PENSION RIP-OFFS

City, county and state government pensions are one of the less publicized rip-offs of the American taxpayer.

Newspapers throughout the nation sporadically print back page stories about government employees who retire after 20 years with full benefits and pensions (generally east coast states). These same people then go to work for another municipality and after 3 to 5 more years they collect another full pension, resulting in taxpayer’s footing the bill for billions of additional pension dollars. On top of that, these same governments are not funding the pensions while handing out huge increases in long-term retirement benefits; instead, they are stealing the money to cover their bloated budgets. This process is a national disgrace with horrendous implications on the economy regardless of your views on government’s place in society. The problem not only exists with city, county and state pensions, its ugly head has also reared in the private sector as well. Someday, someone is going to have to cough up an enormous amount of money to even out the books, and it won’t be the current politicians who face up to this fiscal banditry – they’ll be long gone.

But how does this work? How do the politicians ignore their fiscal responsibility by playing dangerous and fraudulent games with pension monies? We’ll explain it in terms that you most likely can readily identify with.

The Mechanics of Pension Rip-Offs

Let’s say you work for the XYZ Manufacturing Company and every month they withhold $50.00 for deposit in your 401(k) fund. That money is supposed to automatically be deposited in some vehicle such as a bank account or into a mutual fund. If the owner is faced with a lousy month of sales and he can’t make payroll in full, he may elect to not make the deposits and hope he can make it up later. Now first of all, what he is doing is illegal and secondly it is most likely being done without your knowledge. Since it’s illegal few small companies push the envelope because they don’t want to be thrown in jail. But the legislators and administrators in many states are doing the same thing except on a much grander scale. Instead of depositing the money in a bank or fund, they use the money to pay city, county or state bills. Yes, it’s illegal in all branches of government, too.

Over the last few years, we have been inundated with stories about how Congress has stolen your Social Security payments to pay out-of-this-world federal bills. On top of these unfunded liabilities, state government has been giving enormous pay increases to state employees too, which aggravates the total pension-funding problem. We can all remember the old adage, “Robbing Peter to pay Paul.” At some point, we all must recognize that our younger citizens will be presented with a huge bill because the older taxpayers have run out of money to make up the difference.

In total, America’s private pension plans are under funded by $353 billion for all private-sector American workers, while public-sector plans are under funded by $450 billion, for close to $1 trillion in debt.

Contents of Article

This article contains three sections, “Current Status of Private Sector Pensions,” “Current Status of City, County and State Pensions,” and “Pension Rip-Offs by State.”

Current Status of Private Sector Pensions

It’s not just the government agencies that are committing financial hara-kiri (suicide) with pension funds. Many American companies, faced with unacceptable union demands, acquiesced to generous pension benefits to avoid large wage increases. It is estimated that 20 percent of the American work force expect to receive payments after retirement through defined benefits plans. In many cases, granting “down the road” benefits was the only way they could stay in business. But as these bills come due, business owners can’t turn to taxpayers to demand tax increases to bail them out. They either have to declare bankruptcy, find another means of reducing the debt or sell the furniture.

American companies are now feeling the bite as a result of their labor negotiations with many powerful unions. These endangered companies saw only two courses of action to stay solvent. One was to go back to the negotiating table and ring concessions for their unions – yeah, sure – and I believe they will find an honest politician in New Jersey, too. The second and preferred method was to declare bankruptcy, which United Airlines did in 2002. In May 2005, United won court approval to shift the responsibility for their pension obligations from the company to the Pension Benefit Guaranty Corp (PBGC) so they could stay in business. Now the Pension Benefit Guaranty Corp. works in much the same way as the Federal Deposit Insurance Corp. (FDIC), which guarantees your bank deposits up to $100,000. Franklin Delano Roosevelt created the FDIC at the height of the Depression to restore citizen’s faith in the banking system. The Pension Benefit Guaranty Corp. provides limited assurances for people with private pension plans. As it stands now, the PBGC is itself running a $23.3 billion deficit due to the frightening number of pension plan failures. Currently, there are 1,108 under funded pension plans with a collective debt of $353.7 billion dollars, an alarming increase since the year 2001.

Permitting United Airlines to escape their pension obligations has far-reaching implications. With the court’s ruling, the 120,000 employees of United Airlines can expect to receive about two-thirds in pension benefits to the tune of $6.6 billion, the limit of the agency’s guarantee. But what about the other airlines that have maintained a good track record in the face of ever-growing competition? The president of the Air Line Pilots Association, Duane Woerth, said, “The only way an airline can avoid burdensome pension costs is by entering bankruptcy and terminating the plans. But if more and more airlines choose to shed their pension liabilities in bankruptcy, it sets up the potential for the ‘domino effect,’ in which all the other legacy carriers are incentivized, or even forced, to file bankruptcy, in order to achieve the same cost savings and level the playing field.”

One congressman, Jim Bunning (R-Kentucky), who was especially critical of government’s encouragement of corporate mismanagement through lax rules, said, “I want to know why we should reward lousy management.”

The Bush administration has promised an overhaul of the regulations and the 1974 law that established the Employee Retirement Income Security Act and the Pension Benefit Guaranty Corp. Congress recently sent a pension reform bill to President Bush for signature. The bill sets reasonably strict funding requirements and higher insurance premiums for traditional corporate pensions. The most important mission of pension reform is to protect employees from being shortchanged and taxpayers from having to foot the bill for pension defaults. But in response to intense lobbying, Congress also carved out some big exceptions for ailing airlines, notably Northwest and Delta. That opens the door for other companies and industries to demand special treatment. And by creating the perception of an uneven playing field, the bill could provide yet another excuse for companies that want to get out of the pension business completely.

The only reality for taxpayers to assure themselves of a comfortable retirement is to pull in the belt a few notches by creating your own 410(k) plan that you can control. Regardless of how much mental masturbation occurs over government control of Social Security and assurances by government of bailouts of bankrupt pension plans, take the bull by the horns to assure your own sanity and economic future and have your payroll deductions automatically deposited into your own account. The message is loud and clear – don’t rely on corporate America or the government.

Current Status of City, County and State Pensions

San Diego, California Pension Scandal Reflects Future

San Diego, California is the best place to start the discussion about the huge pension disaster that will befall most cities, counties and states, as San Diego will likely be the catalyst that exposes a series of pension scandals throughout the nation. As in many other cities and states, San Diego politicians have continued to borrow against worker’s pension funds while increasing those same benefits to placate unionized municipal workers. How did this all happen? San Diego traditionally has had low taxes due to citizen’s careful scrutiny of the politicians spending habits. Since the city fathers could not award city workers generous wage hikes, over 25 years they continually hiked their retirement benefits. The logic is simple. The citizens will not realize they were bilked until these same politicians are out of office, retired or six feet under. For many years, instead of saving high investment returns on pension-fund assets for possible negative market reactions (“Rainy day fund”), San Diego took the unusual and fiscally irresponsible step of giving pension-related cash bonuses to its employees. When the stock market went into the dumpster starting in 2000, it is alleged that officials hid the bad news about the extent of the pension liabilities so that they would not be faced with either asking voters for tax increases or telling employees they would need to cut back on benefits. In January 2005, when it became apparent they could no longer hide the truth, officials admitted that the Employee’s Retirement System (SDCERS) was only 67.2 percent funded, with the shortfall exceeding $1 billion.

The city hired a law firm, Vinson & Elkins, to review their disclosure practices from 1996 to 2004. The 276-page report they prepared contained a scathing review of the widespread problem that was much bigger than simple municipal corruption. The report said that although there was no evidence that the city meant to deceive investors, “..in a routine and occasionally careless manner that focused on current issues while regarding long-term concerns as speculative and inappropriate for disclosure.” What that means in the English language is that they buried their heads in the sand, as they did not want to face political suicide by owning up to the truth. The Justice Department and the Securities and Exchange Commission (SEC) are investigating the pension funding for something is definitely rotten in Denmark.

The San Diego City Attorney, who is a part of the investigation, has give the city’s pension board a deadline to deliver privileged documents sought by federal prosecutors. The City Attorney said, “The fact it's taken so much time means there's stonewalling going on." Rumors are flying that one of the major reasons the board is reluctant to cooperate is that they voted themselves generous benefits from the pension plan regardless of the final status of the fund. A likely scenario is that the members will likely invoke their fifth amendment privilege if forced to testify about the shenanigans. Historically, one of the pension board members, Diann Shipionne, blew the whistle by writing opinion articles in local newspapers and testimony before the City Council. Naturally, a top city official was quoted as saying, that she “omitted, slanted and misrepresented facts.” In February 2005, then Mayor Dick Murphy nominated a spanking new 13-member board to replace all of the existing members including Ms. Shipionne, apparently the only honest voice on the entire board. The Mayor rewarded her zeal by stating that the board was better off by starting with fresh faces.

As a consequence of this disaster, San Diego Mayor Dick Murphy has resigned. The scandal in San Diego provides a crystal ball for not only the entire state of California, but more importantly, for the rest of the country. Three days after his resignation, Michael Zucchet, his anointed heir was charged with taking bribes from a strip-club member. The FBI and Securities and Exchange Commission (SEC) are investigating potential fraud and public corruption. The nine-member council that rules the roost only has six members. Perhaps they can’t find three wise men out of the entire population.

