Cost of Living Pension Increases Must End!

To the Editor:

There has been a lot of controversy about the upcoming town budget and the role that union concessions should play in the balance. Discussions involve pension terms, medical benefits and longevity pay.

The town is clearly in a huge crisis. The current pension commitment is astronomical and health care payments have increased ten-fold in the last 15 years. Any reasonable person must recognize that that those costs need to be reduced.

The most expensive pension factor is cost of living adjustments (COLA).Guaranteed contractual COLA is absolutely insidious. It both compounds the pension benefit and encourages workers, particularly guardians, to retire early.

Union supporters claim their benefits are fair and argue over and over that the town’s promises, however ill conceived and un-manageable, should be “honored”. One guy even suggested that any cuts would be “backstabbing” seniors and that we should consider their copious benefits as deferred compensation.

Many of the town retirees collect long before they are seniors. In fact, it is the senior taxpayers that are bearing much of the burden for supporting young retirees.

Here’s a little analysis of a hypothetical Hamden pensioner who I will call “Bill”. It clearly demonstratesthe horrible impact of COLA:

Bill worked on the Hamden police force for 20 years. He retired 10 years ago at age 45 as a sergeant earning $78,000. He is healthy and has taken new employment in private security.

Bill’s initial pension was $39,000 plus he get’s health care for life. Thanks to COLA, Bill’s pension is now $52,000 and growing 3 percent every year. By the time Bill turns 65, his pension will have increased to more than $70,000.

By then, Bill’s neighbor, who has been struggling to pay Hamden’s exploding taxes for 20 years, will finally be ready for retirement. He worked in the private sector all his life and has no pension. His Social Security is about half as much as Bill’s pension.

By the way, Bill will collect Social Security too and will get nearly as much as his neighbor on top of his pension.

Over the first 20 years of his retirement, Bill will collect $1.1 million from the Hamden retirement fund. If he lives to 80, his last annual payment will be $110,000 and he will have collected $2.4 million in pension benefits over his 35-year retirement. That’s twice as much as Bill earned while he was working! Forty-three percent of his pension comes from COLA. And who knows how much the town will have paid for his medical along the way!

Do you really think this is fair? Do you really think the taxpayers should mortgage the town’s future and threaten our grandchildren to “honor” the extravagant commitment to Bill?

This citizen says NO WAY!

George Levinson
Hamden