Friday, March 25, 2005 | Andrew Donohue’s series of articles detailing the “plight” of San Diego city workers who are nervous about their pensions tells only half the tale. Here’s “the REST of the story” about San Diego employees, such as the example of city marine biologist Rick Rowe.
1. Rowe whines that he hasn’t been promoted for 10 years. Promoted to what? Head city marine biologist overseeing the city’s OTHER marine biologist? He has chosen a specialty occupation that, while paying well, does not lend itself to advancement up the ladder.
2. You’d think from the above complaint that Rowe hasn’t had his pay increased for that period. Not true. City workers have had generous pay increases over the years, both for inflation and oft-times for “step increases” for seniority. Rowe hasn’t had a recent “step” increase only because the city often gives accelerated step increases in just two years – moving many employees from the bottom to the top of the pay scale far faster than happens for private sector workers.
3. Unmentioned is that, while Rowe can change jobs to another employer, it is all but impossible to fire him, and his employer will never go out of business. Such incredible job security is unheard of in the private sector. During Rowe’s 12 secure years working for the city, how many private sector biologists have had to find new employment?
4. The theme of the story is that Rowe is worried about getting all of his pension, which supposedly is why he went to work for the city in the first place. But Rowe started work for the city in about 1993. The 1993 pension he signed up for was based on a significantly lower formula than the opulent pension calculation method used today.
The biggest pension windfall increase occurred in 2002 when employee labor union leaders agreed to a substantial 20 percent increase in city pensions in exchange for keeping quiet about continuing city underfunding of the plan (underfunding does NOT avoid the city obligation to pay the pensions).
The worst thing that can happen from Rowe’s viewpoint is that the 2002 pension increase (essentially a bribe) is declared illegal and therefore invalid. Rowe STILL ends up with a more generous pension plan than the one he signed up for in 1993. To infer that he might somehow be cheated out of his expected pension is pure bunk.
5. While there are some efforts to invalidate the 2002 20-percent pension bribe increase (and rightly so), there is absolutely no effort to further reduce existing employees’ pensions below that level. The ONLY discussion concerns a timid reform to lower the pension obligation for NEW workers hired in the coming years. This “losing our pensions” canard is the crux of the scare tactics employed by scheming labor union leaders who know better than to tell their members or the public the truth.
6. Little consideration is given to the gold-plated health care plan Rowe will carry into retirement at the ripe old age of 55. Talk to a private sector worker who, IF he can retire at age 55, will have to start shelling out over $10,000 a year for a health care plan that is not nearly as good as Rowe’s city plan.
7. Rowe is concerned his purchases of extra years’ credit are in danger. Not likely.
Aside from some rumblings from City Attorney Mike Aguirre, there is no serious effort to invalidate the previous years’ employee purchases of credits at the great discount. FUTURE purchases may face some opposition, but probably not the past ones.
The worst possible scenario is that Rowe would get his credit years’ purchase money back with a high rate of interest. Besides, when Rowe hired on in the early 1990s, there was no such option to buy extra years, so he is not losing some benefit he was expecting when he started with the city.
8. How many private sector workers can retire at age 55? Even most public employee plans set age 60 as the retirement age. San Diego’s early retirement age is a HUGE advantage for our city employees.
9. How about the annual cost of living increase (2 percent max annually) in Rowe’s pension? No private pension plan in America offers that benefit.
10. Is there a private pension plan in America that, on a $60,000 salary, will guarantee Rowe a $2,000-a-month payment for only 12 years work? Nope. Even 98 percent of all public government plans in the nation don’t offer anywhere near that bountiful a payment. The typical government pension based on these parameters would still be a generous figure – around $1,400 a month.
11. When asked what the city should do about the huge pension costs, Rowe favors only city “increases in revenue” – tax increases. To add insult to injury, Rowe plans to retire in Oregon in a couple of years, so he wouldn’t have to pay even that cost. Oregon has NO sales tax.
Apparently Rowe wants San Diegans to pay higher taxes for his retirement, while he flees to a lower tax state. This is common. Many city employees don’t live in our city, and those that do often depart the area upon retirement – leaving local taxpayers to pay the bill.
12. Also unmentioned are the other perks usually available only to government workers – more paid holidays, longer vacations, full pay for jury duty and, last but not least, a lenient and comprehensive disability plan coupled with a lucrative death benefit.
13. The real plight that should be highlighted is the plight of private sector workers. They live with employment uncertainty, lower wages, smaller pensions (IF any pension at all) and no retirement health care coverage before Medicare kicks in at age 65. Lay the two stories side by side – Rowe vs. the private sector worker – and then see how sorry you feel for the “plight” of this city employee.
14. Finally, what is the moral basis for using government force to take money from less fortunate private sector workers (the bulk of the city taxpayers) to provide Cadillac pay and perks to city government employees? Who designated our city public servants as the new aristocracy?
Indeed, it is the city taxpayers who are now the real “public servants.” Apparently that’s just fine with Rick Rowe.
Richard Rider is chairman of San Diego Tax Fighters, a grassroots taxpayer organization. In 1992 he won a lawsuit overturning an illegal county sales tax.