Portland cop pension blunder continues to rankle
The latest news on the $3 million of overpaid retirement benefits shelled out to Portland police and firefighters is troublesome: The city can't claw back the overpaid benefits by holding back retirees' cost-of-living increases. If the city doesn't get the money back somehow, the IRS says it will revoke the pension program's tax exemption. That would immediately increase the taxes of every member of the police and fire forces hired before 2007. It would thus be in the interests of everyone in the system for the overpaid retirees to pay back the mistaken amounts. But you know how those government employees are, even in retirement.
| Posted at 8:47 AM | Permalink |
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Comments (12)
Yes, only gubmint employees put private self interest first and let short term thinking guide them to bad decisions. This is definitely not something one observes in the private sector.
Not.
Posted by GA Seldes | July 31, 2012 9:03 AM
Has the IRS ever revoked a pension plan's tax-exempt status? It's such a draconian penalty that it seems pretty much toothless.
Posted by Allan L. | July 31, 2012 9:11 AM
Here's a quirky idea: when I overpay my credit card bill (it's happened), I apply the excess as a credit against the next charges. If these overpaid retirees are still getting benefits, why not do that?
Posted by Allan L. | July 31, 2012 9:14 AM
What does it matter whether the people in the private sector do it too? People will almost always look out for themselves above others, it's called human nature.
If the city wasn't run by imbeciles this wouldn't even be a problem in the first place, but I suppose that's setting the bar too high for our Portlandia officials.
Posted by LC | July 31, 2012 9:15 AM
Now wait a second, I thought that property tax bump that Randy got passed (OK, already Portland voters are stupid) 3 years ago was going to fix all this.
I mean we're paying a surcharge for what? 30 years because of that election? And PFDR still has some "issues"?
Why anyone believes any govt official is beyond me.
Vote NO on each and every bond or tax increase.
Posted by Steve | July 31, 2012 9:25 AM
What a shock !!
One branch of government masters fighting ANOTHER branch of government masters about how to screw the taxpayers !
It certainly reinforces those that declare it's "US against THEM".
Posted by ltjd | July 31, 2012 9:42 AM
To Allan L: Yes, the IRS has been successful at disqualifying pension plans in the past. They revert to taxation as a complex trust if they lose their exempt status.
The draconian effect of the penalty will not prevent it from being applied in the event that the county cannot satisfy the requirements of the IRC or the IRS' designed alternatives to plan disqualification.
Posted by wpricetax | July 31, 2012 9:54 AM
"If these overpaid retirees are still getting benefits, why not do that?"
I think that was the idea behind the cutting cost of living benefits.
The guys saying no to this are really working on an excess of hubris. I hope they do get slapped by the IRS and then they can deal with the retirees they represent.
Posted by Steve | July 31, 2012 10:51 AM
What does it matter whether the people in the private sector do it too? People will almost always look out for themselves above others, it's called human nature.
Yeah but public employees have taken the whole concept and raised it to an art form on steroids. When it's public money at stake everyone is in on the scam except private sector taxpayers, who then get bashed as the 1% when they point it out.
But the day of reckoning is clearly coming.
While it's not exclusively a blue state phenomena, blue states by and large are much worse off than the red states in this regard.
Posted by boycat | July 31, 2012 12:33 PM
We should be giving the top people a sweetheart deal, so that they don't have to give it to everyone to get it for themselves. That's how the private sector does it.
Posted by Allan L. | July 31, 2012 3:11 PM
"That's how the private sector does it."
If you think top level govt is any less corrupt than top level private, you're anive. In addition, I am not compelled to give the private sector my money like I am the govt.
Posted by Steve | July 31, 2012 8:36 PM
At PERS, overpayments to retirees are dealt with by reductions in future payments. Social Security too. What's so hard about that?
Posted by Nolo | August 1, 2012 2:19 AM