San Diego had a reputation of fiscal conservatism and responsible government for many years due primarily to voter’s vigilance of the purse strings. It was touted as the model for other American cities until, that is, politicians kept increasing unreasonable pension benefits to city workers to buy votes and loyalty without making the corresponding contributions to the pension fund. Carl DeMaio of the Performance Institute said, “It’s a financial crisis in the midst of a circus-like atmosphere. City government is in complete paralysis.” San Diego, the nation’s seventh largest city, is unable to borrow any money due to their pathetic credit rating so there is the potential that the city may eventually declare bankruptcy

Orange County, California Employees Get Huge Pension Increase

In 2004, county employee’s pensions were increased 62% by the munificent lawmakers, for after all its only taxpayer money. Every one knows that the culprits who approved this revolting increase will be long gone by the time Orange County taxpayers need to pay the piper.

California Pension Status

After the attention-getting news about the San Diego pension plan scandal hit the media, Governor Schwarzenegger proposed a complete revamping of local and state government pension plans. Naturally, his ideas hit a brick wall even though the state contribution to the pension plan has soared from $160 million five years ago to $2.6 billion in this year’s budget. State Democratic leaders and state employee’s unions refuse to believe the sky is falling. As with his other plans to revitalize state government, since he can’t get anywhere with the drugged mutants who control the legislature, he plans on taking his case to the people through a referendum. One of the major problems the Governator will face is convincing state employees that his proposed switch from a defined-benefit plan to a 401(k)-style plan is in their best interest. Apparently, the same argument that was used to kill president Bush’s “privatized accounts” argument in is vogue in California, although almost every major statistic available from economists provides comfortable assurance of a better return on investment assuming that the stock market doesn’t fall into the Black Hole of Calcutta. But if that happens, your pension will be the least of your concerns as American business as we know it will cease to exist.

New York Pension Status

The state of New York has a $120 billion pension fund. New York used its record-high returns on pension investments during the 1990s to justify future benefit hikes to state and local retirees. One of the major problems with New York and other agencies is the funds are making more speculative investments to cover potential shortfalls. After the stock market tanked starting in 2000, local government’s were supposed to find ways to generate more cash to cover losses in the pension funds. Since this was a Herculean effort for many small municipalities, they basically ignored the problem. How did Albany respond? They permitted these same municipalities to borrow more money. The bottom line of these transgressions is taxpayers not only have to make up for the pension fund losses, they also have to pay for the debt for the borrowed money.

Governor Pataki recently signed into law a bill permitting the New York City Metropolitan Transit Authority (MTA) to borrow $1 billion to invest in the stock market. Fare revenues backed the $1 billion in bonds that were issued to cover the deficit. If the stock market falls, subway and bus riders san expect to see huge increases in fares.

The nonpartisan Citizens Budget Committee (CBC) has recommended that the state convert the pension fund into a system of 401(k)-type accounts. In that scenario, workers would be responsible to invest their own money, with the inherent profit or loss – but that notion will be hard fought by the progressive/socialist consortium. The subtle beauty of that approach is that once the money is transferred to the worker’s account, meddling politicians can’t steal the money to pay other bills. The CBC pointed out that when the powerful unions fail to get expensive benefits through traditional labor negotiations, they lobby the legislature to get those marvelous benefits signed into state law.

Buried amongst the ravings of the unions is the fact that most of these public-sector employees retire at the age of 55 or after 25 years of service. This is virtually unheard of in the private sector. And on top of that, with the average American living to the ripe old age of 75+, these public workers can have a second career of 25 years elsewhere and retire again after another 25 years living their lives in grand style.

The painful truth is that 90 percent of public-sector employees have traditional benefit plans – known as defined-benefit plans because retirees receive a defined amount each month – while just 20 percent of private-sector workers have this type of plan, a sharp drop from 1960 when 40 percent of private-sector workers were enrolled. One of the reasons for the wide disparity is because 36.4 percent of government employees belong to a union while only 7.9 percent of private-sector workers do.

Of course, we can’t escape the classic liberal analysis of the problem. Gerald McEntee of the American Federation of State and Municipal Employees, which represents 1.4 million government workers, added his two cents by saying, “A lot of people are exaggerating the problem. Right-wing think tanks and conservative Republicans want to do away with traditional pension plans and replace them with much cheaper 401(k)’s at the same time they want to give all these tax cuts to the rich.” So people are exaggerating the problem? What planet have you been living on? So how do you propose we solve the problem, Gerald – increase taxes, no doubt?

If we can’t get government employees to accept a small dose of reality and back off of their exorbitant pension demands, then the solution is simple. Clean house and fire 10 percent of all workers – they won’t be missed.

New York City Pension Status

problem. The funds committed may fall well short of the city’s promise to hundreds of thousands of current and retired workers. The city has been using an unusual pension calculation that does not comply with accepted government accounting rules. If private industry did this, the chief officers would be roasted on a spit.

The city’s chief actuary, Robert C. North, says the numbers are “meaningless” when it comes to showing the plan’s financial health. He has prepared a set of alternative calculations showing that the “real world” gap in the pension funds could be as high as $49 billion. This is nearly as high as the city’s annual budget and the equivalent of the city’s publicly disclosed debt.

Now this doesn’t mean that the city will quickly run out of money, but it does mean the city is promising benefits to its current employees it might not be able to provide without substantial tax increases or major budget cuts, and we all know how the money will be found.

The city’s required contributions to the pension fund have quadrupled in just five years from $1.1 billion in 2001 to $4.7 billion this year.

Outside experts say the city’s accounting methods are flawed because it provides a misleading picture of the plan’s actual condition. No other large city or state plan uses this method.

The State Legislature must approve all increases in public employee’s pensions, as legislators have granted billions of dollars of new benefits, often over the city’s objections. Legislators claim that that these new benefits were doled out based on an understanding that they represented no threat to the future generations of New Yorkers who must foot the bill.

New York City pension are comparable to their neighboring state, New Jersey, wherein a teacher, age 55, with 30 years of service, can retire at $51,000. Police, after 20 years of service, can retire at $53,000. In recent years, city retires were given cost-of-living increases, a benefit unheard of in the private sector, plus pension plan contributions were eliminated. New York City has also promised to pay for its retiree’s health care, but no one seems to know how much that will cost. Mayor Bloomberg estimates that it may cost $50 billion but estimates run as high as $100 billion that have not been formally reported.

New Jersey Pension Status

New Jersey is one of the relics of modern pension planning in that bureaucrats run the states’ investment program instead of professional fund managers. In slightly more than two years, the state’s Division of Investment has lost nearly $18 billion in public pension funds, enough to run the state for eight months. Giving the department a fair shake, most managed funds have lost considerable money since 2000, but the losses in New Jersey have forced taxpayers to cough up $200 million in 2005 and $1.6 billion in 2006. In New Jersey, state, county and municipal employees contribute about 5 percent of their salary into the pension fund system, which in turn invests the money. The state’s fund consists of stocks, bonds and fixed income, cash and mortgages. What is really startling about the fund is that the taxpayers have to support the fund if a five-year average on returns falls below 8.25 percent per year. As of June 2004, the returns for the prior five–year period averaged 1.5 percent. Guess who is reaching into their pocket to make up the difference. I’ll bet you will be hard pressed to find “such a deal” for workers in other states.

So how does the state pension system compare to private sector plans. According to Michael Diamond of the Gannett New Jersey newspapers, a 58-year old firefighter in Camden made $76,000 in his final year of work. He retired with $53,000 a year and health benefits for life. On the opposite end of the spectrum, a cardboard box manufacturer in Cherry Hills worked for 25 years until the company folded in 1999. His annual pension is $5,520 per year. He and his wife moved to Delaware where property taxes are 81 percent lower.

Pension problems are aggravated by retirement benefits fit for a king, tacking (holding multiple state jobs) and outright taxpayer abuse. The system is heavily weighted to the worker’s benefits are calculated based on the three highest salaries rather than an average of all years of employment. Who in their right mind have ever heard of such a grand giveaway? Here’s where the unfair benefit calculation and tacking come into play. The worker can be employed in one lower paying job for 20 years, raking in as much overtime over the last three years as humanly possible, and then after retiring take on a second job for 3 to 5 years at a higher salary to ramp up the pension. One individual somehow managed to hold eight part-time jobs that paid him total of $264,284 a year. He retired on slightly more than $150,000 per year. In comparison, the Chief Justice of the U. S. Supreme Court makes $203,000 and the governor takes home $175,000.

New Jersey State Workers vs. Private Sector Workers

In an article published in The Star-Ledger, New Jersey state workers salary and benefits were profiled along with a comparison of state worker salaries and benefits versus private sector employees.

This comparison was prompted by a desire by a few state congressional leaders (and it must be assumed by the majority of the citizens of the state) to bring these salaries and benefits in line with the private sector.

Comparing Contracts between State Workers, Teachers and Two Private Sector Unions

Although state workers are represented by seven different unions, the largest and most powerful union is the Communications Workers of America (CWA) representing almost 40,000 state workers. The two private sector unions shown include low-paid casino workers (who often garner much of their income from tips) and a typical butcher at Shoprite Supermarkets.

Item	State Worker (CWA)	Public School Teacher	Casino Service Worker	Shoprite Butcher
Pay	$52,000 (median)	$60,723 (average)	$4-$20 per hour	$50,128 (average)
Holidays	14	(Note 1)	9	9
Raises in last contract (annual average)	2.87%	4.65%	3.47%	3.38%
Vacation	12 days 3 weeks after 5 years on job 4 weeks after 12 years 5 weeks after 20 years	(Note 1	2 weeks 3 weeks after 8 years	1 week after 1 year 2 weeks after 3 years 3 weeks after 8 years 4 weeks after 12 years
Sick days per year	15	10	0	12
Annual Pension (25 years service)	$21,137	$26,635	$10,800	$16,500
Retirement Age	55 (After 25 years of service)	55 (After 25 years of service)	65	60
Note 1: Teachers work on 10-month contracts. The school year includes 182 days of instruction and a few days per year for parent-teacher conferences depending on their contract.
In comparing schoolteacher salaries, let us not forget that most teachers (but not administrators) have virtually the entire summer to run a small business and make between 5,000 and $20,000 in additional income, if they so desire. Therefore, a one-on-one comparison to other workers salaries does not necessarily reflect reality.

