Public pensions and their alleged over-generosity have been part of the debate over the broken budgets in Detroit and in Michigan. Lots of folks are saying that major reform is needed in public pensions. Well, with regard to our state employees, the Detroit News fueled the debate some more with an article today about the State Police Director, Col. Eddie L. Washington. http://www.detnews.com/article/20101...llects-pension

The apparently well-qualified Col. Washington was appointed to the director position in May of this year. The position pays $145K per year. Col. Washington has 26 years of experience with the State Police. Interestingly though, Col. Washington "retired" from the State Police just before taking the top job. With his years of service, Col. Washington apparently was eligible to begin receiving a pension immediately. Upon his "retirement", Col. Washington had reached the grizzled old age of, wait . . . . . 48. His monthly pension is, wait some more . . . . $7,100 per month. Don't know what Col. Washington's salary was before being appointed director, but it's a safe bet that he earned well under $100k per year for most of his 26 years.

A little rudimentary math puts some perspective on Col. Washington's pension. At age 48, he has a life expectency of about 30 years. A 30 year income stream of $7,100 per month would require a principal of approximately $1.5 million assuming a ROI of 4%. Assuming the same ROI, a private sector employee would have to save approximately $2,500 per month, $30,000 per year, beginning at age 22 in order to accumulate $1.5 million by age 48. I don't have the statistics, but I have a sneaking suspicion that not very many 22 year old private sector workers are socking away $30,000 anually toward their retirement.

Not trying to denigrate public service, but a $7,100/mo retirement at age 48 is something attainable for probably less than 1% of the private workforce. Is it good public policy to reward public service, of whatever excellence, at such a level? Is it fiscally sustainable?