Pension Plan Reform: the First Step

                                            

Pension plan liabilities are loading states and cities all over the country with huge debt burdens but because of the sacrosanct nature of public service employee contracts, politicians can see no solution other than raising taxes on those who do not enjoy such generous pensions. A first step in reforming the pension systems would be to freeze benefits for all participants in the plans who are not covered by these sacred union contracts, and offer them 401k type defined contribution plans.

There is no contractual reason for elected officials, political appointees, and high paid non-union employees to continue in these plans. Removing them from participation will eliminate a real conflict of interest. How can there be significant pension reform until the legislators and political appointees who negotiated these generous union plans no longer share in the benefits and concessions they gave to the unions. 

My home state of Connecticut provides a good example of egregious excess in the distribution of pension benefits. Just last year Democratic Governor Dannell Malloy appointed two sixty-six year old Democratic operatives as judges on the State’s highest court. The two will be eligible to receive pensions of $100000 per year at age 70 after serving just four years on the bench. It takes approximately $2,500,000 earning 4% to provide an income of $100000 per year.

There was no union contract requiring this incredibly generous pension benefit. It has just been a traditional way to reward friends in high places. In this case, however, public outcry caused the Governor and the Legislature to act almost overnight and alter the pension benefit formula for future judicial appointees. Still, the damage had been done. During his first term the Governor added about a dozen Democratic lawyers to the State’s judiciary. All will enjoy extremely generous pensions after relatively short periods of employment.

The high paid administrators of Connecticut’s University system are also included in the State’s pension system even though they are not covered by union contracts. There is no sacrosanct contractual reason to provide football and basketball coaches whose total compensation exceeds $2,000,000 per year with pensions. Actually, in 2011 a study showed that the top ten pension recipients in the State were all associated with the University of Connecticut, especially its health center and medical school. They were all drawing pensions in excess of $200000 per year, with the highest being about $272000.

Finally, all elected state legislators and their staffs are included in the State’s pension system even though they are not covered by any union contract. It is true that legislators are considered part-time employees and only make about $35000 per year in salary. But there is a pot of gold at the end of their rainbow. During his first term Governor Malloy appointed a number of Democratic legislators to high paid positions in his administration.

These appointments will eventually double and perhaps even triple the pensions they would have received if they had stayed in the legislative branch. A good example is Andrew McDonald, a lawyer and political friend of the Governor’s from their hometown of Stamford. McDonald left the legislature to take a high paying job in Malloy’s new administration. He was subsequently elevated to the State’s Supreme Court where he will be eligible for a six-figure pension upon retirement. If he had stayed in the legislature his pension would have been a percentage of his $35000 salary.

How will it be possible to reform the State’s pension system when the people who are supposed to be representing the public share in all the benefits they confer on the unions? People regard these union contracts as sacred obligations but the legislators and their staffs knew they every concession they made in the past to the union negotiators would benefit themselves or their own family members.

They cannot be part of the pension liability solution as long as they are part of the problem.

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Cardinal Egan R.I.P.

                                          

Cardinal Edward Egan passed away last week of a heart attack at the age of 82. Before his retirement as Bishop of the Archdiocese of New York, he had been Bishop of my home Diocese of Bridgeport in Connecticut. The front-page story in the Bridgeport newspaper listed his considerable achievements during his tenure from 1988 to 2000, but did not fail to point to his failings and shortcomings in dealing with the crisis in the Bridgeport Diocese over clerical sexual abuse of children.

The paper has hounded Cardinal Egan for years and has incessantly blamed him for his failure to expose and punish priestly sexual predators. Even in the article today, the first person interviewed has long been a critic of Egan’s behavior as Bishop in dealing with the crisis. I believe that Cardinal Egan got a bum rap in the Bridgeport court of public opinion.

