Sunday, August 20, 2006

More on city pensions

The Sunday New York Times has another article in their series on public sector pensions, mostly focusing on NYC though. There is a paragraph in the article that is really telling:
On their face, New York City’s pensions do not look particularly extravagant. As an example, a teacher retiring at age 55, after 30 years of service, could expect to receive a pension of about $51,000 a year today. The New York City police, who are compensated extra for the risks they face on the job, can retire after 20 years, at any age, with pensions of about $53,000 a year.
So somebody considers teachers and police in New York City getting pensions of well over $4K per month as not being extravagent yet you hear some who say public sector pensions in Pittsburgh are too high. I pointed out in an earlier post that current general municipal pensioners in the city of Pittsburgh receive an average of $800 per month. Is that really an unjustified amount? I think sometimes people confuse info from other places and just assume we have the same issues here. I don't care what the differences are in the cost of living between the two regions... it's just not possible to lay the blame of Pittsburgh's underfunded pension liability on its payout rates.

Yet even at these much higher payout rates, the City of New York's pension plans are in relatively better financial shape than Pittsburgh's. The pessimistic version discussed in the NYT piece still pegs their pension funding at over 60% of their expected payouts, that isn't good but it is far ahead of the ~40% for Pittsburgh's plans.. why the difference? There have been much more appropriate contributions (relatively of course) made into the NYC pension plans over the decades. Underfunding of the city's pension system is now the core problem in the city's current fiscal miasma.

1 Comments:

Blogger O said...

Does this mean that I'm not going to retire with a $1M golden parachute?

Dang!

Tuesday, August 22, 2006 10:31:00 PM  

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