Lifestyles of a Government Pension: Retire at 48 and Receive Million Dollar Pensions
Omaha’s Police Chief has turned in his retirement papers at the ripe old age of 48. That’s no typo, at age forty-eight, when the average American will continue working for another 16 years, Alex Hayes will retire.
Chief Hayes will retire with a full Omaha Police management pension, which according to the Omaha World-Herald will pay the Chief $127,405 annually with a $600 annual cost-of-living increase.
Three million, five hundred and eighty three thousand, five hundred and forty dollars.
That’s how much Omaha’s taxpayers will shell out to pay Chief Hayes’ his full pension over the course of his lifetime.
The average life expectancy for an American male is 76. With Chief Hayes’ retirement at age 48, plus the $600 COLA kicking in after one year, to total cost of this one city employee’s pension could be $3,583,540.
To support public employee pension reform is not to oppose rank-and-file police and firefighters who serve the public.
Supporting public employee pension reform means acknowledging the truth: taxpayers cannot afford paying over $3.5 million to fund ONE person’s pension.
AFP-Nebraska supports public pension reform.
In 2011 only 21% of private sector employers provided a defined benefit plan to their retirees, while 84% of government employees receive the generous benefit.
A defined benefit plan is a guaranteed value of salary, health care and other benefits that will be distributed to retirees; whereas the common system in the private sector defined contribution merely stipulates the match employers will contribute to the employees retirement plan. Often this is a 401K, or similar program.
This discrepancy between public and private goes a long way in explaining why on average government workers receive 69% greater benefits than retirees in the private sector.
This basic economic problem; continual rapid growth in costs with limited revenue especially considering the current economy coupled with a volatile stock market, and it does not take an economist to realize that defined benefit programs do not work.
Nebraska should lead the way in reforming our states pension program. Taxpayers cannot be on the hook forever to guarantee retirement benefits that are simply unheard of in the private sector.