There’s a lot of discussion brewing about pension reform in the Lone Star State. We’ve seen across the nation the problems caused by poorly run pension systems. If we are to head down this road, maybe the first pension the legislature addresses in 2013 should be their own?
In fairness, I have not studied the various liabilities, weaknesses and strengths of the numerous pension programs serving city and local government employees. I’m not commenting here on the merits of any proposed reforms to those plans – other than that we should always look carefully how best to protect both the taxpayers and the taxpayers’ employees.
Many lawmakers like it to be known how selfless they are in their public service — and many truly are. For their $600 per month salary plus per diem expenses in Austin, they do rack up a lot of personal charges. Of course, they also sign up for the job, which wields enormous influence and power.
But it’s a part-time job that gives legislators full access to the same health insurance benefits state employees get. On top of it, they get a very nice pension if they serve eight years. A pension they get to collect even if they have been soundly trounced in an election. Even if they go to jail for nefarious activities committed while serving in office!
Lawmakers have given themselves a pretty nice nest egg... with your money
You might ask, “How nice of a pension can you get for a $600 per month job?” Well, that’s the thing. The legislature has tied their pension to the pay of a full-time, state district judge.
As the Austin American-Statesman put it:
[Legislators] contribute only a small chunk of their $7,200 salary but get a monthly pension check after retirement that is based on the $125,000 salary of a district court judge.
Now that’s the making of a nice little nest egg.
The longer someone serves in the legislature, the bigger the check. After serving 20 years in the legislature, a retired politician can draw down more than $57,000 a year!
Sure, the number of retired legislators is always going to be a drop in pension bucket, but there is a bigger moral issue at play. Legislators really shouldn’t demand full-time state employees switch to a defined-contribution (instead of the current defined-benefit) plan when they themselves get pensions far exceeding their own contribution.
Remember: some — but not all by any means — legislators are either independently wealthy, have full-time employment, or are already retired. But do they really need a second retirement plan? Some might ask if legislators shouldn’t plan on staying so long that they need a retirement?
If the legislature wants the moral authority to address the unfunded liabilities of government employee retirement systems, maybe they should consider leading by example and ending the farce of their own retirement program.