part can never be fired and who on average make more than private sector workers doing similar work. Yet as the economic tide goes out and as things become ever tighter, these workers insist that they must be paid by the taxpayers at exorbitant levels–for the rest of their lives.
I am sure there are exceptions to this. I am sure that many public employees have very reasonable retirement plans in many parts of America. But I live outside of DC, where “reasonable” is a dirty word. Government workers want what’s coming to them, damn the taxpayer or the broader economy.
In the attached essay Ed Ring examines the only place in America which may have more entitled government employees than Washington DC, California. These folks are bankrupting cities to make sure they get paid.
Ring points out that the rate of return needed to keep these pension schemes alive is far higher than one can reasonably expect. Pension managers are increasingly taking on more and more risk as they search for higher returns. This is a recipe for disaster, but the government unions figure they’ll be bailed out anyway if things go south.
One way or another you will pay for their comfortable retirement.
The average pension for a public servant who has worked 30 years or more in public service is more than four times what the average social security benefit is for someone who has worked 40 years or more in the private sector. To citeexamples – the average CalPERS retiree who retired in the last five years, after 30 years service, collects a pension of $67,980, for CalSTRS, the average for recent retirees with 30+ years of service is $66,828 per year. Most of California’s independent city and county pension funds are even more generous; Orange County’s employee retirement system, for example, pays the average recent retiree with 30+ years of service a pension of $81,000.
These numbers are ridiculously out of step with reality. If every Californian over the age of 55 got a pension that averaged $65,000 per year, it would cost over $650 billion per year, one-third of California’s entire GDP.