Editor’s Note: This article quotes a New Hampshire police officer, disgruntled about his pension benefit reductions. He claims – and his Facebook quote appears below – that if he’d put 12% of his pay into a 401K he would “be better off.” Here’s what he expected: To work till age 47, with 22 years of service, and collect 50% of his final pay in retirement. The reality? If he’d put 12% into a retirement account at 7.0% annual return and collected withdrew each year in retirement a pension equivalent to 50% of his final salary, he’d run out of money in nine years. The officer in question is encouraged to download the spreadsheet and see for himself, as are all public servants, in New Hampshire and in California, and everywhere else, who may think they’re getting a raw deal.
Many cities in New Hampshire use highly paid (overpaid) police officers for routine work like holding stop signs when utilities have to trim trees along roads.
A debate is now brewing in the legislature as to whether to use flaggers instead of police officers for such work.
Courtesy of the New Hampshire Union Leader, here is an image. Click on the link for an article and other details.
Police vs. Flaggers
For the third time in five years, a bill was introduced into the N.H. legislature requiring the use of flaggers instead of police where appropriate. The article noted that in many cities, police chiefs make the call.
The result is just what one might expect. Police cherry-pick the easy jobs, letting flaggers have the rest.
Police work pays in the range of $40 to $50 with an additional $25 or more per hour tacked on by the town for benefits and “administrative charges.”
The utilities have to pay this expense. Of course, utilities pass that expense on to local taxpayers.
The police unions object to the new bill. They use storms, utility work, etc., to pad hours of police officers, typically giving the work to officers in their last five years because pensions are based on salary made in the last five years.
These guys get to retire at age of 45-50 with half their maximum salary.
Check out the arrogance of union worker, Stephen Soares, from a Facebook comment regarding the New Hampshire Union Leader article.
This public union “servant” actually complains about having to work to age 47 where he can then retire collecting half his salary for perhaps another 30 or more years, making more in retirement than he ever did in public service.
The absolute arrogance of people who are supposed to be “public servants” is staggering. The only reason pension benefits are as absurd as they are is because corrupt politicians got in bed with corrupt union bosses and screwed the people they were supposed to be serving.
Now they have the gall to complain about the slightest cutbacks in benefits gained by graft and coercion.
I wish I could say his attitude is atypical, but I don’t believe it is.
Solve the Pension Crisis Overnight!
If Soares thinks a 12% IRA contribution (actually paid by taxpayers in the form of higher salaries) would have made him better off, then I say give it to him.
Let’s take 12% of Soares’ earnings for every year back to when he started working, and put those contributions in a back-dated S&P 500 account that also factors in reinvested dividends.
Better yet, let’s do that for every police, fireman, and other public union worker in the country. It would solve the pension crisis overnight.
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About the Author: Mike Shedlock is the editor of the top-rated global economics blog Mish’s Global Economic Trend Analysis, offering insightful commentary every day of the week. He is also a contributing “professor” on Minyanville, a community site focused on economic and financial education, and a senior fellow with the Illinois Policy Institute.