Comparing Benefits between State Workers and Private Sector Employees

Item	Private Employees	State Employees
Defined benefit pension	18%	100%
Medical Insurance	69%	100%
Free Health Insurance	12% (Note 1)	60% (Note 2)
Health Benefits for Retirees	5%	100%
Dental Plan	45%	100%
Vision Care Plan	28%	100%
Prescription Drug Plan	63%	100%
Note 1: In calculating take-home pay, the average private sector worker without free health insurance may often pay $800 per month for a family of four for medical premiums, reflecting a salary loss of at least $10,000 per year. Note 2: State workers in the NJ Plus plan pay no health insurance premium.

New Jersey Advisory Panel Recommends Pension Cuts

In November 2005, an advisory panel has recommended substantial changes to the retirement system for public employees to erase the state’s unfounded pension obligation of $12.1 billion. Their “key” recommendations include the following:

· The retirement age for teachers and state workers would be raised from 55 to 60 to save $175 million

· Employees of the state and some local governments would pay a greater share of their health insurance premiums

· Pensions for municipal attorneys, assessors and “other” professional services vendors will be ended.

· End the abuse of “double dipping” whereby state employees hold two or more jobs. This issue is especially bothersome to many New Jerseyans.

· Bar pensions for convicted public officials

· Bar the practice of borrowing money to pay for personal obligations.

· Base pensions of the average of the five highest annual salaries instead of three highest salaries.

The panel noted that 91 percent of private employers use the age of 65 as the retirement age for full benefits, and at least 13 states have a cutoff that exceeds 55. Greg Edwards, president of the Center for Policy Research of New Jersey, said, “People are living longer. Many people are choosing not to retire at an early age. And early retirement is a bad incentive to provide, especially for teachers.”

The panel went so far as to “reluctantly” recommend the sale of state assets to close the gap. The Apathetic Voter is aware of a hockey arena in Newark that might fetch a $1/4 billion bucks as starters.

The panel recommended that active state workers, along with employees of municipalities, totaling 212,019 retirees and beneficiaries and 532,465 active workers, contribute more toward their health insurance. Currently workers with the most basic coverage pay nothing. Those insured by HMOs pay 5 percent while those with the most generous policies pay 25 percent. The panel said that if the state required a 10 percent contribution for those insured under the most basic policy, state and local governments would save $489 million per year.

Unfortunately, the panel took no action on the following possible remedy to reduce the horrific burden of the state’s fringe benefit costs:

· Convert the existing pension system into a “defined contribution” plan like a 410 (k) for newly hired public workers. Earlier this year, the state’s pension director predicted that without major changes, the $2.2 billion bill for health insurance premiums and retirement benefits could triple in just 5 years.

The panel cited one unnamed employee who earned less than $10,000 a year in public service for 24 years, then was paid $141,000 for one year as a prosecutor. That gamesmanship, that likely is practiced by more pensioners than we want to believe, changed his pension from $3,600 to $70,000 annually.

Who are these political neophytes making these recommendations? Don’t they understand that the taxpayers of New Jersey just love dumping their hard earned paychecks into the perennial horn of plenty, to be feasted on by the ½ million active and retired government employees?

Naturally, the powerful teacher’s union, which represents 192,000 teachers, and other unions are screaming bloody murder. Changes to the pension system only require action by the legislature, but changes to healthcare premiums must be negotiated with the powerful unions. Just watch the fireworks at the negotiating table during the next round of contract negotiations.

The Apathetic Voter has a simple solution to the problem if the unions adamantly refuse to accept the desired healthcare changes. Simply furlough 10% of the 532,465 active workers – they won’t be missed. Corporate America often uses that ploy with great success to clean out “dead wood.”

Even the Europeans Recognize the Problem

Even the Europeans (who are renowned or defamed depending on your outlook) for their cradle-to-grave welfare system, recognize the problem. In Great Britain, the Pensions Commission has recommended rising the retirement age to 69; Italy has raised the age from 57 to 60; Belgium is considering raising the age from 58 to 60; and Germany will raise the age from 65 to 67 between 2012 and 2027.

The Pensions Commission, which also has recommended the use of individual retirement accounts (which have been so disparaged by the liberal/left clique in this country), reported that there will be 50 percent more pensioners by 2050 and that and that nearly 10 million people are not saving enough for their retirement. Unless drastic action is taken the pension fund gap will approach $100 billion by mid-century. The British plan borrows from Sweden, perhaps the most socialized country in the European Union, that has augmented state pension plans with private savings accounts, but you won’t read about the success of this idea in any AARP publications. As a matter of fact, you will only read about two countries that have had a degree of negative results using privatized accounts in heavily biased AARP publications, but not about the eighteen countries, including communist China, which have had very successful results with some people retiring with three times as much money then if they had relied on the state pension system.

Even General Motors Recognizes the Problem

Over the years, General Motors (GM) executives undermined the company by offering lucrative health benefits in union negotiations to continue their production lines. Just as with state and local governments and numerous other corporations, creating new debt was a better option than direct cash payments, which was an irresponsible act but it kept the doors open. As we have all become painfully aware, all of these organizations must pay the piper or renegotiate their union contracts. But apparently, the United Auto Workers (UAW) understands the predicament facing GM especially with foreign competition, so they are committed to work with the company to share in the costs of their healthcare benefits. Henceforth, healthcare costs for retirees will total as much as $370 per year for individuals and $752 a year for families. Drug co-payments will rise to a maximum of $18, up from $10. This may seem to be a trivial amount to most private sector workers who pay much higher amounts for their healthcare premiums, but it’s a step in the right direction. GM claims that the changes will save it $1 billion a year.

Illinois Pension Status

As if California, New York and New Jersey don’t have horrendous pension funding problems, Illinois is not far behind. It’s obviously a national plaque. For the current year, Illinois faced a $2 billion budget shortfall, so they stole the money from the state pension fund to cover the debt. Illinois even floated a $10 billion bond issue to cover some of the pension deficit a few years ago. Illinois now has a $35 billion collective shortfall in the pension fund.

Texas Pension Status

At least in Texas, where the pension system has an $11 billion shortfall, legislators are trying to solve the problem. Legislation was recently signed that restructures the benefit calculations for many educators, changes the retirement age for future teachers, and bars school districts from offering early retirement as an inducement. The age for receiving full benefits will be raised from 55 to 60 as of 2007.

Conclusions

If the politicians are able to take the bull by the horns and at least legislate a few partial fixes in Texas, why can’t this happen in California, New York or New Jersey? The answer is it can’t because the government employee unions have too much clout, especially the United Federation of Teachers. With the astronomical growth of government and its corresponding employment levels (21 million and counting), each day the unions become virtually omnipotent. Unless we put a halt to the power of government, there will be no possible recovery.

Now we can add municipal pension fund scandals to Social Security insolvency problems coupled with the avalanche in Medicare expenditures to our worry list. We can be thankful that the Democrats will have an answer – increase taxes!

Pension Rip-Offs by State

Below is a list of pension rip-offs organized by state.

State

Date

Pension Rip-Off

Alabama

Alaska

02/01/06

Alaska Faces Pension Time Bomb

One of the few states to carefully assess their pension liabilities, Alaska estimates the pensions for future retirees including healthcare exceeds $5.7 billion, and yet the state is building two bridges to “nowhere” for a total cost of almost $1 billion. Oh yes, I forget, that money is coming from the feds, so obviously it doesn’t count.

Governor Frank H. Murkowski called a special session of the Legislature and pushed through changes in pension and retirement healthcare benefits for new state employees. That was all he could do, because the state constitution forbade him from changing the benefits of current employees. Instead of comprehensive, subsidized medical coverage, new public workers will have a high-deductible plan and health savings accounts. Health savings accounts? Has AARP heard about this?

Arizona

Arkansas

California

02/01/05

Majority of Firefighters and Police Retire with Higher Paying “Disabilities” Pensions

Los Angeles County firefighters and sheriff’s employees receive lucrative disability pensions at rates two to three times higher than their city and state counterparts.

The percentage of county public safety employees getting enhanced pension benefits is similar to that of the California Highway Patrol officers, who have the highest rate in the state.

02/01/05

Highway Patrol Top Officers Disability Pension Rip-Offs

The Sacramento Bee reported that after an internal investigation, many top officers of the Highway Patrol file for worker’s compensation with claims of job-related stress as they near retirement. They tend to gain disability pensions nearly equal to their top-line salaries. An internal investigation found 15 cases meriting further investigation and possible criminal prosecution.

06/15/06

Pension Crisis Looms in California

Businesses are required to comply with the strict requirements demanded of private businesses in accordance with the FASB (Financial Standards Accounting Board). If private business hid their true liabilities from their shareholders the Securities and Exchange Commission (SEC) would be screaming to the rooftops, and the CEO and other offices might face stiff jail sentences. Naturally, government agencies have been exempt from similar provisions until now. New accounting rules that go into affect for government agencies will reveal the true crisis of unfunded government liabilities for the first time.

