In a recent smorgasbord post, I railed a bit about an upcoming increase in my monthly commutation (via the MTA), the third in as many years.  As I let off some steam with a friend — who happens to be a NY Times reporter — he turned me on to one of the more eye-opening sites I’ve seen in a very long time:  SeeThroughNY, which I mentioned to BR and he just introduced here.  This site is a remarkable repository of data detailing exactly where New Yorkers’ tax dollars are going, right down to the individual salaries of politicians, school administrators and teachers, law enforcement personnel and scores of other civil servants and public employees.  It also opens the kimono on contracts with vendors, as well as allowing for side-by-side comparisons, or “benchmarking,” of towns, villages, school districts, and counties.  I’ve barely begun to scratch the surface of what the site has to offer.  (Whether or not you’re a New Yorker, I’d be interested in reading about how those so inclined use the data; feel free to throw it in comments).

Let’s stipulate that there are many moving parts in the machinery that produces public policy toward civil service (and its attendant compensation).  That said, NY State Attorney General Andrew Cuomo released a preliminary report in July that addresses one ongoing concern:  “pension padding” (the manipulation of salary and overtime payments near retirement), which falls into two broad categories:

1. Employees start working substantial overtime only when they near retirement.
2. Employees substantially increase their overtime near retirement

This occurs due to the fact that employees’ pension benefits are pegged to their compensation in their last three years of work.

Between the Metropolitan Transit Authority and the Port Authority of NY/NJ, for example, there are 75 police officers who earned in excess of $150,000 in 2009, a few in excess of $200k.  (By way of comparison, if you were a $30,000/year police recruit in 1980 and got highly unlikely 5% annual increases, you’d now be at about $130,000/year).  My sole purpose in using police officers as an example is that I believe most of us would agree that the numbers I’ve cited are not what we’d generally expect to see for this profession; we all have some frame of reference for what law enforcement personnel “should” make.  I might just as easily have used railroad engineers or conductors, but I suspect our collective frame of reference isn’t as clear on those occupations.  So please spare me the vitriol that I’m somehow disrespecting law enforcement.  I’m not.  I have the utmost respect for the fact that they put their lives on the line every day.  I’m merely pointing out that $150k+ is probably a bit north of what most of us believe police officers earn, or should.  YMMV.

Here are two charts that highlights the issue (click through for larger):

Source: NYS Office of the Attorney General, NYPensionpadding.com

While I understand, generally, that retirement benefits are to be calculated off the last three years’ compensation, I do not understand why “padding” is allowed to occur.  Why is someone who never worked an hour of overtime in a 25-year career allowed to suddenly work 1,000 overtime hours in each of his/her last three years?  WTF?  Where is the oversight here?

Let me be clear: I begrudge no one an honest day’s pay for an honest day’s work.  And I begrudge no one a comfortable retirement.  But it is indisputable that “pension padding” contributes — in some unquantifiable amount — to public entities’ ongoing budget woes and subsequent need to continue squeezing the taxpayer (i.e. MTA’s three hikes in three years).  This is an issue that could — and should — be better managed and controlled.

Category: Politics, Taxes and Policy, Think Tank

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

6 Responses to “Transparent Government: NY, Part II”

  1. [...] = ";;"; // var __halnet_zone = "ROS"; « Your Vote, Your Corporate Welfare Electives Transparent Government: NY, Part II [...]

  2. Todd says:

    If it’s like most municipalities around. There are the accrued but never used sick time, and over time worked on holidays that have not been paid out. You can cash out when you retire and it’s cashed out at current hourly rate and not the hourly rate that it was accumulated under. It also has the added bonus of padding your retirement payout due to the three year calculation.

    So what your really looking at is 25 years of not calling in sick , working holidays and taking your regular pay and not taking the double time. Maybe government needs to adopt the use it or lose it policy that private business took on years ago.

