It goes without saying that New Yorkers owe a tremendous debt of gratitude to police officers, firefighters and other public employees who literally put their lives on the line every time they report to work. The heroism of first responders on 9/11, the ongoing vigilance of cops and other security personnel in the face of terrorism threats and the everyday courage of firefighters represent the best in public service.
That said, it is time for the city and state to crack down on those uniformed personnel-and others on the public payroll-who benefit from loopholes that pad their pensions at great expense to the taxpayers they served.
A recent story in The New York Times offered a glimpse at the sort of pension machinations that are going to be the ruin of the city and state if they are not done away with. The newspaper reported that more than a hundred retired cops and firefighters who used to work in Yonkers are now collecting pension checks that are larger than the base salaries they made while working One of them is earning a pension of $101,333 a year, after retiring at age 44 with a base salary of $74,000.
What’s astonishing is that this practice is perfectly legal. Cops and firefighters and other public employees in New York City and elsewhere routinely pile up overtime several years before retiring. This does more than just put a little extra cash in their pockets-it distorts, to their benefit, the formula on which their pension is calculated. Their future payouts are based on their overall salaries, including overtime, during their last few years of service. This gaming of the system, unintentional though it may be, must stop.
We’re certainly in favor of paying public servants well, but they should be paid up front. Defined pension benefits, which entitle retired public employees to an annual payment for the rest of their lives, are a relic of the civic welfare state of postwar America. Taxpayers in the 21st century cannot, and should not, subsidize the lifestyle of public servants who often retire in their mid-40s and often embark on second careers. The state and the city must hasten the transition to 401(k) pensions, which require a contribution from workers and which pay out a certain amount upon retirement.
Here’s why: The Times revealed that 22 New York City cops recently retired with pensions of more than $100,000 a year. Thirteen of these retirees were 40 years old; nine were still in their 30s. Taxpayers will be forwarding them a hundred grand a year (more, when cost-of-living adjustments are made) for the remainder of their lives.
The Times found that nearly 4,000 retired public employees earn pensions of more than $100,000 a year. Those pensions, incidentally, are exempt from state and local taxes.
This is neither fair nor just. To be sure, pension reform alone will not solve the financial problems of Albany and City Hall. But this is a place to start.