In California, when the truth is revealed, counties like San Diego and Orange may go belly up. The Los Angeles Unified School District has acknowledged unfunded liabilities of $10 billion. Recognizing the problem, several counties had to cut their services to citizens in order to allocate funds for the long-term haul.

Colorado

01/01/06

According to the Denver Post, Denver Public Schools (DPS) face a $21.5 million budget shortfall in the next school year because of flat enrollment and increased pension costs. In the past, DPS leaders have faced tough decisions and taken actions such as closing schools, cutting money from central administration, and made principals pay “head taxes” back for each student enrolled.

Each student is worth roughly $6,600 in funding for the district, far short of the $16,000+ that the city of Newark, New Jersey gets for each of its students. This year, there are 570 fewer kids enrolled in these schools, but charter school attendance has soared from 2,452 students in 2002 to 6,213 students this year, obviously reflecting parent’s dissatisfaction with the area’s schools.

On top of the loss of students, the district may need to pay out $9 million more in salaries and benefits for its 5,700 employees, even though there are fewer workers than the prior year. In addition, in 2006-2007, DPS may have to contribute $4.1 million more towards its retirement program, a number that may be $1 million higher if the district doesn’t merge with the Public Employees Retirement System.

So while administrators at schools across the country complain that charter schools drain precious resources, reality dictates that fewer students should mean fewer classrooms, fewer teachers and fewer expenditures, but that’s rarely mentioned. Upon closer examination, the real culprit is the aforementioned increases in salaries, benefits and pensions that are causing the financial problems.

04/15/06

Double Dipping Cops Are Typical of Policy Abuse

Public servants claim their salary is not commensurate with the private sector (although that has been disputed by many studies); Accordingly, they deserve the generous pension granted by the politicians. However, news media is replete with stories of abuses of government policies that would never be permitted in the private sector.

According to the Denver Post, On Aug. 15, 2005, Denver police officer Chris Cameron used sick time to take a day off from his scheduled patrol shift. Then he put in nine hours of overtime, getting paid time and a half.

It's not the only time Cameron has earned overtime after taking a sick or vacation day, city payroll and police administrative records show. He did it 33 other times in the two years ending last November, the most recent period for which records were available. And he is far from alone. Police policy allows officers to bank some of their sick time, then use it like vacation when earning overtime for special police details or working second jobs.

Fire and sheriff's officials have similar sick-time benefits, but most city workers cannot bank their sick leave, than tap into it like vacation. Denver's police policy also gives officers much more latitude in working second jobs than do some other large and medium-size cities. Officials from the mayor's office had not heard of the policy until contacted by The Denver Post but said the police chief should review the practice.

Over two years, Denver police officers made at least $16.9 million for off-duty work. Some put in the equivalent of 30 extra weeks a year, raising concerns about fatigue and its impact on the officers' ability to protect themselves and the public.

Connecticut

Delaware

Florida

11/15/05

Miami-Dade Employees Walk Away With 100% Unused Sick Leave

Miami-Dade County employees can retire with a check for 100% of their accrued unused sick time in addition to their pension. Most public agencies put a cap on the payments. According to the Sunday Herald, 30-year employees can walk away with checks amounting to $200,000 or $300,000. To-date, this generous taxpayer giveaway has cost the county $10 million.

Other urban governments, like Chicago and Harris County, Texas, (Houston) don’t offer a penny for unused sick time. A few, like Los Angeles, have a similar 100% sick pay policy, while Broward County, caps sick-time payments at 960 hours.

Politicians and public officials laughingly counter that perks such as pay for unused sick time are needed to offset the benefits offered to private sector employees who are given stock options and other benefits to retain good employees. Private enterprise, which very rarely offers any form of retirement compensation for unused sick time, counters that the public sector offers lucrative pensions and early retirement. Let’s cut to the chase - where else can you work for 25 years and retire with a handsome pension but in government, and then go to work again for another agency drawing an additional salary and a substantial increase in your retirement windfall?

01/01/06

Florida Widow Tries to Get Convicted Husband’s Pension

The widow of Miami City Commissioner Arthur Teele Jr. filed an appeal with the Third District Court of Appeal to toss out a felony conviction her husband received just months before his death, in order that she can receive his pension as his surviving spouse. Teele was convicted of threatening an undercover Miami-Dade police officer but acquitted on a charge of assault, and he was removed from office only weeks before he would have qualified for Miami’s retirement pension for elected officials.

According to the Miami Herald, several months downstream, various pending public corruption charges as well as public humiliation of sordid, unverified allegations about his personal life were circulated through the media, including a relationship with a transvestite prostitute. At that point, Teele shot himself to death in the lobby of the Miami Herald. Due to his death, he was never tried on the public corruption charges.

His wife, Stephanie Teele, filed the appeal to overturn the conviction so she may receive her husband’s $39,100 annual pension. She claimed that her husband shot himself because, “Ultimately, it was more than my husband could stand…. We all knew that it was not true.” The court has agreed to hear arguments to overturn the conviction. Stephanie Teele claims that her appeal is not so motivated by the pension but to clear her husband’s name. But I’ll bet the money doesn’t hurt though, does it?

Georgia

Hawaii

Idaho

Illinois

05/15/05

Illinois Chief Financial Guru Rakes In Salary and Pension

The man in charge of finance for Illinois’ public schools, James Hintz, will earn $375,000 this year just in time to fatten his pension, which is equal to 75% of his last four years of salary. Part of that compensation is a check for $101,566 for health insurance, which he doesn’t need to spend on health insurance. When he retires at the end of June, he will receive a pension of $217,000 for the rest of his life. Officials in the school district claim he is worth every penny as he has saved the school district over $25 million during his tenure. That excuse doesn’t seem plausible as many management employees manage to get end-of-tenure “stipends” during their last four years to bloat their retirement pay.

06/03/05

Robbing Peter to Pay Paul

The Illinois governor and top Democratic lawmakers reached a deal to add more than $46.7 million to the Chicago Transit Authority’s budget and “fill” a $1.2 billion gap in the state budget, but guess how? The politicians know the ropes. They’ll simply steal the funds from the state pension system, which now has an unfunded liability of $35 billion.

When will the people wake up and realize that someone must pay that bill and it is likely it will come sooner than later?

02/01/06

Chicago Public Schools May Lay Off 1,000 Teachers

In order to balance the budget, the city of Chicago may need to lay off over 1,000 teachers. According to the Chicago Sun-Times, a pension time bomb began ticking when lawmakers gave Mayor Daley control of city schools in 1995. At the end of the next school year, new teacher pension costs will triple overnight to $69.4 million.

Chicago is considering various measures to balance the budget including laying off 690 to 735 teachers and aides and increasing class size, and axing some pet projects Daley touted in his last re-lection campaign. Shrinking enrollment will cost about 600 teachers their jobs, bringing the loss to as high as 1,335 teachers.

Chicago, with 427,000 students and more than 600 schools faces up to $328 million budget shortfall while still complying with the Bush administrations’ No Child Left Behind Act. Chicago Public Schools (CPS) CEO Arne Duncan warned that the $70 million pension payment would grow to $200 million by the year 2010. Duncan suggested a temporary solution to change the pension formula that would cancel next year’s $69.4 million CPS pension payment, but the teachers are rebelling at the idea.

Chicago Teachers Union President Marilyn Stewart naturally said she would oppose an increase in class size. Not one word was mentioned about the possibility of the teachers giving up a portion of their lucrative benefits package to save some fellow teacher’s jobs.

02/15/06

Illinois Local Government Has $15 Billion Pension Deficit

At about the same time Chicago was caving in to the retirees, it was announced by the Chicago Sun-Times that Illinois has a $15 billion deficit out of the $48 billion owed to city and county retirees, and that number does not include state government. The Civic Federation is warning that taxpayers may soon be stuck with the bill for the benefits. A spokesman warned that “these benefits must be paid, so taxpayers will be on the hook unless something is done to reform how these plans are funded. It’s a very disquieting situation for local governments.”

Even the Chicago Transit Authority projects that the pension fund will be empty by 2012 without reforms.

Indiana

Iowa

Kansas

Kentucky

Louisiana

Maine

Maryland

04/15/05

Montgomery County Giving Away the Store

Montgomery County, Maryland politicians have proposed to renew the contract for firefighters with hefty pay raises and eligibility for retirement after 20 years instead of 25 years. A firefighter with 20 years experience would retire on between $67,000 and $74,000. The politicians argue that firefighters in Prince George’s County have long had a 20-year retirement option. On the flip side, these same politicians argue that the spiraling costs of government are mostly out of their control due to salaries and benefits given to teachers, firefighters, police officers and other public workers. Duh! If you didn’t give away the store to buy votes, maybe the problem could be controlled. Firefighters can retire at half pay with FULL benefits (of course, they need not make partial payments to support their healthcare as is becoming standard in the private sector). Assuming that the majority of workers started working for the county/state at the age of 20, these people can retire at the age of 40, hardly past their prime, removing highly skilled people vitally needed by the community. These same employees can then go work somewhere else for 25 years (like the rest of us poor slobs) retiring again on another full pension.

The worst part of this rip-off of the taxpayers is that henceforth, every public employees’ union around the country will enter negotiations with the state or county and scream, “We want what they did for their public servants in Montgomery County,” driving up costs for all municipalities.

02/01/06

Maryland Faces Pension Time Bomb

Maryland spends about $311 million annually on retirement health premiums. When the state calculated the estimated cost of retirement benefits for current employees, the total was $20.4 billion. Under the new GASB accounting rules, the $311 million will jump to $1.8 billion that must be accounted for in next year’s budget.

