Since we’re on the subject of pensions, let me blog about a little informal comparison I did regarding different governmental pensions.

My father is what is referred to as an actuarial anomaly in the retirement business. He has managed to collect a Navy retirement for over 32 years now and appears (God willing) healthy enough to continue collecting one for some time. The actuarial experience for his generation reveals that military personnel, as with police officers, are only expected to collect a retirement for about 12 years after they leave service.

Recently, I took the opportunity one afternoon to talk to my father about his Navy retirement and to do a little comparison with what the U-T editorial board has deemed to be my “gold-plated” pension. Funny, for years they continually referred to city pensions as “Cadillac Pensions,” until someone enlightened the editorial staff that a Cadillac really wasn’t the standard of luxury anymore.

Anyway, what I learned from Dad was really something I already knew, our pension is about average for governmental employees. Meaning some government pensions are better than ours and some are not.

So what makes a Navy retirement better a city of San Diego retirement? Quite a bit actually.

My dad joined the Navy at age 19, became an officer, and then retired in 1974. My dad started collecting his Navy retirement as soon as he left service when he was only 41 years old. My dad didn’t remember if the Navy had a minimum service retirement age, but was sure some of his Navy buddies retired before they were 40 years old.

Retirement before the age of 40? That’s certainly a better feature than my city pension plan has. The earliest a police officer can collect a service retirement is at age 50, with 20 years of service. We’ll score one in favor of the Navy retirement for its early retirement age.

My dad received a 52 percent retirement based on his pay scale in 1974, but now receives an amount that has almost quadrupled in the last 30 years. That can’t possibly be done in our city retirement plan. Retirees receive only a maximum 2% cost-of-living allowance each year. At best, over a 30-year period, our retirees may see their original monthly retirement increase about 90 percent. It won’t even double.

Why is a Navy retirement so much better? The Navy retirement has a true COLA that is tied to the current rate of inflation. During periods of high inflation, which occurred in the 70’s, 80’s and 90’s, the Navy retirements adjusted accordingly so its retirees’ monthly allowance didn’t lose it purchasing power.

Sadly, some pre-1970 city retirees are living on a monthly allowance of less than $800 because their 2 percent COLA couldn’t keep pace with inflation. With these retirees, the supplemental contingent investment benefit, called the 13th check, is critical to them. For some retirees, the 13th check, with its maximum benefit of $900, is the difference between buying needed medicine, or going without.

Again, it appears the Navy retirement has a much better plan.

What about healthcare? As part of an agreement in 1981 by the mayor and city labor groups in exchange for opting out of Social Security, the City agreed to provide retirees with lifetime healthcare benefits. The healthcare benefit is for the city employee only and does not include the retiree’s spouse.

The Navy retirement does. Since retiring, my dad has had a titanium rod placed in his leg, a pacemaker, and just recently a cadaver bone placed in his neck. All these operations were performed by specialists via the healthcare coverage provided through his Navy retirement. The cost to my father for these operations was nothing, not even a co-pay. Navy retirement wins again!

So what is the cost to the employee for these retirements? Well, my dad never had to make any contributions into his Navy retirement during his 22 year career. Not a penny!

My retirement contributions are a different story. Just last week (Payday Friday) I looked at my bi-weekly SDCERS retirement contribution, $301. That’s almost $8,000 a year. My total retirement contribution balance (the amount I’ve contributed plus interest) was about $240,000.

So, let me see if I have this comparison straight. Dad has what appears to be a better retirement and it’s free to him. On the other hand, I have a good retirement, but it’s not as good as dad’s, but it is comparable to the retirements of most law enforcement agencies around the state. In addition, I have contributed about $240,000 into my retirement account, which was suppose to be matched by the City, but apparently they wanted credit instead.

And that’s a “gold plated” pension? I don’t think so…

I have the Cadillac pension, with the monthly payments to show for it!


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