OC Watchdog Has Inside Scoop On Orange County Employee Pensions

The OC Watchdog is barking up the OC pension tree and have discovered a few interesting facts.  Before we get into what they found, though, we have to put it all in the right context.  The OC Register "told the court, we will use the information for research and analysis and not just post the raw data."  Why would they tell the court that?  Why not publish the raw data?  Anyway, you might remember  a few of these folk's names, like Bob Citron and Mike Carona:

"Robert Citron, the disgraced treasurer whose risky investments led Orange County into the largest municipal bankruptcy of its time, is collecting around $148, 327 a year. That’s an increase of more than 50 percent above the $92,904 a year pension that he made when he retired in 1994 – thanks to cost of living raises."

And then there is retired OC sheriff Mike Carona who is receiving $217,457 per year while out on bail appealing his federal witness tampering conviction.

Another top OC pension earner is Blake Anderson, who came in fourth on the County's pension list:

"... former Orange County Sanitation District general manager Blake Anderson, who was forced to resign in 2005 after hiring a leadership guru at $180,000 to help the sewer agency find its corporate soul. Dharma Consulting was hired by Anderson on a no-bid contract at $15,000 a month. Anderson, who was criticized in a later audit for exceeding his authority, now lives on about $228,025 a year."

I hope the list is released in its entirety and without redacting.  I think tax payers deserve to know how much is spent on county employee pensions.  Something that we always need to keep in mind is that the people we elect today will be the bloodsucking pensioners of tomorrow.  Stop defined-contribution pension plans for ALL elected officials!

Defined Contribution vs. Defined Benefit

"...All Other Pay Cash!"

I was doing some research and found this blurb from the National Institute on Retirement Security:

"Worries about retirement security abound. Families fear that they won’t have enough to support an adequate retirement income as home values and financial markets plummet. Dwindling profit margins have employers looking to cut costs.

And governments are concerned about delivering on the promises that they have made to their citizens and to their employees as tax revenues shrink amid a weakening economy. In this environment, some have proposed replacing traditional defined benefit (DB) pensions with 401(k)-type defined contribution (DC) retirement savings plans in an effort to save money.

But decision-makers would be wise to look before they leap. To deliver the same level of retirement benefits, a DB plan can do the job at almost half the cost of a DC plan. Hence, DB plans should remain an integral part of retirement income security in an increasingly uncertain world because they offer employers and employees the best bang for the buck."

Now that is some smooth writing.  I was almost convinced until I re-read it and noticed "To deliver the same level of retirement benefit..." The author isn't talking about the overall tax burden of the benefit but rather the overhead it takes to manage the benefit system.  I will surmise that the defined benefit plan would cost taxpayers far more in the long term than any overhead created in managing a two-tier system that includes a defined contribution plan.  Further, why not simply offer employees an opportunity to meet with a financial planner so that they can create an individual retirement account?  A generous employer may also choose to contribute a small percentage of the employee's gross annual salary each pay period.  Then, management of the funds becomes the responsibility of the employee and not taxpayers.

George Will and Public Employee Pensions: Trickle-Down Misery in L.A. - Mayor Villaraigosa's nightmare numbers

"Nationwide, government employees are most of what remains of 'defined benefit' America. More than 80 percent of government workers have defined benefits—as opposed to defined-contribution—pension plans. Only about 20 percent of private-sector workers have defined-benefit plans. California's parlous condition owes much to burdensome health-care and pension promises negotiated with public employees' unions, promises that are suffocating the state's economic growth."


Read the entire column at http://www.newsweek.com/id/237640.

The pension noose is around our neck as we wait for the baby boomers to retire from their public employment and cash in their unfunded pension plan.  Can we get the noose off before they cash in?  I doubt it...