Massachusetts

Michigan

Minnesota

02/01/06

Duluth, Minnesota Faces Pension Time Bomb

According to the New York Times, Duluth, Minnesota was a city worker’s paradise. The city promised their workers free lifetime healthcare at retirement for the workers, their spouses and their children up to the age of 26. But no one knew what it actually cost, so three years ago they decided to find out.

The hired an actuary who reviewed the demographics and other factors and determined that the cost to the city would be $178 million, or about double the city’s budget. The alarming situation is that shortsighted administrators and comptrollers have only examined the bills that face them in the upcoming fiscal year. They simply continued to promise schoolteachers, firefighters and other employees the moon when they retire, and yet a small percentage have ever kept track of the long-term liability they face.

Mayor Herb Bergson bluntly said, “We can’t pay for it. The city isn’t going to function because it’s just going to be in the healthcare business.” Is this man mad? How dare he challenge the ordained rights of city workers? In response, the city has issued a new accounting rule that takes effect in two years. It instigates radical cutbacks for government retirees but also opens the door for powerful economic and social repercussions. Experts are warning that dramatic tax increases may be a major part of the solution.

As a demonstration of their infinite wisdom, the city actually offered free retiree healthcare as a cost-cutting measure back in 1983. Duluth traded off a ballooning obligation of the cost of trading in unused sick days and vacation days at retirement for the free healthcare.

States must reassess their obligations both realistically and because of a the new accounting standard prepared by the Government Accounting standards board, known as GASB, which is a sister organization to the Financial Standards Accounting Board (FASB) that writes accounting rules for the private sector. GASB said that public employee’s unions complained that as soon as the new standard was released, governments would be forced to disclose the cost of their plans, and they would likely cut or drop them, just as private sector companies have done. So what did they expect? Did they want the board to suppress the new more realistic rules so they could continue riding the gravy train?

Under the new rule, outlined in the boards’ Statement Number 45, large public governments and school boards with large healthcare obligations to retirees will have to start reporting their overall benefit costs in 2007.

The frightful thought about Duluth’s discovery is that thousands of cities and towns across America face the same predicament. They must all do some soul searching and financial discovery to determine what bad shape they are likely in. Stephen T. McElhaney, an actuary and principal at Mercer Human Resources, a benefits consulting company that advises state and local governments, estimated that the national total could be $1 trillion.

Mississippi

Missouri

Montana

Nebraska

Nevada

New Hampshire

New Jersey

02/17/05

Former Governor Florio Paid as Full-Time Rutgers Professor

Former Gov. James Florio has been adding to his state pension for years via the state college system.

According to The Record, Rutgers University has been paying Florio $90,947 as a full-time professor. He teaches one class per semester and sits on two advisory boards. Florio admits it’s not a full-time job - he runs a tax-lien company and works for a law firm. But the Rutgers job gives him a good salary, state benefits and that all-important pension boost.

02/11/05

Acting Governor’s Brother Benefits From Shady Deal

Acting Governor Dick Codey’s brother, Robert Codey, a state prosecutor since 1988, has been hired in a “special deal” to help the county prosecutor with organized crime. He is earning $48,866 more is his new assignment and will be eligible for a pension that’s about $36,000 higher than if he had retired just one year ago. The county agreed to reimburse the state for the additional wages but according to Division of Criminal Justice spokesman John Hagerty, they could have gotten him for free.

Of interest, his salary is $20,000 higher than his DIRECT supervisor and 136 deputies who rank above him. And you thought the spoils system was dead.

03/14/05

New Jersey State Employees Benefits to Triple

Currently, the state of New Jersey spends $2.2 billion for teacher and public employee benefits. These expenses are expected to climb to an outrageous $6.7 billion by 2009 according to the director of the Division of Benefits and Pensions. It all started with a 9% increase in benefits passed in 2000 by a bill sponsored by Senator Nicholas Asselta of Cumberland. We have been fed the propaganda that “dedicated” public servants accept modest public paychecks in return for job security and retirement benefits. One need only look at the salaries paid to state troopers after 3 years service to immediately dispel that myth.

03/16/05

Convicted Ex-Mayor Loses Pension

Patrick G. Malloy, the convicted ex-Mayor of New Hanover Township, after the state’s Public Employee’s Retirement System Board voted 3 to 1 that his decades of service did not meet the state’s standard of honorable service. The state boards are considering whether convicted Essex County Executive James Treffinger, who was convicted of obstruction of justice, should be allowed to collect his $2,700 per month pension, while the state teachers’ retirement board is considering whether former Assemblyman Anthony Impreveduto, who was convicted of misuse of $50,000 in campaign funds, should continue receiving his $4,855 monthly pension.

The irony of these decisions is why do these egregious situations need to come to a vote? Do the citizens of New Jersey want to stop corruption in that state? Why has the legislature not passed a simple law that states that if an elected official is convicted of any crime against the people, they automatically lose their state benefits? Two bills have been introduced by lawmakers to do just that. There are so many crooks in state government that I predict that these bills have about as much chance of being passed “as a snowball in Hell.”

04/08/05

Teachers Pension and Annuity Fund Take Action

Members of the Teachers Pension and Annuity Fund must have gotten the message about New Jersey being the corruption cesspool of the nation, because they cut former Assemblymen Anthony Impreveduto’s pension from $55,524 to $40,350 per year for his years of service as a Secaucus High School supervisor. Wow! Now before tears flow from your eyes in concern for how this man can possibly live on this pittance, let us not forget that there are not many items he can purchase while in the slammer. What a pathetic joke! In three years he will also become eligible for a $25,000 per year pension for his service as an assemblyman and chair of the Legislature’s Joint Committee on Ethical Standards. Here’s another example of the double jobs – double pension racket in New Jersey. But in three years, you can bet he’ll get his pension because all will be forgiven.

It’s a very simple problem. The legislature must pass a law that mandates that any state employee who is convicted of any crime against the people automatically lose his or her benefits. If this had been almost any other state (perhaps other than New York), which is the penalty that would have been imposed.

04/28/05

New Jersey State Employees Benefits to Triple

Currently, the state of New Jersey spends $2.2 billion for teacher and public employee benefits. These expenses are expected to climb to an outrageous $6.7 billion by 2009 according to the director of the Division of Benefits and Pensions. It all started with a 9% increase in benefits passed in 2000 by a bill sponsored by Senator Nicholas Asselta of Cumberland, who spewed out the propaganda that “dedicated” public servants accept modest public paychecks in return for job security and retirement benefits. One need only look at the salaries paid to state troopers after 3 years of service to immediately dispel that myth.

05/15/05

New Jersey Pension Funds Finally Clamping Down

Maybe, just maybe, the New Jersey pension fund boards are finally getting the message from the people of the state. The Public Employees Retirement System reduced convicted Hudson County executive Robert Janiszewski’s pension from $59,760 to $13,620 per year. The best news is that only one member voted against reducing Janiszewski’s pension because he thought the punishment was too lenient. He wanted Janiszewski to get zero – zip – nada! The same trustees also suspended former Hoboken Mayor Anthony Russo’s pension of $3,884 per month when he was sentenced to 30 months in prison for taking kickbacks.

06/01/05

State Employee Has Eight Part-Time Jobs

Although this piracy is perfectly legal under state law, we have to include this disgrace under the category of scandals, indictments and corruption, as it goes far beyond the simple definition of government waste. As the ultimate abuse of “tacking” (holding multiple state jobs), Former Ocean County Freeholder Damian G. Murray has eight part-time jobs that pay him $268,284 a year. Among the jobs he held are as a member of the Orange County Library Commission, an Orange County Freeholder, Judge of the Little Egg Harbor Municipal Court, Judge of the Dover Township Municipal Court, and Magistrate of the Beachwood Municipal Court. It doesn’t take a rocket scientist to quickly determine he could not work more than one hour per day at each assignment, but what about travel time between each part-time job? The clincher is his retirement pay is about $150,000 per year. Even excluding travel time, the good judge has been paid $134 per hour. With travel time, it likely equals about $270 per hour. I’m sure we can all agree he was worth every penny.

06/10/05

Housing Authority Won’t Pay $66,000 Increase in Executive’s Pension

The Newark Housing Authority Board thought that they had pulled a fast one on the taxpayers when they included a buyback option in the contract with Executive Director Harold Lucas, which would have boosted his pension by $16,736 to $71,275 per year. His contract expired on June 30^th and he is already one of the highest public housing directors in the country at $222,688 in base salary. Of interest, the money that was going to be used to finance this piracy was from a 1980 bond that was repaid in 2002. The Housing Finance Corp. was supposed to return the money to the federal Dept. of Housing and Urban Development (HUD) but it somehow slipped through the cracks. HUD officials said that investigation into the Newark Housing Authority continues. You can be assured that the exec’s little bonus won’t be the only waste and/or corruption that will be found.

08/15/05

State Workers Fight Plan To Pay for Prescription Drugs

The state of New Jersey is working on a plan to make active and retired state workers pay a portion of their prescription medications to save the state $24 million. When a state is battling backbreaking taxes, it is too much to ask state workers to share a part of the burden the rest of the worker bees within the state must endure. The plan would require state workers to continue making co-payments of $7 to $36 for drugs until they reach a $552 cap. Personally, I am aware of one of my own family members, even with a private health plan, who continues to pay out $750 per month (not per year) for his prescription drugs. Is $552 per year asking too much of state employees? State employees use the tired ploy about how their pay is far lower than the private sector but we know that at least in New York, state workers average 15% higher than the private sector. If similar information about wage differences becomes available for New Jersey public versus private workers, the Apathetic Voter will immediately broadcast that news.

