If You Wanted To Inflame the Anger Over Overcompensated Public Employees . . .

Monday, August 8th, 2011

 . . . this would be a good way to do it.

Santa Clara County’s housing authority could have spent $16 million of federal funds to help more struggling families put a roof over their heads. Instead, it chose to more than double the value of its employees’ retirement benefits.

That may sound unusual, but federal housing officials say it was an allowable expense. Still, the switch from a 401(k)-style retirement plan to a pension allowing workers to retire early — with guaranteed lifetime payments — is raising eyebrows at a time when generous public employee pensions are under fire. . .

Bill Anderson, chairman of the Housing Authority of the County of Santa Clara’s board of commissioners, conceded that the money spent on employee pensions could have been used in other ways, including housing aid for low-income families.

Indeed, the waiting list for federal housing assistance is so long that applicants must now wait four to nine years.

Anderson also acknowledged that with the area’s high unemployment, the housing authority could fill jobs without a more generous retirement plan. But he said he considered the agency’s employees, whose average salary according to CalPERS is $60,730, underpaid compared with other government workers, most of whom have pensions.

“I was very much aware that this was money available for whatever else we do,” said Anderson, a retired assistant county counsel. “I thought it was the right thing to do for the employees.”

Housing authority workers who under the old plan had to wait until they were almost 60 to draw from retirement accounts — which could be shrunk by market losses — can now receive a guaranteed monthly pension check as early as age 50. And they’ll have a guarantee of 2 percent annual increases after they retire . . .

The change in retirement benefits was made possible after the U.S. Department of Housing and Urban Development in 2008 made the housing authority one of 32 Moving to Work demonstration sites. The program allows more spending flexibility to encourage “innovative” approaches that “use federal dollars more efficiently.”

Via Hit & Run.

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55 Responses to “If You Wanted To Inflame the Anger Over Overcompensated Public Employees . . .”

  1. #1 |  Newsouthzach | 

    “Yup, PhD Biochemist, $30k/year at age 29, no health insurance (I’m on a federal grant as a “temporary employee”), no pension”

    Move to Australia where the academic unions are stronger. $95k/year at age 29, PhD physicist, health insurance includes a $100 deductible before everything is covered 100%, employer pays into a defined benefit plan that would pay 85% of final salary upon retirement or you can take 17% of your salary to a defined contribution plan, tax free.

  2. #2 |  Newsouthzach | 

    Sorry, wasn’t clear there. Employer pays the 17 percent. That’s what unions do for us working folk.

  3. #3 |  Newsouthzach | 

    Also: not an Australian. That’s private insurance paid by the employer. Unions.

  4. #4 |  Mattocracy | 

    @ Leon Wolfeson,

    Or people could take a interest in understanding the market and know what the fuck their managers are doing. Personal responsibility is a bitch sometimes, but if you’re seriouse about your retirement, know what the hell your investment people are doing.

    Or you could do what my grandparents did and save. Either way, people shouldn’t expect others to pay for their retirement.

  5. #5 |  fwb | 

    You can be as angry as you want at the state officials. BUT it is the Congress that was wrong for granting the money in the first place. Congress has absolutely no constitutional authority to spend for local issues, AT ALL, EVER.

    Article I, Section 8, Paragraph 1 limits expenditures to the debts, common defence and general welfare of the United States – a body politic, not less than for all 50 states, not less than for every individual, never for foreign aid of any kind. How many states does it take to make a general welfare of the United States? How many individuals does it take to make a general welfare of the United States?