It makes the job of County Supervisors and top managers easier if they have some advance notice that a high level manager is going to be retiring. How might top managers be induced to give such advance notice? How about a 5% pay boost if they will give a 12 month notice?
Trick is, such a pay boost also spikes the manager’s retirement for life. Public sector retirement pay is usually based upon the highest 3 years of wages, and in some cases just the highest 12 months. So, if a person can boost his or her pay in their last year their retirement pay will go up too.
Some government entities have had a policy like this in place, approved by the elected Board of Supervisors, City Council, etc. Everyone knows that the end result is to spike pensions, but the feeling has been that it is worth it to have time – say a year – to recruit and train a replacement for these top managers. Besides, it has been under the public radar.
Worth it and under the radar, that is, until these tough times when public sector pensions are in the cross hairs of a lot of angry citizenry and maneuvers like this to increase pensions are particularly galling. It appears the Board of Supervisors of Merced County got the message, for they just voted to end this policy. I doubt it is a new awareness of succession planning that produced this change in Merced; most likely it is heat on the Supervisors from an increasingly unhappy voting public.
The Merced Sun-Star newspaper reports that the policy in Merced County, implemented in 2001, applied to 28 positions consisting of Department Heads and Assistant CEO’s. The CEO himself brought the matter before the Board, stating it is no longer needed. Good move on Merced County’s part. How about your city, your county, your school district, your water district, your AQMD District, your Sanitation District? Do they have such a pension spiking policy in place, and if so what are you doing about it?
These pension deals are a real good deal for the government workers.
Even if the retiring worker has not yet reached 30 years on the job, they are allowed to “pay years” up to the 30. And even if the worker does not have the dollars to pay for the upgrade in cash, the government with financed the cost for them.
I had the chance to consult on one of these payouts recently and found that the employee cost of a year (or more) financed by the government is about half the monthly increase in pay for about 10 years for a life time benefits (30 years or so).
So I was thinking, I been working the polls for the county for more than a decade, so I would like to buy a county retirement for a non public safety employee. I think 60 thousand would be nice, of course 30 thousand would need to be deducted for 10 years as my purchase cost, but heck 30 thousand a year for nothing for ten years and 60 thousand thereafter for my life and then my wife’s life sure would be nice. And of course there is mandatory increases for inflation and full boat ride on medical too.
And if I get a splinter in my finger before my retirement starts, it is all non-taxable too, because everything is a service related injury.
Now of course the majority of current retirees do not get this sweetheart deal, but the majority of future retirees DO.
In a related note, the community college is having a class in the lost art of guillotine manufacturing. These were used extensively in 18th century France for paring down the costs of the aristocracy and plutocrats.