As a key point that those of the liberal bent never seem to understand even if state workers are required to pay 10% of their medications, they will be much more selective in choosing generic drugs over brand names to save themselves and the taxpayer a few dollars. Without that incentive, they’ll always demand the most expensive medication because why should they care?

Senator Jon Corzine, the leading gubernatorial candidate has come out against the plan naturally siding with the union, for after all it may buy him the votes he needs to carry the election in November. Since we are aware that candidate Corzine has no plans to stop the cancerous growth of state government, a vote for anyone else would be a step in the right direction.

02/01/06

Another Pension Rip-Off Scheme

Recently the new media on the east coast has been filled with articles and letters attesting to the many hardworking state and county workers who work 20 to 25 years and retire on a pension of less than $20,000. The majority of these letters were written by union representatives who are defending their union membership. They claim that the majority of state workers do not abuse the system and should not be “lumped” in with the charlatans who abuse the system to obtain outrageous pension benefits. But when the news overflows with stories of one abuse after another, it is hard to separate the wheat from the chaff, as in the article below.

The borough administrator position in Middlesex Borough became vacant when Joseph Manning resigned. According to the Courier News, in the old shell game, the former mayor, Ronald S. Dobies, applied for the position. The council received 38 resumes for the position but the only candidate interviewed was (you guessed it) the former mayor. Council President Gerald D’Angelo strongly supported mayor Dobies for the position, immediately followed by Mr. D’Angelo resigning his position as council president and assuming the role of the new mayor.

Mayor Dobies was a part-time mayor earning $2,400 a year. If he continued in his current position, his pension would have been $1,309. As borough administrator, his salary is $85,000. If he continues in that position for at least three years, he can retire on an annual pension of $46,363. The citizens of New Jersey want to know – “Are these ongoing stories of pension abuse just isolated cases, or is this manipulation of the system legal but widespread theft?” From the many stories of abuse, it most certainly appears to be an epidemic that has gone on unabated for too many years.

Want to start finding ways to cut the budget, Governor Corzine? Change the pension system RETROACTIVELY to one similar to private industry wherein a pension is calculated based on a worker’s salary each year instead of only the last 3 highest salary years.

For more ammunition, see the “How New Jersey Part-Time Workers Stay in Pension Hunt” story below.

02/15/06

How New Jersey Part-Time Workers Stay in Pension Hunt

According to the Asbury Press, knowing how to play the game of employment with the state system within New Jersey can lead to lucrative pensions. In order to stay within the pension system, workers will accept pay of $1,500 per year so their benefits don’t get interrupted, until a full-time position becomes available. This practice is known as “pension bridging.” We must also recognize that for that $1,500 they are rightfully not expected to do much work. A number of legislators have had low-income staff aides who may work in community outreach programs or “constituent work” or even simply review documents.

Within the politicized system, a worker’s pension is calculated based on the highest three years of salary, their years of service and age. So if a worker receives a minuscule $1,500 for 5 years, 10 years or 20 years, and then lands a high paying job for the last 3 or 5 years before retirement, their pension is based on only that last 3-year period.

In 2005, 92 legislative aides were paid $1,500 and 229 were paid from $1,501 to $4,500. The numbers are down significantly this year because of the anti-nepotism law (passed in 2005), which prevents lawmakers from hiring their relatives, and pinpoint scrutiny by the media and the voters.

Assemblyman Christopher Bateman (Democrat, Somerset) said he has kept former Somerset County Freeholder John Kitchen on his payroll for more than 10 years as a “banking advisor” since he is a bank president. Kitchen has been enrolled in the state pension system for 27 years and five months. Bateman said Kitchen was paid $1,500 for his “advice,” and that his salary was not designed just to keep him in the pension system. Bateman followed that up with, “That wasn’t it at all. He doesn’t need the money … He does it because he wants to be involved.” Maybe someone should have told Assemblyman Bateman to check his facts because Mr. Kitchen accepted the high paying position of deputy golf commissioner for Somerset County, which according to sources, was a position “designed’ just for his qualifications. How can anyone righteously devote adequate time to the efforts of running a bank and being a deputy commissioner at the same time? It’s a physical and mental impossibility.

Anyone want to give me 10 to 1 odds that Mr. Kitchen will retire in exactly 3 years and one day with a very handsome pension?

04/01/06

Another New Jersey Pension Rip-Off

Every time there is a scathing article that demonstrates how high ranking dedicated public servants rip-off the taxpayers with another sordid pension abuse, letters magically appear in the media about the plight of the “average” public employee written by the representatives from the unions who defend their constituents, claming that the average New Jersey state employee retires with around $18,000 per year (it is difficult to determine the precise amount because each letter quotes a significantly different amount).

But we citizens can’t help notice that every few days there is another news article exposing some new effrontery of the taxpayers.

Finally, an attempt by a Wall Township Business Administrator to substantially increase his pension was thwarted by state pension officials, no doubt due to the spotlight that has been focused on these spoiled children’s outlandish behavior. Jack M. Hahn claimed he should be credited with three more years of retirement benefits when he quit his job after 31 years and became a consultant to the same municipality at which he earned $145,861 for those three years. Hahn claimed that the municipality offered him health benefits as part of his consultancy package, but in reality he should have the 3-year consultancy gig added to his retirement, which would increase his pension from $69,564 to $88,737. Grievance number 1: where else could a business administrator retire on $69,564 per year ($5,000 bucks a month), unless the man’s salary was $150,000 a year or better, an extraordinarily high salary for an administrator?

Hahn claims that in return for the consulting deal, he agreed to forego the compensation for 744 days of sick leave and vacation days due to him. Grievance number 2: where else but in government employment is anyone compensated for two years of accumulated sick and vacation days? Even though Mr. Hahn received the consultancy salary, Wall Township Superintendent James F. Habel contradicted his claim by saying, “Mr. Hahn did not perform any duties as special consultant … there were no copies or documentation, including logs of attendance, minutes of meetings, correspondence or any other form of proof that would support a claim that Mr. Hahn performed duties as a ‘special consultant’”. Grievance number 3: Apparently Mr. Hahn was paid for zero work for 3 years and now he wants to add to the scam by claiming he’s owed a larger pension. What brazen chutzpah!

06/15/06

Former Mayor of Newark, New Jersey will Pocket $323,654 Annually

Sharpe James, the 70-year old former mayor of Newark, New Jersey, has retired from his position after 36 years and started a new job as head of the Urban Issues Institute at Essex County College.

His annual income is now comprised of:

· An annual pension of $124,654 as the former mayor of Newark

· $49,000 salary as a state senator

· $150,000 salary as the head of the Urban Issues Institute.

The combined salary and pensions means he will make $88,000 MORE than he earned last year as mayor and state senator. He also has amassed $988,000 in Essex County’s 401(k) benefits plan (somehow accomplishing that feat during a 20-year leave of absence).

The Star-Ledger was only able to obtain the pension data after it became necessary to file a lawsuit against the city of Newark to demand this data under the Open Public Records Act.

Most Newark city employees elected to abandon the Newark pension system in favor of the state’s Public Employees Retirement System, which provides more lucrative benefits. Only 42 employees remain in that system, including Sharpe James and former Council President Donald Bradley. Under the city pension system nonelected city employees can receive a maximum of $12,000 in pension monies. Back in 1981, then Assemblyman Richard Codey (yes, that Richard Codey) sponsored a bill that allowed cities with a population greater than 400,000 to set up a separate account in the pension system for elected officials, in which they receive two-thirds of their salary. What is most intriguing about that law is that according to the www.citypopulation.de web site, as of 2003 Newark only had a population of 277,000, which makes it the largest city in the state, but it obviously doesn’t meet the criteria for the two-thirds salary rule. But I guess that doesn’t faze the bureaucrats.

Subsequent to that 1981 law, in 1993, the City Council approved an ordinance that permitted elected officials (read James and Bradley) to use money that is set aside for unused expenses to be used in calculating salary, which in turn determines the amount of the pension. James had $25,000 in unused “expenses,” so his pension was calculated on an income of $186,981 instead of his base salary of $161,981.

L. Mason Neely, chairman of the pension study committee for the New Jersey League of Municipalities, said the amount of public money James is collecting should offend the average New Jersey taxpayer. He added, “It’s a great encouragement to confirm stereotypes that politicians work for themselves. It causes people to lose confidence in the system and results in distrust of public employees.”

07/15/06

Former Mayor of Newark, New Jersey will Pocket $323,654 Annually

Sharpe James, the 70-year old former mayor of Newark, New Jersey, has retired from his position after 36 years and started a new job as head of the Urban Issues Institute at Essex County College.

His annual income is now comprised of:

· An annual pension of $124,654 as the former mayor of Newark

· $49,000 salary as a state senator

· $150,000 salary as the head of the Urban Issues Institute.

The combined salary and pensions means he will make $88,000 MORE than he earned last year as mayor and state senator. He also has amassed $988,000 in Essex County’s 401(k) benefits plan (somehow accomplishing that feat during a 20-year leave of absence).

The Star-Ledger was only able to obtain the pension data after it became necessary to file a lawsuit against the city of Newark to demand this data under the Open Public Records Act.

Most Newark city employees elected to abandon the Newark pension system in favor of the state’s Public Employees Retirement System, which provides more lucrative benefits. Only 42 employees remain in that system, including Sharpe James and former Council President Donald Bradley. Under the city pension system nonelected city employees can receive a maximum of $12,000 in pension monies. Back in 1981, then Assemblyman Richard Codey (yes, that Richard Codey) sponsored a bill that allowed cities with a population greater than 400,000 to set up a separate account in the pension system for elected officials, in which they receive two-thirds of their salary. What is most intriguing about that law is that according to the www.citypopulation.de web site, as of 2003 Newark only had a population of 277,000, which makes it the largest city in the state, but it obviously doesn’t meet the criteria for the two-thirds salary rule. But I guess that doesn’t faze the bureaucrats.

