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“Rethinking Public Sector Compensation” author Thom Reilly on the impact of federal government employee pension costs.
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Hello thousands of retired federal workers raking in six figure pensions every single year.
Something as much as 200 grant this coming as our federal deficit continues to skyrocket placing huge pressure on -- the the American taxpayer you and me.
Joining me now Tom -- pension reform expert and author of rethinking public sector compensation whatever happened to the public interests and Tom course.
You're an expert because you've run a plan you you know exactly what we're talking about carrier also an academic.
This story that was in USA today I I have to say it really surprised me the numbers were so over the top.
What's the biggest surprise to you what do you think it's most shocking when you look at these national numbers in the federal system.
Well financing the federal retirement system is way too expensive much more expensive than it should be.
Contributions into the system is dramatically.
Skewed against taxpayer for every one dollar that federal employee contributes.
Employer contributes fourteen dollars.
That's that's really out of whack.
In fact.
The growth of those systems of money were putting aside is is growing at double this -- the amount of inflation and we still don't have enough money because these federal pensions are way way underfunded.
Will we ever catch up welcome.
Are factually a tentative and they did address is 25 years ago -- the current system.
That we look at today is a lot less generous than it was 25 years ago but -- have a long way to go -- have a long way to go I mean when we're looking at.
Trillion dollars in unfunded liability at the federal level.
At the state and local level -- between one point 44 trillion dollars but a lot of liability.
That's a lot of money and make no mistake this is crowding out services this.
-- that prohibits.
The ability of many local state governments and federal government's offer services.
What I find interesting about this is that the kinds of benefits people are getting and and keep a -- -- this isn't a 401K this is a guaranteed benefit that you get every year.
No matter how this money was invested that it's double often what private sector people -- And that's really difficult to maintain because it's the private sector that's really paying these pension -- what.
I think -- I -- -- of a lot of sympathy among the public.
-- actually finance.
Pension systems that are index for life for inflation and also access to retiree health care with little -- -- So when you look at the system as a whole.
State local federal what do we do to reform act.
I think there's several things one is that some states are addressing there -- federal legislation to address that we -- one race -- retirement age.
We shouldn't have public employees retiring five to seven years earlier in the private sector and public sector can report.
Two is that need actually.
Increased employee contributions at every level.
There should be equal contribution special Social Security set up but fell for a one systems are so.
Yes.
I didn't pick up my contribution I -- make up my contribution ever since I started work and fumbled roughly increase transparency policy at the state and local level to a lot of these unsustainable benefits have been passed with little discussion little openness in the public.
When Republicans make basically caught off guard.
About this.
How large and unsustainable.
Liabilities -- appetite -- we've been reporting on this for about two years.
And I see the stories in the paper all the time and yet I don't see the will to do anything.
Is that because these public sector unions and the elected officials are sort of -- -- to keep these systems going.
Well actually argue are -- book truth that is it seclusion I think between the union employee groups elect officials and public managers.
-- and I think that over the years they have.
Path a lot of these unsustainable.
Policies with very little input from the public and you know how we rewarded manage public employees.
What -- -- we do in all the wrong way I mean he's way too heavily skewed towards time served and longevity and not enough focused on.
Performance but for girl thinking -- innovation.
Let tell you that -- and other private sector that's exactly how worked for when you crazy you can reform.
You get paid people don't -- you don't get and when you create a system that is skewed towards we can pay later.
And debt payment comes due long after elected officials out of the office we would create systems.
That have serious challenges for service delivery efficiency and sustainability.
Tom thanks for coming on today and -- a pleasure to have you on the show but somebody was actually -- it can speak from experience really.
