Tag Archives: Mercatus Center

How Free is Your State?

State Freedom Rankings

Thousands of federal retirees get 6-figure pensions

Reason #1,666 why Amerika is broke.

Dennis Cauchon reports for USA Today, Aug. 15, 2012, that more than 21,000 or 1.2% of retired federal workers receive lifetime government pensions of $100,000 or more per year. Of these, nearly 2,000 have federal pensions that pay $125,000 or more annually, and 151 take home $150,000 or more. Six federal retirees get more than $200,000 a year.

By comparison, here are the percentages of other retirees who get pensions of $100,000 or more:

  • 0.1% of military retirees
  • 0.2% of the New York State and Local Retirement System
  • 0.4% of the New Jersey retirement system
  • Comparable private figures aren’t available.

Federal retirees receiving 6-figure pensions spread across a broad swath of the federal workforce: doctors, budget analysts, accountants, public relations specialists and human resource managers. Most do not get Social Security benefits. Those receiving $100,000 or more in federal pensions icnlude:

  • Law enforcement, the most common profession receiving 6-figure pensions, including 326 Drug Enforcement Administration agents, 237 IRS investigators and 186 FBI agents.
  • 714 from the U.S. Postal Service.
  • 444 from the Social Security Administration
  • A retired Smithsonian zoologist has a $162,000 annual lifetime pension.
  • The six $200,000-plus pensions include a doctor, a dentist and a credit union regulator, plus three retirees whose occupations weren’t listed.

Pensions are a growing federal budget burden, rising twice as fast as inflation over the last decade. Pension payments cost $70 billion last year, plus $13 billion for retiree health care. Taxpayers face a $2 trillion unfunded liability — the amount needed to cover future benefits — for these programs, according to the government’s audited financial statement. (Read: The Truth About the Post Office’s Financial Mess.)

“These people are highly trained, highly skilled and often put their lives on the line in law enforcement,” says Julie Tagen, legislative director of the National Association of Retired Federal Employees. “It’s a very, very small portion of retirees at that ($100,000) level.”

“Government pensions are vastly more generous than those in the private sector,” says economist Veronique de Rugy of the market-oriented Mercatus Center. “It’s no coincidence that if there is a good plan, it’s available to federal employees rather than in the private sector.”

USA TODAY and the Asbury Park (N.J.) Press— both owned by Gannett — analyzed the Civil Service Retirement System database, obtained under a Freedom of Information Act request. The Office of Personnel Management withheld some information, including names, ages and length of service.

The records cover 1.9 million federal civilian pensions. Congress members were not included, nor were military retirees.

The average federal pension pays $32,824 annually. The average state and local government pension pays $24,373, Census data show. The average military pension is $22,492. which has one of the best remaining private pensions, pays an average of $18,250 per retiree, Labor Department filings show.

The federal government has two retirement systems: one for those hired before 1984 and another for those hired after. Under the older system, employees did not participate in Social Security. The older system covers 78% of current retirees and accounts for 96% of 6-figure pensions. All federal retirees receive health benefits.