Cop union fighting to keep pension mistake windfalls
Portland's crazy pension and disability system for its public safety officers really presents a challenge for a writer. You want to call it bankrupt, but it's actually way worse than that. Most employers fret if the money they have put aside for pensions is less than 70 or 80 percent of the accrued liability to pay future benefits. With the Portland bluecoat pension system, the amount put aside is 0 percent. The whole thing is entirely unfunded; whatever needs to be paid out in any given year just gets sucked out of current property taxes. The system is insolvent to the infinite degree.
A private employer who tried that would probably wind up in trouble with the IRS, the federal Labor Department, Brad Avakian -- somebody. But if you're the City of Portland, you get to party on.
Anyway, that's not the main point of this post. Instead, we're brooding about this weekend story by Maxine Bernstein of the O, in which the police pension fund is trying to recoup money that it mistakenly overpaid to retirees. Everyone seems to admit there was an error, but now the retirees are saying that the taxpayers should just have to eat that mistake -- they're not going to allow their future cost-of-living increases to be docked by the overpayments they previously received.
It's really telling when law enforcement people won't make things right. It reminds us a little of what happens after they needlessly kill somebody.
| Posted at 7:43 AM | Permalink |
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Comments (4)
Of course, if the mistake was in the other direction, the union would be on this like white on rice screaming for justice and vindication.
Obviously absolute power corrupts absolutely. I'd be half-tempted if I was the board (who the heck knew these ahd any power) to just let it go and throw it in the IRS' lap. Once the lose tax-exempt status, it seems the threat of some back taxes due would kinda show Mr Turner maybe he's too smart for his own good.
Of course, they'd want the taxpayers to cover that if it happened, so we'll get screwed either way.
Posted by Steve | June 13, 2011 8:13 AM
Interesting that the public safety pension system differs from PERS on this point. At least the PERS statutes mandate recovery of any overpayment to a retiree.
Good luck to the unions trying to sell their story to taxpayers... "We got extra money we didn't deserve and we shouldn't have to give it back."
Posted by jmh | June 13, 2011 8:24 AM
Good for the board for showing some cajones on this. IIRC, the board used to be stacked with beneficiaries (our own dear Admiral Leonard included) until it was reformed to have more outsiders. With fewer foxes guarding the henhouse, we've seen some serious attempts to reign in the worst flaws and abuses of the system (except the unfunded liability thing, which no one seems to be in a rush to fix).
Posted by Eric | June 13, 2011 8:53 AM
"Once the lose tax-exempt status"
Sorry, I should've said:
"Once they lose tax-deferred status fr contributions"
I guess re-reading this, it'd be treated like a Roth rather than a 401k if the IRS says they aren't follwoing the rules.
Posted by Steve | June 13, 2011 9:33 AM