OTHER BENEFITS


OVERVIEW

In addition to pension benefits, most states and local governments offer other post-employment benefits (OPEB) to their retirees.  While this includes a number of kinds of non-cash benefits, by far the largest component is retiree health care: insurance coverage for retirees not yet eligible for Medicare, and Medigap coverage and premium assistance for retirees sixty-five and over.

While the roughly $3 trillion funding gap in public employee pensions gets a lot of attention, OPEB benefits are often overlooked. But the funding gap here, too, is substantial—likely in the range of $1 to 1.5 trillion. Overall, retiree health benefits are a much smaller obligation than pensions, but many governments do not pre-fund OPEB or only recently started doing so, meaning the obligation is almost entirely unfunded... continue reading >>

 

FORUM

A new report by New Jersey's State Commission of Investigation exposes a common practice of "official" or "release" time and has rightly made headlines. See here, here, here, here, and here. The practice entails paying public employees to work for their union. Over a five year period, the report found, the Garden State paid more than $30 million for public workers to conduct union business.
Be sure to catch the opening statements in this week's PublicSectorInc.org online debate at 12pm today. Throughout this week, Manhattan Institute senior fellow Dan DiSalvo and University of Toledo professor Joseph Slater will be debating whether "dues check-off" and "agency shop" - two unique fund-raising mechanisms enjoyed by public sector unions - are in the public interest. Share your thoughts about their posts in real-time by using the "comment" feature found on the online debate page. Also, submit one question that you would like to see them debate by sending an email to psi@manhattan-institute.org. We will select one question from the audience, which will be debated on Wednesday, April 25, so start thinking of your submissions now. With the impending recall election of Wisconsin Governor Scott Walker coming-up on June 5, this issue is of critical importance to better understanding how public unions and the public interest intersect in American politics.
In my Wall Street Journal op-ed on Stockton last Saturday, I observed that the city's current officials have admitted that Stockton got into its problems by making promises to employees that nobody bothered to add up at the time they were made, and by cutting deals for compensation that often hid the true cost of employee pay.

Stockton admitted that its biggest problem has been a lack of transparency resulting in a host of "hidden costs" in labor agreements for "obligations that are often difficult for citizens to identify or understand."
While one can never get too confident in the reformist promises of Los Angeles Mayor Antonio Villaraigosa, it seems unlikely that the Democratic chief executive of America's second-largest city would pick a fight with public employees just for sport. And with the City of Angels facing a $220 million budget deficit, Villaraigosa is beginning to talk tough about a substantial increase in the retirement age for the city's new hires.
"Release" or "official" time is the innocuous sounding name for governments paying the salaries of public employee union officials. George Will's column yesterday hits the tip of an iceberg. He relies on a report from the Goldwater Institute, whose investigative work uncovered that the City of Phoenix is paying the $900,000 annually to the officers of the Phoenix Law Enforcement Association (PLEA), the police union. These monies pay them to work exclusively on union business, including lobbying. In addition, the officials of the six other public employees unions in the city also have full-time city jobs. The total annual bill annual for release time is $3.7 million. And this is in a weak union state. This is not the only way that cities and states can pay for union officials...

 

 

 

 
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PSI ARTICLES

Wisconsin Shows What Ohio Can Gain from SB-5 Josh Barro, Nov 07, 2011
Pension Reform for Public Workers Outside Social Security Josh Barro, Mar 29, 2011


RESEARCH


more research on other benefits >>


ARTICLES

Public vs. Private Retirements Josh Barro, E. J. McMahon, New York Post, 12-19-10
The Beholden State Steven Malanga, City Journal, Spring 2010

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PODCASTS

Nicole Gelinas talks with Josh Barro about public-sector workers and their retirement plans
Josh Barro talks with Andrew Biggs about his PSI article, "Valuing Job Security as a Public Employee Benefit"

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