The city of Stockton CA is declaring bankruptcy. There are several reasons, not the least of which, is that the city’s cost for retiree benefits. From the WSJ:
“The average firefighter costs the city about $157,000 a year in pay and benefits and can retire at age 50 with a pension equal to 90% of his highest year’s salary plus nearly free lifetime health benefits.”
I don’t know what the average salary is at 50 years of age when union public employees retire, but it would certainly be somewhat higher than the 157K$ average.
Actually it much worse than that! Union and many other employees can spike their pensions in CA by adding all unused sick leave, vacation, uniform allowance, car allowance, CTO etc. to their last years salary from which their pensions are calculated. Police and fire pensions are sometime as high as 124% of their pre-retirement salary at age 50.
BTW, this is the standard retirement package for most union employees throughout the state including city and county, with some but few exceptions.
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So:
What do your public employees retire at?
Do you have spiking or did you even know about it?
Are you going to retire at 50 at between 150 to 200 K$/yr.?
Should the city be cutting services to provide these kinds of benefits?
