THC talks a lot about the looming disaster presented by the nature of the pensions the County gives to its employees. Of course, we’re not the only ones in California or the entire nation that are under the gun because of the ludicrously lucrative deals that public employees get for retiring after a long career of barely working.
Turns out that Dallas, Texas, is paying for the crappy pension system sooner rather than later. Or, to be more specific, not paying out. From this article in the Dallas News, we hear that the Mayor of Dallas filed a lawsuit to stop pensioners of the Dallas Police and Fire Fund from accessing their money.
In response, the Dallas Police and Fire Pensions Systems Fund’s Board of Trustee’s suspended lump-sum withdrawals from the fund to avert . Which means that even the Board of Trustees recognized and acknowledged that the current pension plan was unsustainable – THC just wishes that more public entities, and the unions that conspire to create such garish pension plans, would recognize that as well.
Now, of course, this clusterf*** can’t be blamed entirely on the bogus pension system. The Mayor of Dallas, as noted in the article, filed a restraining order on withdrawals from the fund for the Dallas Police and Fire Pension Systems Fund to stave a total financial collapse of the fund – and people understandably panicked and tried to withdraw as much of their pension’s worth as possible.
Overall, the article is an interesting read. Here it is again: Dallas Police and Fire Pension Board ends run on the bank, stops $154M in withdrawals
But there are two more important over-arching issues that THC feels really underscore the dangers of the pension system and how desperately we need reform.
One of those is the Deferred Retirement Option Plan, or DROP. From the article:
“Kingston said the tough decision [to stop lump-sum withdrawals] will be worth it if it means the pension, which is hurtling toward insolvency within the next decade or so, can be saved.
On Wednesday, the city officially unveiled its plan to save the fund. The biggest target was the lump-sum program officially called the Deferred Retirement Option Plan, or DROP.
That plan, originally intended as a retention perk for veterans, made hundreds of officers, firefighters and retirees into millionaires. DROP allowed them to retire on paper, continue working and meanwhile defer their pension benefit checks into a separate account. Once they actually retired, they could remain in DROP and continue deferring their checks.”
Does the part of the article which says officers, firefighters, and retirees have been made into millionaires sound familiar?
As we have pointed out once or twice before, pension plans are making millionaires of public sector retirees. It’s difficult to find anyone in the private sector with an equivalent salary to a public employee that has a pension plan worth literally millions – the amount needed to sustain a fund capable of carrying the high-value of the payouts for individuals on public pension.
Now, the second important thing to pull from the Dallas News article as it relates to Humboldt’s problems is this: the Pension Board requested a $1.1 billion tax-payer bailout to save the fund and ensure that pensioners continued to receive their checks. Also note that this pension is only for one small part of Dallas’ public retiree force – and it supposedly requires over a billion dollars alone to stave off collapse.
Aside from massive and comprehensive pension reform, that’s exactly what will come to pass for Humboldt-ians and Californians. The people who will end up getting screwed the most are tax payers, because we will be saddled with bailing out the governments that continue to dole out ludicrous pension plans for their employees, and we’ll also be the ones footing the bill for retirees to live the good, good life promised to them.
On a brighter note, turns out that Humboldt County might not have the stupidest people in the world in charge of our public pensions – that award might go to Dallas.