The Major Problem with the Public Pension System

02Aug11

To me, this is pretty simple.  There is this mentality in the RI public sector unions that you can retire after 20 years.  Ok, sure, I have no problem with that.  But how did they get that mentality?  It is because that is when their pension is fully vested.  Rather than seeing it as a “vesting date” they see it as a “retirement date”.  I don’t understand that.  Why do we start making payments to people who are retired after their 20 years and still pretty young and healthy?  I’m fine with paying the pension to disabled retirees.  That’s a different conversation.  I’m talking about the people who retire from their job, go on to live a healthy life, or as in some cases, take another job that offers another pension.

Many teachers are able to enter the classroom at 23.  Some police and fire and other municipal employees can start work at 20-25 years old.  So with this current system, they can put in their 20 years and be fully vested at 40-45 years old.  Then what’s the mentality?  Time to retire!  Time to start collecting that pension!  So with most healthy people living well into their 70s or 80s, we’re paying people to be retired for as much as 40 years after they contributed to the system for 20 years.  That math just doesn’t work.

So my change is that people can still retire any time they want, but they cannot start collecting their state or municipal pension until at least 62 years old.  Go do whatever you want in the meantime.  Keep working, take a new job or hang out eating Cheetos and watching Court TV all day for all I care, but we can’t afford to pay people for those extra 15-20 years that they could still be productive members of society.  Let’s dry up that well now.  This one change will save the state billions.

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