  3. econimonium says:

    My father was an administrator in a school department, not in NY but in the Northeast. It pretty much works the same everywhere so I’ll tell you what he got:

    80% of his pay based on his last three years of service.
    He got the highest position possible as he neared retirement age. It didn’t matter about qualifications (he was qualified) but it was always practice to make sure a guy retired at the top of wherever he was.
    He accrued LOTS of sick time. Let’s put it this way, the City capped the amount of lump sum distribution one could take upon retirement. So what was common practice was to become “sick” for however long was necessary before retirement. For my dad, that was nearly ONE YEAR. So he was out on a doctor’s leave for about 11 months prior to his “official” retirement date. Then he took the rest (4 months I believe) as a lump sum.
    He was salaried, so OT didn’t come into play. But I know for a fact that OT went first to people getting ready to retire so they could fatten the calculation of their benefits. That’s for all muni employees.

    Now, given all of that, there are ways to take your retirement also. You can take the highest monthly payout (which means if you die, your spouse gets nada), or plan 2 where your spouse gets something but it is limited, or plan 3 (the lowest payout) where your spouse keeps getting the same after you die.

    Also remember that these employees CANNOT get SS benefits, or if they do they are DRASTICALLY reduced, even if they qualified by working prior to their municipal stint. They can get Medicare because they keep paying that portion but not Social Security (my mom gets like 80 a month out of which her Medicare deduction is taken even though she worked her quarters prior to teaching). This was the “double dipping” law.

    And, btw, that OT is subject to pension contributions. One also has to remember that people like my dad were SEVERELY underpaid for years when they went into a public sector job. Probably not as true now, but at the time he did, it was a pretty big pay cut.

  4. Opir says:

    Is there a strong /economic/ argument for the concept of “age-baased retirement”? Would we be better off doing away with the concept as such, and instead having something like this:

    “Get rid of age-based retirement altogether; base retirement solely on someone’s ability to work. If they are capable of working until 90, they should. If they are already ill/disabled/decrepit at 40, they should retire. Retirement security and disability systems would merge. A new Social Security system that is basically designed for those who just cannot work.”

    With a strong universal health care system (especially preventative care and “body part refreshes”), and a universal higher education and jobs program (both of which you can attend repeatedly if you need to re-educate or retrain, with length caps and audits to prevent abuse), we could keep a lot more people working a lot longer. All normal public AND private pension funds, save for the new Social Security system indicated above, would disappear. If absolutely needed we could add on more vacation time or shorter required hours for certain professions or industries, with the tradeoff being that many more people would work far longer than they traditionally have. Is there a strong economic reason to not do this? Or is it, as some may suspect, purely cultural?

  5. adamsdc says:

    I always amazes me that this information amazes most people. As someone who lives in Washington amidst hundreds of thousands of over-paid and under-worked bureaucrats, many in jobs that should not even exist, the US economy has hundreds of billions of dollars sucked out of productive efforts to support the ruling class. Public employee pension plans are underfunded by TRILLIONS of dollars if funding rules for private plans were to apply. And this support system does nothing but enable the politicians who have voted for this disease to be re-elected with my grandkids futures and place them into serfdom to support this fetid cabal.

  6. mikaeel says:

    I can personally speak specifically about New York Transit and generally about the New York City Pension fund. The pension law uses the term FINAL AVERAGE SALARY. The final average is often from the last three years, but actually uses the best three consecutive, in a five consecutive year window. No one year of the three can exceed any of the others by a given percentage.

    This means two things: One, it is really five years of over time to significantly boost a pension. And two, in the MTA pensions are often not based on the last three years. For instance, the MTA has laid off a number of station agents due to budget cuts. But for some reason, the remaining station agents are working crazy overtime to fill the void. If they continue with these types of layoffs, many station agents will have their best earning years in last year, this year and next year. Many are making 40% over their base salary. Even if they retire twenty years from now, they’ll never earn what they are earning now.

    In other words, some pensions were padded five to ten years before retirement. Also the MTA often demotes worker. People often get twenty thousand dollar pay cuts. And I do mean often. But here’s the thing. cut someone from 70k to 50k and they have lets say ten years to work for a total of 30 years. Even if he works no overtime his pension will be 42k almost what he was making while working.

    We can’t blame the workers, ’cause we’d all do it if given a chance. But what’s up with a management that sets it up so that workers pensions can be equal to or even sometimes greater than their base salary. Because when MOST transit workers are doing overtime they are actually driving a train or bus, so it’s not like they’re needed.