Subsequent to that 1981 law, in 1993 the City Council approved an ordinance that permitted elected officials (read James and Bradley) to use money that is set aside for unused expenses to be used in calculating salary, which in turn determines the amount of the pension. James had $25,000 in unused “expenses,” so his pension was calculated on an income of $186,981 instead of his base salary of $161,981.

L. Mason Neely, chairman of the pension study committee for the New Jersey League of Municipalities, said the amount of public money James is collecting should offend the average New Jersey taxpayer. He added, “It’s a great encouragement to confirm stereotypes that politicians work for themselves. It causes people to lose confidence in the system and results in distrust of public employees.”

07/15/06

Retired Newark Officials Collect $658,187 in Unused Sick Days

In addition to the king’s ransom that Sharpe James must squeeze by on, when he retired along with 20 other officials, they collected $658,187 in unused sick days, a practice that is unheard of in the private sector.

The bevy of former administrators received nice fat checks at taxpayer expense including:

· Former Fire Director Lowell Jones received $84,973

· Former Police Director Anthony Ambrose received $83,148

· Former Police Chief Irving Bradley received $73,464

· Former Deputy Police Director Rocco Malanga received $71,102.

· Former Mayor Sharpe James received $36,547.

To add insult to injury, Gerald Dorf, a New Jersey labor lawyer, pointed out that the sick day compensation is handed out at today’s salary rates, and not at the salary the individual made at the time the sick days were accrued. So the city or municipality is paying two, three or even four times the value of those sick days from 20. 25 or 30 years ago.

Well, we can be assured of one undeniable fact. Sharpe James won’t be applying for food stamp assistance anytime soon.

07/15/06

5,000 New Jersey Public Employees Hold Multiple Jobs

Senator William Gormley (Republican, Atlantic) requested that the state Division of Pensions and Benefits provide a list of all New Jersey public employees who hold two or more taxpayer-funded jobs.

Frederick Beaver, the division director, provided that startling report. In total, 4,731 members of the Public Employees Retirement System hold multiple jobs, while 213 of the pension fund for teachers hold multiple jobs. Common examples are attorneys, tax assessors, building inspectors or health officials – not low-paying jobs.

One judge, Glouchester County lawyer Jere Powell, who holds 11 different positions, and will earn $186,404 this year, enough to qualify her for a pension of $74,000 when she retires. Wow! She must work 25 hours a day. Another lawyer, Damian Murray, serves as a municipal judge in Lacey Township, Dover Township, Seaside Heights, and five other communities, for which he’s paid $287,000. His eight salaries would qualify him for more that $135,000 annual retirement. Edward L. Kerwin, as assessor, will earn $255,956 in assorted salaries, while parking expert (parking expert?) Leonard T. Bier will make a combined $204,000 from posts with Middlesex County and four North Jersey parking authorities. The top 25 pension earners on the list will make more than the salary authorized for the governor.

Now on one hand, we need not be overly concerned as someone has to fill the jobs, assuming that the jobs are simply not political appointees who are pigging out at the public trough. But on the other hand (and more importantly), the salaries from those multiple jobs are used to calculate retirement pay.

Under the abusive government system anyone making over $1,500 per year is entitled to a pension provided that they serve for at least 25 years. Newspapers have been filled with stories about normally highly paid public employees who work part-time for a pittance for 22 years, and then manage to finagle a lucrative full-time position for at least 3 years, simply because pensions are based on the highest three years of salary.

09/15/06

Extra Pension Benefits Denied by Pension Board

Before New Jersey Attorney General Peter Harvey exited from his office, he naturally decided to give our dedicated public servants a bonus from the taxpayers. Harvey issued a directive that allowed about 30 employees to get enhanced benefits, by upgrading their pension status to that normally reserved for prosecutors. Later that year Harvey expanded eligibility to all employees in the Division of Criminal Justice who were assigned to certain crime-fighting units or who had been detached from Criminal Justice to work elsewhere.

During Zulima Farber’s short stint as Attorney General, wherein she offered an opinion that Harvey’s directive was “inconsistent with the clear and unambiguous eligibility requirements” detailed in the statute.

The Public Employees Retirement System board ordered a review of those retirement benefits, after they had ruled to deny the extra benefits to Thomas O’Reilly, the long-time administrator of the Attorney General’s Office. The denial means O’Reilly, who retired after 33 years, will receive $71,500 per year instead of the $84,600 permitted under Harvey’s directive.

It may seem to be a pittance – the difference of about $13,000 – but wouldn’t we all be very happy to retire on $6,000 per month.

01/15/07

New Jersey Property Taxes Increase 6.8 Percent

With the governor and legislature unable to find any workable solution to reduce property taxes, simply because spending cuts are not on the table, property tax bills to residents increased by $1.4 billion or 6.8 percent. The largest increase prior to 2006 was $1.2 billion in 2003. Are we supposed to be surprised?

Local government agencies hit landowners with a $20.9 billion levy in 2006, of which $15.4 billion was billed to homeowners. The average residential tax bill is now an astounding $6,170 – an increase of $390 (see article below).

In 2000, only 6 communities had an average property tax bill over $10,000. Now 55 communities share that dishonor.

The average annual tax increase has ballooned between 6 and 7 percent for five years today, almost double the rate of inflation. Jerry Cantrell of the Tax Reform Group said, “Our government continues to spend at rates outpacing the private sector and the nation as a whole while private sector salaries are remaining relatively flat.”

Some of the property tax statistics are frightening:

· 270,000 homeowners now pay more than $10,000 a year in property taxes.

· Milburn homeowners pay an average of $16,511.

· Among the 25 highest taxed municipalities, 16 are in Bergen and Sussex counties with taxes of about $8,300. South Jersey residents get off relatively scot free with bills of about $3,000.

New Mexico

New York

01/01/06

Transit Strike in New York City Underlies Critical Pension Issues

Most people are not aware that the transit strike that lasted 60 hours in New York City in December 2005 was a fight between the 33,700 bus and subway workers and the Metropolitan Transit Authority (MTA) over pension issues. The MTA was trying to wring concessions from the union, Local 100 of the Transport Workers Union, to either increase the retirement age for future employees or the amount they contribute to finance their pensions. The MTA was alarmed that the pension costs for the workers has tripled in just 3 years to $453 million this year. The situation is potentially so catastrophic that Mayor Bloomberg called the transit workers greedy, and said, “I don’t want to pay more taxes and I don’t get these kinds of benefits. You have no idea how many e-mails I got saying “I don’t make that kind of money. I don’t have those kinds of pension benefits. Why are people striking.’”

According to the New York Times, although the striking workers ended their walkout and returned to their trains and buses, the issue is far from being resolved. Note that the MTA was not proposing to take any bread from the mouths of existing workers; the change only affects future employees. As the battle continued, it appeared that the MTA would be forced to take some of their pension demands off the table. At the end of December, the executive board of the union agreed that workers would pay 1.5 percent of their salaries towards healthcare premiums. The settlement calls for raises of 3 percent in the deal's first year, 4 percent in the second year and 3.5 percent in the third year. The subway and bus workers' current base pay averages $47,000 a year, and with overtime, their average yearly earnings total $55,000. Not bad work if you can get it. Let us not forget that in this quagmire, their current or future pensions were not touched by the settlement.

George Perlstein, a subway road-car inspector and the sole board member who abstained from the agreement, said the healthcare contribution would set a precedent for further increases. "The health care contribution is going to be absolutely disastrous in the future," he said. "Instead of holding our ground, we're acquiescing to the anti-labor ideology of Bloomberg, Pataki and the Republican agenda." It most surely sounds like Mayor Bloomberg was correct in calling the union “greedy.” He should have asked if Perlstein’s quote was lifted from the Communist Manifesto.

Many officials and fiscal experts assert that across the nation government pension plans face a shortfall of hundreds of billion of dollars. From New Jersey to California, government officials say that attempts – either through contract battles, legislation or public referendums – to limit the amount of money that states and cities contribute to pension plans are inevitable and long overdue.

E. J. McMahon, a budget expert at the Manhattan Institute, said, “Every level of government in New York City, New York State and in states across the country face large and growing pension obligations. If nothing is done to bring pensions under control, all the other headaches that state governments will be facing in the next 20 years on needs like education and health will be enormously worse.”

Some of the critical pension issues that confront the nation are:

· Many courts have sided with government unions whenever proposals have been advanced to cut pensions for current public employees. The courts have ruled that cutting pensions for these workers violates the Constitution, which prohibits governments from breaching contracts. As a result, taxpayers must pay for full pensions promised to government employees.

· New Jersey faces a $25 billion shortfall in its pension obligations, although significant changes have been proposed to lessen the burden.

· New York City’s annual pension outlays are expected to jump to nearly $5 billion by 2008, more than double the outlay in 2004.

· Governor Arnold Schwarzenegger of California was almost tarred and feathered when he proposed replacing the traditional pension plan with a 401(k)-like plan that is less generous, even though many police officers retire with pensions equal to 90 percent of their annual earnings.

· San Diego’s $1.4 billion pension shortfall and related scandals nearly bankrupted the city, both morally and financially.

