CalPERS data deflates another pension fiction
Public-employee unions are notorious for championing easily debunked myths as they claim that the nation’s growing unfunded pension liabilities are no real problem. It’s hard to justify six-figure, lifetime guaranteed pensions to a public that retires mostly on measly amounts, so unions play fast-and-loose with the numbers.
The biggest whopper, still championed by police and fire unions, is that public-safety officials deserve their lush pensions because they die three to five years after retirement due to the supposed high stress levels and dangers of their jobs. The California Public Employees’ Retirement System (CalPERS) is an advocate for bad pension policies, but it’s got great actuarial tables. As I reported here, the longest-living employees are cops, followed closely by firefighters — most of who live into their mid-80s. CalPERS calls the union claims a myth in a presentation it provides.
The “we die early” argument could have been excused in the past based on shoddy research and ignorance, but there’s no excuse for anyone trotting out such disinformation today given the facts that are out there.
The next-biggest whopper is that the reports about pension abuse are exaggerations based on a few anecdotes because the average pension received by government employees is somewhere in the mid-20s range. I’ve argued repeatedly that such a number is not reliable for a few reasons. First, it includes pensioners who have only been in the system a short time. Second, it includes pensioners who retired years ago under much-less-generous formulas. Third, that number is about triple what the average private-sector pensioner receives, which shows that even this low number actually is relatively high.
The formulas are the formulas, is my bottom-line argument. If a person takes a job as a deputy sheriff in California and works 30 years under the common “3 percent at 50″ formula, that person will retire with 90 percent of final pay, no matter what — and that’s before the myriad pension-spiking gimmicks that sometimes send the amount above the final working pay. This isn’t about anecdotes, but legally binding formulas.
Now, a Sacramento Bee analysis of CalPERS data shows that, once again, unions are inaccurate and pension reformers are on-target. According to the newspaper, average retirement payments doubled for new retirees in the last 13 years (since the passage of pension-hiking legislation) and initial pension payments tripled for many public-safety officials (police, firefighters, prison guards, etc.)
California Highway Patrol officers’ monthly retirement benefits more than doubled to $7,418. That’s close to $89,000 a year on average, with many officers receiving far higher amounts. The average for all state police and firefighters soared to around $60,000 a year and more than $36,000 a year for all retirees. As experts noted, the state aggressively increased pension payments for all categories of public employees and did so retroactively. Those who retire in recent years receive far higher amounts than the averages — and these benefit levels dwarf the outdated poor-mouth numbers union activists use to downplay the payments and the liabilities.
What’s the chance the unions will stop using the low numbers and start dealing with reality? About the same chance they stop peddling the nonsense that police and firefighters die shortly after retirement.