On June 10, the Coral Gables Retirement Board eliminated easy access to these figures when employees apply for retirement:
• Annual Pension
• Employee contributions (throughout employment)
• Cost to the city (retiree lifetime benefits)
From now on, this information will only be available by fishing it out from personnel records, thus hiding the over-generous terms that past city commissioners have granted to employee unions.
Witness two current cases:
Policeman X, 25 years service, retiring at 47.
• Annual pension: $121,375.56
• Employee contributions: $19,638
• Cost to Coral Gables: $4,005,393
Fireman Y, 25 years service, retiring at 45.
• Annual pension: $97,377.12
• Employee contributions: $ 45,860.99
• Cost to Coral Gables: $2,921,313.60
A contrasting case:
Average U.S. engineer, college graduate (7% with Ph.Ds, 14% with master’s) 40 years service, retiring at 65:
• Annual Pension: $114,672.00
• Employee contributions: $89,444.00
• Cost to Employer: $1,720,080.00
Evidently U.S. engineers have lower retirement benefits than Coral Gables employees.
Consequences of this largesse?
• Coral Gables pension obligations, as of 2012: a catastrophic $830,000,000;
• In 2012, employee contributions to their retirement system will be only $3,500,800;
• Annual payments to retirees in 2012 will be $28,748,366.
• In 2012, taxpayers (actuarial requirements to sustain the fund), will have to pay to the retirement fund $28,000,000.
The retirement fund is severely underfunded, with the only remedies being increase taxpayer contributions, reduce city services or lay off employees.
The city took a step in the right direction this past week when the commission voted unanimously to impose pension cuts for some officers, saving the taxpayers an estimated $1.9 million per year. Unfortunately the examples cited above won’t be affected since the employees are already vested.
Still, thanks to the efforts of Mayor Jim Cason, Commissioner Frank Quesada and City Manager Patrick Salerno, the City Commission has set Coral Gables on a path of fiscal responsibility.
But throughout South Florida, many cities are facing similarly bloated pension programs. Will those cities take heed?
When renegotiating any union contracts, conflicts of interest beset public servants when they become professional politicians through multiple reelections. In the words of Thomas Jefferson: “Whenever [elected officials] might be reelected, they would be casting their eye forward to the period of election [however distant] and be currying favor with the electors and consequently depend on them... They should return to the mass of the people and become the governed instead of the governors, which might perhaps keep alive the regard to the public good that otherwise they be induced to forget…”