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Editorial: A few easy steps to fix pension mess

By   /   Monday, August 9th, 2010  /   Comments Off on Editorial: A few easy steps to fix pension mess

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As the region, along with the rest of the state, confronts a massive problem in funding public-sector pensions, the abuses in the city of Bell should sound a clarion call to make real reforms in a corrupt system.

The Ventura County Taxpayers Association reports that in the city of Ventura alone, some $3.1 million a year is being paid to 24 individuals. Four employees who retired in 2009 received annual pensions of $159,000 per year and $575,000 in unused vacation pay.

“The day is fast approaching, if not already here, when basic services and compensation for the rank and file will suffer so the city can pay extravagant compensation packages to managers,” the Taxpayers Association said in a recent news release.

We couldn’t think of a better way to put it. Our thoughts on pensions are fairly simple. Here is one way forward that would put a permanent end to abuse:

• Make transparency a priority. Putting pay and pension information up on the Internet for voters to see and to analyze will make a big difference in making elected officials accountable for the pension decisions they make. The first step to recovery is recognizing you have a problem and being open about discussing it.

• Put a cap on gross pension and vacation pay amounts.  Colorado and other states have simply limited the total amount anybody can collect to $150,000 plus future adjustments for inflation. That puts a floor on the total liability that a city or county can accumulate; and it limits a person’s ability to accumulate vacation pay to something reasonable, such as 240 hours.

• Eliminate pension-boosting title creep.  We’ve all seen examples where a person gets promoted to a senior post for their last year so they can collect a much higher pension. Using an average of the past seven years of pay will eliminate that practice. So will making it illegal to appoint somebody solely for the purpose of boosting their pension — unless they want to collect the money in jail.

• Set a delayed trigger for full benefits. There’s nothing wrong with forcing a public employee to wait until they are 62, 65 or 67 (soon to be the age for collecting full Social Security benefits) to collect their full amount. Except of course for cops and firefighters, whose jobs involve physical demands that often force them to retire earlier. 

One of the reasons why California is constantly back on its heels when it comes to cash is that these benefits are so generous, and put such a strain on investment funds, that the state has to pony up real cash to support its retirement system. Making the pension system once again self-sufficient will be a big first step on the road to recovery for the state budget.

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