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Taxpayers to pay $100G pension of county employee

Joye Brown: April 24, 2008

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The conversation with state pension system specialist E.J. McMahon, director of the Empire Center for New York State Policy (a conservative think tank), about Nassau's Karl Kampe went something like this yesterday:

Me: So there's this guy in Nassau County who retired one day and went back to the exact same job the next da ...

McMahon: What's his pension?

Me: They say they don't know for sure, yet.

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McMahon: What's his salary?

Me: Umm, he was making $150,000 on the day he retired. And $140,000 on the day he came back ...

McMahon: What!? Why the high salary?

Me: Oh, the usual. He's got skills, can't be replaced, blah, blah, blah ...

McMahon: And he's going to be collecting a pension ...

Me: Yeah, but the county says it's actually saving money because it won't have to find and train someone new.

McMahon: They're saying it's cheaper?

Me: Oh yeah, they always say it's cheaper.

Neither of us buys that "cheaper" stuff. And neither should anyone else. The employee in question could pull down a pension of up to $100,000 a year, guaranteed by state taxpayers, for the rest of his life.

Ah, what a sweet deal, because that $100,000 will come free of payroll and state income taxes - which means it's more like $110,000 a year, guaranteed, for the rest of his life.

On top of his taxpayer-supported salary. And taxpayer-supported health benefits.

McMahon: Let's assume he was indispensable ...

Me: Uh-huh.

McMahon: ... which I don't assume ...

Me: Uh-huh.

McMahon: ... If they really were interested in saving taxpayer money, they would pay him the difference between his adjusted pension and the original salary - $40,000. That would save $100,000. And if he didn't want it, they'd wish him off to a happy retirement ...

Me: But that never happens ...

McMahon: Sounds to me like the guy just got a $100,000 raise ...

Me: Yup ...

McMahon: He knows it. And the people who gave it to him know it, too.

The New York State pension system is begging for reform. And it won't come with a tweak here or there. Not with the continuing saga of contract lawyers collecting state pensions, although they weren't employees.

Holy gas pump, college tuition and rising health-care co-payments, I'm thinking, a state pension could come in handy.

McMahon: The state pension system is like a magnet for morality, it pulls it away, it becomes acceptable for people to game the system.

Me: Uh-oh.

McMahon: The solution is to get rid of the system, and replace it with one where every future employee gets an excellent 401(k) program that's well managed and well funded.

Me: Who's going to do that?

McMahon: That's the kind of thinking that guarantees nothing gets done.

Me: Right, so let me rephrase the question: What's the best way to get something done, to stop the abuses?

McMahon: We're going nowhere until leading politicians, including your two county executives and the governor, stand up; that's the only way the ball start's rolling.

All right, everybody.

Push.