· Large American corporations, like Bethlehem Steel, United Airlines and other companies have stopped paying into pension plans, forcing the government to step in and absorb billions of dollars in costs via the Pension Benefit Guarantee Corporation (PBGC).

· Other companies, like Hewlett-Packard, have replaced their traditional pension plans with 401(k) plans.

· Verizon Communication, obviously feeling the sting of expensive pension benefits for it’s employees, has elected to end contributions to pension plans for about 55,000 managers, a move they claim will save the company $3 billion over 10 years.

Buried amidst the ravings of the unions is the fact that most of these public-sector employees retire at the age of 55 or after 25 years of service. This is virtually unheard of in the private sector. And on top of that, with the average American living to the ripe old age of 75+, these public workers can have a second career of 25 years elsewhere and retire again after another 25 years living their lives in grand style.

The painful truth is that 90 percent of public-sector employees have traditional benefit plans – known as defined-benefit plans because retirees receive a defined amount each month – while just 20 percent of private-sector workers have this type of plan, a sharp drop from 1960 when 40 percent of private-sector workers were enrolled. One of the reasons for the wide disparity is because 36.4 percent of government employees belong to a union while only 7.9 percent of private-sector workers do.

Of course, we can’t escape the classic liberal analysis of the problem. Gerald McEntee of the American Federation of State and Municipal Employees, which represents 1.4 million government workers, added his two cents by saying, “A lot of people are exaggerating the problem. Right-wing think tanks and conservative Republicans want to do away with traditional pension plans and replace them with much cheaper 401(k)’s at the same time they want to give all these tax cuts to the rich.” So people are exaggerating the problem? What planet have you been living on? So how do you propose we solve the problem, Gerald – increase taxes, no doubt?

If we can’t get government employees to accept a small dose of reality and back off of their exorbitant pension demands, then the solution is simple. Clean house and fire 10 percent of all workers – they won’t be missed.

05/15/06

Pension Abuses Continue Unabated

Because of the way in which public pensions are calculated in the tax-mad east coast states, many public servants are able to retire on pensions fit for a king at taxpayer’s expense. These public servants are not breaking the law; they are simply manipulating the system to their benefit.

The Star-Ledger ran a series of articles after they investigated the top 25 New York state pension recipients. The President and CEO of the Westchester Health Care Corp. (public corporation) made $389,700 and retired on a pension of $221,603. At the bottom of the ladder, a Police Lieutenant for the Port Authority of New York and New Jersey made $101,260 and retired on $153,712. Another sergeant with the Port Authority made $88,048 and retired on $160,032. More than 100 officers who retired since 9/11 have walked away with pensions between $95,000 and $172,000. “How can this be possible,” we all ask? Port Authority officials claim this is all a byproduct of the enormous amount of overtime that has been required since 9/11, mandating that officer’s work 60 and 72-hour weeks. But regardless of the number of hours of overtime worked, the fault lies in the fact that pensions are calculated on the three highest years of income (including overtime), a practice laughed at in private industry. And let us not forget that these people retire after 20-25 years, a bonus that most of us can only dream about.

Charles Fay, chairman of Rutgers University’s human resources management department, said, “No private sector company would ever do that and not all state systems do.” Fay said it was likely that certain agencies allowed the use of overtime in calculating pensions as an inducement because wages were low many years ago. “It clearly has run amok,” and “It’s unfortunate because the Port Authority guys have done a tremendous job in dealing with 9/11. I just don’t think it’s right for the system to be dealing this way.”

George Passantino, a senior fellow at the Reason Foundation, said, “It’s absolutely staggering. It’s a fiscal train wreck. I perceive the greatest threat to the taxpayers are these bills coming due soon.”

Port Authority payments to the New York State retirement system have ballooned nearly tenfold in the recent years. Assemblyman Michael Carroll (Republican, Morris) wants all government pensions transferred to 401(k) programs.

07/15/06

New York City Reports Potentially Catastrophic Pension Status

Since 1999, New York City has reported that has all the money it needs to pay for the pensions of city workers. There’s only one little problem. The funds committed may fall well short of the city’s promise to hundreds of thousands of current and retired workers. The city has been using an unusual pension calculation that does not comply with accepted government accounting rules. If private industry did this, the corporate officers would be roasted on a spit.

The city’s chief actuary, Robert C. North, says the numbers are “meaningless” when it comes to showing the plan’s financial health. He has prepared a set of alternative calculations showing that the “real world” gap in the pension funds could be as high as $49 billion. This is nearly as high as the city’s annual budget and the equivalent of the city’s publicly disclosed debt.

Now this doesn’t mean that the city will quickly run out of money, but it does mean the city is promising benefits to its current employees it might not be able to provide without substantial tax increases or major budget cuts, and we all know how the money will be found.

The city’s required contributions to the pension fund have quadrupled in just five years from $1.1 billion in 2001 to $4.7 billion this year. New York is certainly not alone in wrestling with pension burdens.

Outside experts say the city’s accounting methods are flawed because it provides a misleading picture of the plan’s actual condition. No other large city or state plan uses this method.

Martha Stark, the New York City finance commissioner said, “The city’s pension funds are 99.9 percent funded by acceptable methods for evaluating and disclosing pension fund assets and liabilities.” Even New York City’s independent auditors defended its unusual approach. But New York City’s Comptroller, who has ultimate responsibility for the city’s financial statements, said that the pension calculations were “the subject of much debate.”

The State Legislature must approve all increases in public employee’s pensions, as legislators have granted billions of dollars of new benefits, often over the city’s objections. Legislators claim that that these new benefits were doled out based on an understanding that they represented no threat to the future generations of New Yorkers who must foot the bill.

New York City pensions are comparable to its neighboring state, New Jersey, wherein a teacher, age 55, with 30 years of service, can retire at $51,000. Police, after 20 years of service, can retire at $53,000. In recent years, city retirees were given cost-of-living increases, a benefit unheard of in the private sector, plus pension plan contributions were eliminated. New York City has also promised to pay for its retiree’s health care, but no one seems to know how much that will cost. Mayor Bloomberg estimates that it may cost $50 billion but estimates run as high as $100 billion that have not been formally reported. But the sheer size of its work force, with 180,000 municipal retirees and a quarter-million current employees, makes it a useful harbinger of the coming financial storm for local, state and federal governments.

North Carolina

North Dakota

Ohio

Oklahoma

Oregon

Pennsylvania

Rhode Island

South Carolina

South Dakota

Tennessee

Texas

Utah

Vermont

Virginia

Washington

01/01/06

Convicted Deputy Retires on Comfortable Pension

According to the Seattle Post-Intelligencer, veteran deputy Pat Covey retired after 26 years on the force even though there were numerous complaints in his file, lawsuits and above all, a conviction for criminal trespass in a domestic-violence case. Sheriff Dave Reichert did not act on department recommendations to fire the man. He was even able to keep a state license to work as a cop although he’s not permitted to carry a gun. Another department commander sent a document to the state police falsely stating that the Sheriff’s office knew of no detrimental conduct or convictions that would prevent his licensing.

Covey and a number of other deputies were investigated by the Seattle Post-Intelligencer for their favorable treatment by the power structure. These men had charges of “conduct unbecoming,” repeated violations, criminal misconduct and outright convictions and still were recommended for retirement by their supervisors. Codey managed to bury a 1995 complaint of domestic violence and vandalism, the beating of a handcuffed arrestee, repeated harassment of his wife and her relatives using his police powers and his role in the firing of a whistle-blower.

The sheriff’s office was well aware of his conviction for criminal trespass just one month prior to his retirement in 2004, but I guess the cops take care of their own, no matter how egregious the man’s actions may have been, for after all it’s only taxpayer money.

West Virginia

Wisconsin

Wyoming

Washington, D.C.

Federal

05/01/06

Federal Workers Grossly Overpaid

According to the Cato Institute (http://www.cato.org/), a conservative think tank, the 1.9 million civilian workers in the executive branch of government cost the taxpayers over $200 billion a year. Hopefully putting to rest once and for all the claim by politicians that federal workers should get greater benefits as they make less than their private-sector counterparts, the astounding results of a study commissioned by the Cato Institute revealed the following conclusions:

· The average federal worker earned $100,178 in wages and benefits while the average private-sector worker earned $51,176 in wages and benefits. In 2004, the average federal civilian employees made 93 percent more than his private-sector counterpart.

· Examining wages alone, the average federal worker made $66,558, 66 percent more than the average private sector-worker with $42,635 in earnings

· Since 1990, average compensation has increased 115 percent for federal employment as opposed to 69 percent in the private sector. Federal wages have increased 104 percent while private-sector wages have increased by 65 percent

· Increases in federal compensation have stemmed from general wage increases, increased locality pay, expansions in benefits, changes in the nature of federal work, growth in the number of high-paid jobs, and other factors

· Federal workers are secure and highly-paid while private-sector workers must compete in a dynamic often turbulent economy

· Federal studies (naturally) have concluded that government workers are underpaid while academic studies have concluded that federal workers are overpaid.

· The federal government offers benefits rarely found in the private-sector including health benefits, retirement health benefits, a pension plan with inflation protection, and a retirement plan with a very generous match. Other benefits include flexible working hours, training options, incentive awards, excessive disability benefits, and flexible spending accounts, union protections and a much more relaxed work environment rarely reflecting the stress of private employment.

One of the most significant factors is the extreme job security, which borders on insanity under civil service regulations. The rate of “involuntary separations” in the federal government is one-fourth that of the private sector. Only 1 in 5000 federal non-defense workers is fired each year for poor performance (see “Why We Need to Passionately Fight to Resist More Government Programs” below to explain why)