Pension Reform, Now

Let’s state a simple but important truth: public employees are entitled to a dignified retirement. Their pensions, combined with Social Security and private savings, should provide them with the income they need to live a full and happy life after decades of work.

But let’s remember that a taxpayer-supported pension is not a salary. And let’s also remember that no pension system can sustain itself if those who draw on it are raking in salary-sized annual payouts.

A think tank in Albany, the Empire Center for Public Policy, recently reviewed data from the city Teachers’ Retirement System, which handles the pensions for New York City schoolteachers as well as some, but not all, retirees from the City University of New York system. As reported in The New York Post, the Empire Center found that a 90-year-old retired Queens College professor is drawing a pension of $561,000 a year. That’s not a pension. That’s a salary, and an enviable one at that.

It gets worse. Another retired CUNY professor makes more than $300,000 from his pension, and 15 other retired schoolteachers or administrators make more than $200,000 a year in taxpayer-supported pensions. That includes the current chancellor, Carmen Fariña, who had retired from the system but returned to the work force earlier this year to lead the Department of Education.

Nearly 2,000 retirees draw pensions of $100,000 or more from the Teachers Retirement System, which handles pensions for more than 80,000 former teachers, academics and administrators.

Obviously most retired teachers—and most retired firefighters, sanitation workers, police officers and other public servants—do not collect six-figure annual pensions. But it is equally obvious that the state and city cannot sustain the current system. As Michael Bloomberg used to point out, pension costs exploded in the first decade of the 21st century, rising from 2 percent of the city’s budget in 2000 to 11 percent last year. And it’s not just a New York problem. New Jersey’s credit rating continues to plummet in large measure because of the state’s unfunded pension and health-benefit liabilities, now estimated to be $90 billion.

You don’t make public policy by anecdote, but by the same token, the stories uncovered by the Empire Center remind us that generations of politicians have made irresponsible promises to politically powerful public employee unions. And we’re getting stuck with the bill. Unions and elected officials have resisted radical reform, and that resistance could easily lead us to the edge of bankruptcy in the not-so-distant future. Pension Reform, Now