What early retirement of public employees costs the public: triple the price for half the service

A couple of weeks ago, THC had some spirited discussion about the effect that Larry Oetker’s hiring at the Harbor District will have on public finances, and in general what the practice of allowing public employees to collect their pensions for 30+ years. Often, those same “retirees” are continuing to work full or part-time for another organization, public or private.

Read that here:

Larry Oetker takes over as Harbor District Director, collects salary and retirement at the same time.

This post will be much of the same – but with numbers!

See, we figure it like this.

Say Former Public Employee #1 goes to work for a CalPERS agency, making $110,000 per year – not including benefits – and “retires” at age 52 with 85% of his average annual pay over 3 years.

That puts FPE1 at $93,500 annually.

Now, we hire FPE2 for the same position at $110,000 (even though in the real world he’d probably be making more). Meanwhile, FPE1 goes and gets another job with a public agency – CalPERS halftime at 960 hours for $55,000 per year.

That means we’re paying:

(FPE1: $93,500a) + (FPE2: $110,00) + (FPE1b: $55,000) = $258,500.

$258,500 being paid by the public for one position that could continue to be filled for $110,000?

But it gets worse. Let’s say FPE1 finally really retires, 13 years later at 65. But, oh crap, FPE2 now feels like “retiring” at 52 also! That’ two pensions worth $93,500! Plus the $55,000 that FPE2 will make at their half-time job, plus the cost of hiring a new employee to fill the original position, and now we’re looking at this:

(FPE1: $93,500)+(FPE2a: $93,500)+(FPE2b:$55,000)+(FPE3: $110,000) = $352,000.

And that’s all per year, for a position that could be costing us only one pension and one salary.

In all, the public would be paying FPE1 $1,215,500 for the 13 year “retired” period, when he was working elsewhere.

That’s right – these public pensions make former employees worth millions. But more on that another time.

It’s important to note here that the main issue is this: if FPE1  had to wait to collect their pension til 65 or something in order to collect our pension, then we wouldn’t have the problem. And we wouldn’t be shelling out $93,500 a year for a “retired” person who still has at least a decade, if not two, of years when they will continue to work and earn money from a different job, when they could still be performing the first.

The drain on public finances wouldn’t be magnified by having to hire one or two more people to fill the same job that FPE1 retires from through their lifetime.

We feel the need to clarify that we originally complained about retirees double-dipping by taking jobs at other public agencies, but as we thought more about it (and read comments from one David Tyson, former Eureka City Manager), we changed our minds.

It pisses us off that anyone is out there making excellent money after “retiring” from public service, while the public is often on the hook for double or triple the amount it should cost to fill their former position. (See all those numbers, above.)

Oh, we don’t know, maybe the answer is to tie the age that public pensioners can begin collecting their pensions to the same year that folks on social security can. That seems fair, no?

This way we’d ensure that the public is still actually getting tangible production from the money that we’re spending on pensions and payrolls, and would remove the incentive for people to bail on working for the public

Oh, p.s., you can totally search for pension amounts on TransparentCalifornia.com for the annual pension payouts for many agencies or individuals in California. That includes former City Managers of Eureka.

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2 Responses to What early retirement of public employees costs the public: triple the price for half the service

  1. MeeBee says:

    As I recall Mr. Tyson was indignant that someone questioned his continuing to work after “retiring” from the City of Eureka. What garbage to pull abpension of $140,000+ while continuing to work for another entity. Need I remind taxpayers that they are paying for this? CalPERS “retirement” under the existing rules is the equivalent of a lifetime severance pay. Why not implement the same rules as Social Security, or many labor unions that do not allow early retirement and unlimited earnings while drawing a FULL PENSION?

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  2. Michelle Steele says:

    This is why our system is broke and currupted. To many Greedy people who don’t give a Rats Ass for anyone but themselves. Greed may buy them Luxury things now but anything could happen then all the money is gone, then what are they going to do? Work another 52 years to build there wealth back up? Shoot thats more then anyone makes at a regular minium wage job. No wonder there is so much poverty and homeless people in our society then you got the Senior Citizens who have to get by on an average of $24.00 a day which equals to about $850.00 per month they have to live on and can not make it.. I say if our County, Goverment and State officials can live like this, then everyone should get the same pay as these greedy Morons Do plain and simple.

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