NCPA - National Center for Policy Analysis

States Expand Lucrative Pensions to More Jobs

December 16, 2011

As states tighten budgets and prepare to address massive deficits, special retirement benefits are constantly being extended to additional groups of workers.  While the exclusive packages were once reserved for police officers, firefighters and other public workers in dangerous areas, tens of thousands of state workers such as park rangers, dispatchers, coroners, even highway laborers, museum guards and lifeguards are being incorporated into the programs.  These packages contain privileges and benefits that far exceed traditional compensation, says USA Today.

  • The minimum age of retirement is usually substantially lower for those with special retirement plans.
  • The compensation package that retirees receive is a larger percentage of the beneficiary's working income and fewer years of service are necessary to qualify.
  • The additional cost per worker that is allowed to qualify for a special package is approximately $1 million over the course of the worker's retirement.

The budgetary impacts of this growing tendency can be seen in California.

  • The number of workers eligible for enhanced or early retirement jumped to 77,394 from 59,685 in 2000.
  • Simultaneously, the number of workers in regular retirement plans fell to 170,942 from 175,495, state records show.
  • State records also show that enhanced early retirement plans cost taxpayers $1.5 billion this year, up from $385 million in 2000.

Many former and current lawmakers discuss this situation and recognize the inability to sustain current trends.  As more workers are given special retirement packages, the burden of public worker pensions increases and states find themselves in an ever-growing pile of debt.

Many have also recognized the snowball effect of the highly distinguishable plans: as one group requests special privileges, it becomes increasingly difficult to withhold those benefits from another group.  While each state is free to supply or deny special benefits to classes of workers, the growing tendency suggests that more and more workers will be found to have "dangerous" positions that warrant exceptional retirement.

Source: Frank Thomas, "States Expand Lucrative Pensions to More Jobs," USA Today, December 10, 2011.

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