And if police pensions are headed for disaster, they will probably take the rest of the country with them.
Police pensions are underfunded but voters defend police pensions. That doesn’t make police pensions safe. Those same voters will vote down the draconian taxes required to fully fund the police pensions. It just means that nothing will be done about pensions until it is too late to do anything about it.
Conservatives reading about underfunded police pensions know that it will lead nowhere good. What happens if the Federal Government “bails out” the police pension by federalizing the police—the goal of many progressives?
The Wall Street Journal reports, “Ill-funded Police Pensions Put Cities in a Bind.”
When the city of San Jose had trouble affording services such as road repair and libraries because of the cost of police pensions, it obtained voter approval to pare them. What happened next proved sobering for other cities in the same pickle. Hundreds of police officers quit. Response times for serious calls rose.
Faced with labor-union litigation, San Jose this year restored previous retirement ages and cost-of-living increases for existing police officers, and last month it gave them a raise.
Police pensions are among the worst-funded in the nation. Retirement systems for police and firefighters have just a median 71 cents for every dollar needed to cover future liabilities, according to a Wall Street Journal analysis of data provided by Merritt Research Services for cities of 30,000 or more.
The combined shortfall in the plans, which are the responsibility of municipal governments, is more than $80 billion, nearly equal to New York City’s annual budget.
Broader municipal pension plans have a median 78 cents of every dollar needed to cover future liabilities, according to data from Merritt. The 100 largest U.S. corporate pension plans have 85% of assets needed on hand, according to Milliman Inc. data as of March 31.
And yet any attempt to bring police pensions into line with today’s municipal budgets and stock-market performance runs into the reality that many officers won’t stand for it—and they often have the public behind them.
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