Pension Reforms Un-Ravel?
Jerry Brown has done some good work as California’s governor. When he promised to take on the common practice of pension double-dipping, he spotted a problem and appeared to be on the right track.
But if you want to hire well-connected, experienced and (therefore, or presumably, competent) civil servants to help you in your crusade to save your state, what do you do?
Why, you hire retired civil servants. They each get their salaries — plus their pensions.
There may be something faulty in the above rationale. But that’s what happened.
Shane Goldmacher and Patrick McGreevy of the Los Angeles Times showed just how big this problem is, in a current exposé. They lead with the facts in the case of Ann Ravel, who “gets a paycheck from her salary as chairwoman of California’s ethics watchdog agency and a second, bigger check from her public pension as a retiree.” She makes a good living, since the two sources of income “total more than $305,000 a year.”
This is not a good policy. Marcia Fritz, president of California Foundation for Fiscal Responsibility, says such double dipping “violates the whole premise of having a retirement program.”
I see her point.
Still, it wouldn’t be an issue if pensioners received retirement payments not in amounts promised by politicians and guaranteed by taxpayers, but instead coming from actual investments — defined contributions, not defined benefits — in something like each one’s individual 401(k).
This is Common Sense. I’m Paul Jacob.