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Pensions as a Path to Wealth?

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A convicted former lawmaker wants his pension restored now that he is out of prison. After pleading guilty to corruption charges in 2012 he served 16 months and was released in 2014. As a result of the felony conviction he was stripped of his pension; but now wants it returned and has appealed to State Employees’ Retirement System to get it back.

 
Two obvious points have to be made. First, why should a person who has violated the law and their oath of office be entitled to a pension, especially for corruption in office? Wrong message, wrong practice. If pensions are still available to law breakers, a major incentive for not breaking the law has been removed. That on top of the very difficult and time consuming job it is to get a conviction in the first place.

 
Second, how is that an elected official ever gets to be entitled to $246,000 a year pension when salaries for legislators are barely a third of that amount? Of course, it is entirely possible because the legislature writes the rules for calculating its own pensions. Little wonder few ever resign voluntarily before they are well advanced in years.

 
The preposterous generosity of the pension plan formula for legislators could be major conflict of interest obstacle to ever achieving meaningful public sector pension reform. That combined with government employee union intransigence on the topic keep the can moving down the road owing to the perennially kicking. Absent an ongoing a substantial increase in investment values and income flows from pension assets, the state employee and school employee pensions will continue to eat up major shares of any revenue growth and lead to fewer employees, smaller raises and less generous benefits.

 
But for those already in the pension plan or retired the time will never arrive when they will support reform. This is one of the worst (if not the worst) problems facing the government in Harrisburg and in a large number of other states.

 
The convicted legislator and the pension he would have received if not convicted is a symbol of much that ails Pennsylvania—and no doubt many other states.

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Allegheny Institute
Allegheny Institute

The Allegheny Institute is a non-profit research and education organization. Our mission is to defend the interests of taxpayers, citizens and businesses against an increasingly burdensome and intrusive government.

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