They’re not bad people, those police and firefighters in Schenectady (and many other municipalities) who pad their pensions in their final years by loading up on overtime. They’re just taking advantage of a bad system. There is a simple, and perfectly fair, remedy: Eliminate overtime from the pension calculation and calculate solely on base pay, as California and some other states have done.
As a story by Gazette reporter Kathleen Moore on Sunday showed, some Schenectady police and firefighters were able to use overtime to get a pension that exceeded their base salary.
This isn’t what pensions were intended to be, a stipend that, in combination with Social Security, would allow someone, after a lifetime of work, to have a dignified retirement. The idea was never to have people who are no longer working make more money than when they did, at taxpayer expense. In recent years, rising pension costs have been driving many municipalities and school districts toward fiscal insolvency.
Gov. Andrew Cuomo in 2012 instituted a reform that will help, limiting the amount of overtime that can be used for pension calculations to 15 percent of base salary each year, rather than 20 percent of the previous year’s total salary, including overtime. Unfortunately, the effect won’t be felt for many years, because, per the state constitution, any reduction in pension benefits can apply only to newly hired workers.
Unless the constitution is amended (worth trying, but very hard politically), the same limitations would apply in not counting overtime at all for pension purposes. That doesn’t mean it shouldn’t be done. Until then, municipalities must do everything they can, through management practices and contract negotiations, to limit overtime.