This comes up over and over again. Most police and fire pensions are seperate entities and dont affect the cities budget other than whatever they are contributing each month (just like an employer match). They are not owned or operated by the city. When pension benefits are increased it is because the pension fund has done well enough to pay out better benefits, not because the city is being forced to contribute more money.
Also, very few if any civil servant pensions that I know of figure overtime into the final salary that is used to calculate the pension benefit. And even if some do, why does anyone care? Again, it doesnt affect the cities budget at all. The cities contribution amount isnt affected.
Being a recipient of a public pension, I know a little bit about
our pension fund...and funding. From the 1st day on the job I contributed...automatically, by state statute, a certain % of my gross income each payday. My employer, likewise, automatically, by state statute contributed a certain % base on my income each payday. When I retired, the pension board (which is NOT owned, operated, or in any way controlled by my employer) determined, based upon my 30+ years of total earnings, how much my employer was required to transfer over to the pension board as a final, one-time sum, to fully cover
my pension for life! And that sum was
FAR LESS than what they'd be paying me had I stayed working and not ER'd. From the time they made that one-time final payment, they will NEVER have to contribute one plug nickel to cover my pension...nor will any of the other employees. My account is "Paid In Full"....as are the accounts of
all who have retired before or after me.
And FWIW, our pension fund was fully funded 100+% (105% IIRC) before the Wall Street toilet flushed. It's still very much solvent, and on track to be back up to 'fully funded' status in a matter of a few years.....the trustees of the fund are very cautious in their investing, since they too are future recipients of this pension....half of them are elected to the pension board by the participating employers, and half of them are elected by the participating employees. And although the pension is governed by state statute, thankfully, it cannot be touched by the [-]thieving, lying, despicable, moronic twit[/-] Governor or state legislature....unlike many of the state pension funds in IL....and it will be another 20 years before they get another shot at being able to change the state constitution to be able to try to get at the solvent public pension funds in IL. (Thank God the voters of IL on Nov.4th, defeated the proposal for a Constitutional Convention!!!)
As to the OT figuring into final salary/pension calculations....our city's former police chief retired a few years ago, and had a large 'bank' of OT and comp-time still on the books from the years
before he was appointed chief. It was his, he earned it, and as such it was turned in for pay when he retired. He felt that that
VERY LARGE chunk of change should be used to calculate his final rate of earnings, which would drastically increase his pension. The city disagreed, the pension fund administrators disagreed, but the local court agreed, and ordered that he paid accordingly. Both the city & the pension admins appealed, and a higher court agreed with them, and overturned the 1st court ruling. It may have been different if the pension rules weren't spelled out clearly as they were.
How is that a scam? You could also work 2 private sector jobs and have 2 401Ks, or retire from one private sector job and go to work for another and start accumulating more money in another 401k....
I'm not clear on why it is even considered a loophole. The individual earned the first pension and is taking it. He wants to get another job. He can work for anyone, and anyone can hire him. Should the government, of all the employers out there, be selectively denied access to his services? Or, if he takes a job with them, should he, for that reason alone, forfeit the pension he earned as part of his earler agreement with his employer?
If govt pensions (specifically, at what age an individual can begin collectng them) is the issue, then it should be addressed (for new hires). But that's a different issue than honestly earning two pensions while following the rules.
I know several people both in the private and public sectors, that have fulfilled all of the requirements for their 1st pension and have retired from that job, and gone on to work elsewhere and earn a 2nd pension. Like utrecht says, how's that a scam? It's above board, and fully legal...there's no 'double-dipping', 'scamming', 'loopholes' or whatever. I worked with a guy who retired from a private sector Mega-Utility with a very nice pension. He was then hired by the local municipality, and since he's young enough, he'll be able to earn a reasonably sized public pension. There are others who I know that have retired from the muni, and have earned or are earning a private sector pension....earned a 1st private pension and are working toward a 2nd private sector pension...and some who have retired from one public entity, and are working toward a 2nd public pension.
I'd consider it myself....but I'm faaaaar toooo lazy to even consider working again.
