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Expert: Geddes’ possible pension-spike shows unfair system, ‘entitlement mentality’

Expert: Geddes’ possible pension-spike shows unfair system, ‘entitlement mentality’

Dustin Hurst
May 27, 2015
Author Image
May 27, 2015
Steven Greenhut, left, warned about pension-spiking abuse by Idaho officials.
Steven Greenhut, left, warned about pension-spiking abuse by Idaho officials.

Pension-spiking by former state lawmakers reveals an unfair system and an “entitlement mentality,” said one national public pension expert.

Steven Greenhut, columnist for the San Diego Union Tribune and author of Plunder: How Public Employee Unions are Raiding Treasuries, Controlling Our Lives and Bankrupting the Nation, told IdahoReporter.com pension-spiking hurts taxpayers, who typically don’t understand the practice.

“I don't think people really understand pension spiking, but it's easy to explain: Government officials game the system so that they can inflate their final salary and retire with lots more public dollars,” Greenhut wrote in an email.

His comments came just days after former Republican Sen. Bob Geddes accepted a high-paying job leading the Idaho Department of Administration. If Geddes holds the post for at least 30 months, he will spike his public pension by a whopping 559 percent.

Pension-spiking tactics vary nationwide, but Idaho’s most common method works like this: Lawmakers serve long careers in the Idaho Legislature, earning roughly $18,000 annually. A lucky few then win appointments to high-paying state jobs, earning close to six figures. If they hold the jobs for more than 42 months, the official threshold for determining pension payouts, their yearly retirement income surges.

If they meet the 42-month requirement, the state counts all their public work as full-time at the higher rate of pay -- including the part-time legislative service.

Greenhut further blasted the practice. “It probably doesn't mean much in terms of overall dollars,” he wrote. “But spiking does reinforce the unfairness of the system and the games-playing of officials who tend to have an entitlement mentality.”

IdahoReporter.com calculations estimate Geddes could boost his pension by more than $32,000 a year if he clears the bar. In total, his pension could amount to $37,000 annually.

If Geddes had simply retired from the Legislature, he would have received a few hundred bucks a month.

The arrangement, Greenhut intimated, smacks of elitism. “It’s the type of thing not available to the poor working schlubs in the private sector,” he wrote.

Greenhut isn’t the only critic sounding the alarm.

Scott Moody, chief executive officer of spending watchdog State Budget Solutions, warned taxpayers about the practice. “The Idaho pension system is already on an unsustainable funding path and abuses like spiking only compound the problem,” Moody wrote last week.

Idaho Freedom Foundation President Wayne Hoffman blasted the practice in an editorial published Monday in the Idaho Press Tribune.

“This special privilege for elected officials allows them to score a lucrative benefit at the expense of the taxpayers they were elected to serve,” Hoffman wrote. “Suddenly our ‘public servants’ aren’t serving us as much as we’re serving them by guaranteeing an exclusive retirement package.”

Geddes is hardly the only lawmaker to benefit. Earlier this year, Gov. Butch Otter appointed Democrat Elliot Werk to the Idaho State Tax Commission oversight board, a high-paying post. Former Idaho House Speaker Lawerence Denney, R-Midvale, blocked a bill to end pension-spiking and then won the 2014 race for the secretary of state job, which pays well, too.

Idaho Senate leadership sidelined a bill to end pension-spiking earlier this year.

Note: The Idaho Freedom Foundation publishes IdahoReporter.com.

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