New York City Sanitation Worker’s $285,000 Pension Is More Than Twice His Salary

February 21, 2018 1:15 pm Last Updated: February 21, 2018 1:15 pm

After nine years of legal wrangling and 10 Freedom of Information requests from the nonprofit Empire Center, the New York City has finally released a roster of retirees receiving reimbursement for service to the city.

What those records show might shock some people.

One former Sanitation Department official brings in $285,047—a pension paid to him by New York taxpayers—even though that is more than twice what he earned as a salary.

The Empire Center, which calls itself “an independent, nonpartisan, nonprofit think tank” with the mission of “promoting public policy reforms grounded in free-market principles, personal responsibility, and the ideals of effective and accountable government” fought for two years to get a full listing of the people getting pensions through the New York City Employee Retirement System (NYCERS).

“The long list of six-figure pensioners in the New York City Employees’ Retirement System shows just how great a burden the city has placed on its finances,” Tim Hoefer, executive director of the Empire Center, told the New York Post.

“Pensions like these are unheard of in the private sector—and deserve the close scrutiny of taxpayers,” Hoeffer added.     

Twice His Salary

The poster child for what’s wrong with the program is 86-year-old Eugene Egan, who worked as the Sanitation Department’s director of public relations.

When he retired in 2015, his salary was a respectable $128,189 annually.

His annual pension payout, $285,047 is more than twice that. Gratitude for service rendered is fine—no one wants to see elderly people living in poverty after working all their lives.

Eugene Egan didn’t do anything dishonest to earn that big a pension. He started working for the city before 1973 and was thus eligible for the best pension program the city offered at that time. He worked for the city for 60 years, so unquestionably he deserves both respect and recompense.

On top of that Egan paid extra cash into his pension fund, to increase the payout. Nothing wrong with wise investing.

(commons.wikimedia.org)
Eugene Egan didn’t haul trash—he handled public relations.(commons.wikimedia.org)

When the Post interviewed Egan on Feb. 20, the ex-sanitation worker became defensive. “You’ll go ahead and say I’m ripping off the city ’cause I got a pension,” Egan told the Post. “The fact is that I worked almost 60 years for it.”

Eugene Egan is not being accused of anything inappropriate—he just happens to be the perfect example of a pension program, which needed some reform, and to some extent got it.

The Tier-One pension program in which Egan enrolled is no longer offered. Nowadays the average pension for a sanitation worker is $49,405, according to the Empire Center.

A New York City Sanitation truck cleans up some of the tons of trash left by the revelers attending the New Year’s celebration January 1, 2005 in Times Square in New York City. (Stephen Chernin/Getty Images)
A New York City Sanitation truck cleans up some of the tons of trash left by the revelers attending the New Year’s celebration Jan. 1, 2005, in Times Square in New York City. (Stephen Chernin/Getty Images)

Teachers Are Underpaid—Until They Retire

The Empire Center also found that New York City teachers often collect hefty pensions.

After winning numerous lengthy legal battles, the Empire Center was able to publish data from the New York City Teachers’ Retirement System (NYCTRS). According to those documents, 795 teachers and school professionals who retired during 2016 with at least 30 years of service credit received pensions that averaged $66,158 during 2017.

However, many received much more than the average. As the New York Post reported. More than 3,000 retirees drew pensions of more than $100,000 in 2017, and 46 brought in pensions of $200,000 or more.

Nine former educators drew pensions of over $300,00 and five collected over $400,000.

As with Eugene Egan, the teachers who signed up early and stuck with it got the biggest rewards.

Edgar McManus, 93, a retired Queens College history professor, earned $561,286 in 2017. He taught for 50 years, which is amazing—and his last salary was a very respectable $116,364. As a retiree, he is bringing down more than three times that amount every year.

“We can’t say exactly what was responsible for the jump, but it’s a trend we’ve seen across the state where taxpayers are on the hook for an increasing number of six-figure pensions,” Empire Center analyst Ken Girardin told the Post.

Girardin pointed out that most private sector pensions, public pensions in the city and the state “aren’t fixed and often rise from cost-of-living adjustments.”

Improvements Still Needed

While the super-sweetheart deals might no longer be available, some people think the entire pension system needs a review—and an overhaul.

“Pension costs are now a $10 billion expense in the city budget,” Citizens Budget Commission Vice President Maria Doulis told the Post.  “This is sweet for the retirees. A little bitter for the taxpayers.”

She said the city should move toward a defined contribution system, like a 401(k) plan, instead of its current system.

That $10 billion figure might or might not be a little high. The Empire Center has published the entire list of NYCERS pensions at its SeeThroughNY website. The total paid out in 2016 was $3.8 billion according to that site.

From NTD.tv

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