Borrowed Time

I am following this public pension fiasco emanating from Southern California, where the City of Bell has snuck in an $787,637 salary for its City Manager. He graciously "stepped down" Friday, but with CALPERS' fantastic arrangement of basing retirement pensions on the highest annual salary and assuming he lives as long as our actuarial tables say he'll live, he'll garner another $600,000 per year, or $20 million before leaving this third stone.

What's interesting to me is that this so-called economic slowdown has certainly taken its time reaching the public sector, hasn't it. Nowadays we're getting word of school janitors, mental health service providers, city mayors, state geologists, and social services directors coming under fire after a full two years of recession...all the while water districts, city governments, county governments, state governments, and the federal government are all drowning in borrowed monies.

Add another $20,000,000 to fund Bell's City Manager's retirement.

I'm covered under CALPERS, working for a municipal electric utility. Truthfully, it's a total racket, and I live under no illusion that this will be funded upon my retirement because I'm hardly the only one to which these "promises have been made." I fall under this 2@55 scheme, where I supposedly get an annual pension of 2% of my highest annual salary for every year I work, upon reaching retirement age 55. If my retirement date were today, that'd be about $40,000...in addition to whatever I've already managed to throw into my 401(k), 457, my own self-directed IRA, social security, and my WAPA federal retirement.

That, sir, is a gross amount, but not half as gross as the sorts of benefits conferred upon our baby boomer generation, all of whom needed to only work half as long to receive the same benefits...particularly medical benefits which for the past decade have risen at a double digit pace and which will rise at a double digit pace for decades more.

These sorts of public pensions are completely and totally unsustainable and are a direct, direct! cause for why cities and municipalities are drowning in debt, and man, if we haven't yet taken any real action at curbing these benefits. CALPERS is cheerily assuming a future 8% rate of return on their investments ad infinitium going forward to fund all this -- and if it ain't there, well guess what ratepayers and taxpayers!

I am one of the doomier types, always hoping thinking how things are going to get worse. I suppose that's a prudent thing to do. I don't pin my future economic hopes on a pension that may well be burned at the stake in the coming years, or pin my hopes on the value of my housal unit going up 20% per annum ad infinitium while I sustain my lifestyle through borrowed equity. Truthfully, the City of Bell did shit just like this. So has the State of California. I believe that the last casualty in this mild economy will be the public pensions of public employees. We'll soon find significant outsourcing of these jobs to one of the six people willing to work for every job available.