The Cost of Government Pensions

Earlier this week the Sacramento Bee hosted a chat on the topic “Should States Rethink Collective Bargaining.” In addition to journalists from the Bee, participants included Steve Greenhut, editor of CalWatchdog.org, and Art Pulaski, the chief officer of the California Labor Federation, AFL-CIO.

During the hour-long discussion, the topic of public sector pensions came up a few times, and Mr. Pulaski stated that the average pension collected by retired state workers in California are not much more than social security. Referencing the chat log, he said:

“ArtPulaskiCLF: the average state worker gets a pension of $24,000 and often without social security. Not lavish by any means Tuesday March 8, 2011 12:48 ArtPulaskiCLF”

This is a profoundly misleading statement. When Pulaski, and others who share his perspective on these issues, use numbers this low, they are reporting an average that includes everyone on the CalPERS retirement rolls, even people who have barely vested their retirement benefit by only working five years for the state. Furthermore, this average includes part-time workers, and it includes long-time retirees who left the workforce before base pay and pension formulas had been increased significantly – and unsustainably – as they have in the last 10-15 years during the economic bubbles.

A more realistic way to gauge the fairness and financial sustainability of state worker pensions is to reference the average pension for [...] Read More