The New York Times article Padded Pensions Add to New York Fiscal Woes has been making the rounds. At least 20 people sent me the link. Let's take a look at few snips, then a look at a followup Times article on addressing the problems.



In Yonkers, more than 100 retired police officers and firefighters are collecting pensions greater than their pay when they were working. One of the youngest, Hugo Tassone, retired at 44 with a base pay of about $74,000 a year. His pension is now $101,333 a year.



It’s what the system promised, said Mr. Tassone, now 47, adding that he did nothing wrong by adding lots of overtime to his base pay shortly before retiring. “I don’t understand how the working guy that held up their end of the bargain became the problem,” he said.



According to pension data collected by The New York Times from the city and state, about 3,700 retired public workers in New York are now getting pensions of more than $100,000 a year, exempt from state and local taxes. The data belie official reports that the average state pension is a modest $18,000, or $38,000 for retired police officers and firefighters. (The average is low, in part, because it includes people who worked in government only part time, or just a few years, as well as surviving spouses getting partial benefits.)



Some will receive the big pensions for decades. Thirteen New York City police officers recently retired at age 40 with pensions above $100,000 a year; nine did so in their 30s.

Legal Theft

Can States Fix Their Pension Problems?

Alicia H. Munnell, Center for Retirement Research

The only real option is to wait for the market and the economy to recover.

Teresa Ghilarducci, New School for Social Research

When I’m 64: The Plot Against Pensions and the Plan to Save Them.

Joshua D. Rauh, Kellogg School of Management

The federal government should cut a deal with states. They should allow a state to issue tax-subsidized bonds for the purpose of pension funding for the next 15 years — if and only if the state government agrees to take three specific measures to stop the growth of unfunded liabilities:



The state must close its defined benefit plans to new employees and agree not to start any new defined benefit plans for at least 30 years.



The state must include its new workers Social Security, and provide them with an adequate defined contribution plan, again for at least 30 years. To this end, the federal government should start a Thrift Savings Program for state workers and operate it alongside the existing Thrift Savings Program for federal workers.



The tax subsidies for these new Pension Security Bonds would work like Build America Bonds, with the federal government paying 35% of all coupon payments directly to the state. The cost of this subsidy will be in large part offset by the gains to the Social Security system of bringing in new state workers. On net, this plan would cost the federal government $75 billion today, and would prevent a trillion dollar crisis in less than a decade.

Cynthia B. Green, ex-Governmental Accounting Standards Board member

The only solution is to end the unaffordable defined-benefit pension plans for public employees once and for all.

The total actuarial cost of these benefits must be funded annually and jurisdictions should be prohibited from ever again celebrating a pension holiday.

Steven Greenhut, author of Plunder! says

California voters are going to have to take matters into their own hands, through the state’s clumsy initiative process.



Courts have ruled that current pension deals are vested benefits that cannot be reduced, but there’s no reason not to fix the problem going forward. No initiative has so far gotten the backing necessary, but that’s only a matter of time. When unions complain about their vilification in a coming battle, they and their political allies will only have themselves to blame for ignoring the words of progressive Democrats like Willie Brown and David Crane.

Plunder!

Liam Dillon, voiceofsandiego.org

Overall, the city hasn’t made fundamental changes to its cost structure, nor has it tried to raise taxes. Instead, change has been incremental, including a heavy dose of one-time budget fixes.



The horizon remains bleak. As it stands, in 15 years the city’s annual pension bill will eclipse $500 million.

Where's the "B" Word?