12:00 am
April 8, 2013
Yesterday AP reporter Mike Baker exposed abuses in a now-closed pension program for police and firefighters. The program makes it possible for some people to pump their pension by taking late pay raises. As Baker reports, it’s not an isolated situation. And it significantly increases state pension costs.
• Even while state and local budget cuts imposed salary reductions over the past five years, the average first responder retiring into the so-called LEOFF-1 pension system had a pay rate in their final three months of work that was 5.5 percent higher than the same period a year earlier. The increase was much larger than workers received in any other pension system in the state and more than double the average raise for all workers who departed over that time period, the AP found.
• Local officials seeking to cut their budgets approved late pay increases to encourage workers to retire. Those alterations shifted local costs to the state, saddling the taxpayer-funded pension system with millions of dollars in liabilities.
It’s solid reporting. As is Baker’s story today on retiree health care costs.
Seattle Times editorial writer Lynne Varner reviews the situation and notes:
While this story is specifically about the high cost of medical benefits and the ways local municipalities are struggling to pay the costs, a closely related issue is that the unsustainable overall expense of public pensions. Despite the attention of Congress and state Legislatures these issues are not close to being resolved.
In a Seattle Times editorial about pensions,
The Times Opinion page has argued for replacing public pensions with defined-contribution plans, noting that defined-benefit retirement plans require heavy bailouts when the economy tanks or too many retirees dip from the same pot.
We’ve said much the same thing.
Categories: Budget , Categories , Current Affairs.