In California, a state worker can retire at age 50, do absolutely nothing all day, and collect 90 percent of their salary for the rest of their lives! 5,000 of these pensions amount to six figures incomes. Nor can the state afford the system it has. As the Matt Welch piece mentions, "the state's annual pension fund contribution vaulted from $321 million in 2000-01 to $7.3 billion last year." That is a rather alarming rate of growth, and an astonishing figure, don't you think? Given that the state is bankrupt and issuing IOUs to its creditors, it doesn't seem unreasonable to complain that public employee unions have extracted benefits that are both obviously unaffordable and far in excess of what is enjoyed by the taxpayers who finance them.
Further earthquake reading: Philip Fradkin
15 hours ago
I'm curious where that number came from, since I tried to source it and wasn't able to. I suppose it is possible that there is some benefit plan somewhere in the CalPers system that allows people to retire at 50 with 90% of their income, but I certainly wasn't able to find it.
ReplyDeleteUnder the more common formula, to draw 90% of your salary in retirement, you would have to retire after the age of 63 with a minimum of 38 years of service.
I don't know what Friedersdorf's source was, but the site where I initially saw a pointer to his article (Andrew Sullivan) has since posted a correction from a state employee that this formula only applies to state safety people - police, etc. Still, there remains the question of how to draw good people into state government without saddling taxpayers with pensions.
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