I did not know him personally but before dealing with the charges against him, I would just like to say that on every occasion when I heard him speak, he impressed me as a person not only of great speaking ability, but also of the kind of intelligence and character sorely needed in the Church. Whether giving a homily at Mass, speaking in a gym packed with boy scouts, or addressing a small group of concerned Catholics, he spoke effortlessly and well, and always fit his words to the group. On one occasion, I attended a meeting where he addressed a small group on the subject of St. John Vianney, the famous Cure d’Ars, a nineteenth century humble French priest who is now the patron saint of all priests.

Although he had an obvious liking for the Cure d’Ars, Bishop Egan’s outward appearance seemed just the opposite. In public he looked and acted the part of a Prince of the Church. In addition to his intelligence and speaking ability, his formidable stature set him apart. He did not seem to be a man to mess around with. Perhaps this was one of the reasons why so many disliked him.

For most of my life in Connecticut I was a financial planner, and in the course of time acquired a handful of priests as clients. Occasionally, one or two would drop remarks indicating a real dislike of their bishop. Apparently, he was a hard taskmaster and would brook no nonsense in seeming contradiction to his easygoing predecessor.  I got the impression that before Edward Egan became Bishop of Bridgeport the priests of the Diocese were pretty much free to call their own shots and do as they pleased, something that in my opinion was at the heart of the sexual abuse crisis.

When Edward Egan became Bishop of Bridgeport in 1988, he inherited the problem. He did not cause it.  Today, we can look back and say that he succeeded in eliminating the problem. Practically all the priestly sexual abuse incidents occurred during the terms of his predecessors. The problem virtually ceased to exist during his tenure from 1988 to 2000. For all events and purposes he stopped the abuse.

Critics may complain about his methods. It is true that he might not have been as sympathetic to some claimants as they would have liked. On one occasion he said. “Claims are on thing. One does not take every claim against every human being as a proved misdeed. I’m interested in proved misdeed…Claims are not of interest to me. Realities are.” He seems to have believed that people were innocent until proven guilty.

At the height of the sexual abuse crisis the Catholic Church in America commissioned an independent study by the John Jay Police College in New York. The study concluded that sexual abuse claims had been made against less than 2% of Catholic priests. This conclusion was largely lost sight of by those in the media and entertainment industry who liked to paint all priests and religious as sexual predators. The media, that never failed to accuse Church leaders of a lack of transparency, consistently neglected the John Jay report.

Moreover, I do not know if anyone has ever figured out how many of the claims were fraudulent or unproven. Although any Catholic would recoil with horror at even one case of priestly abuse, any reasonable person would have to say that a percentage of the claims were not legitimate, especially since many of the claims detailed abuses that were alleged to have occurred thirty or forty years in the past.

Was it unreasonable for the Bishop to be skeptical of some of the claims that could destroy not only careers but also the lives of the accused? After all, there was big money involved. Eventually, the diocese paid out $36,000,000 to settle the claims. Of that amount I guess that one third went to the attorneys, one third to governments in the form of income taxes, and only the balance to the victims of the abuse.

Yes, there were cases of real sexual abuse and thankfully most of the predators were punished in one way or another. Before critics point their fingers at Bishop Egan, however, they should point them at themselves for their refusal to recognize the true nature of the predators. Inevitably the guilty priests are called pedophile priests, but the great majority of them were not pedophiles. By definition pedophiles prey upon pre-pubescent children of both sexes. The John Jay study indicated that around 90% of these predators were not pedophiles, but rather homosexual men who preyed upon teen-age or post-pubescent boys.

Now, most homosexual men do not abuse teen-age boys but the fact remains that the great majority of priestly abusers were homosexual. I remember years ago when popular talk radio host Don Imus banned the religion editor of Newsweek magazine from his show because he dared to suggest that the problem priests were homosexuals and not pedophiles.

So, what’s the difference? Back then psychiatric experts believed that pedophilia could not be cured, but that homosexuals could at least be treated, and hopefully reformed. I suspect that Bishop Egan was not only following the demands of his conscience in seeking to salvage the lives of men who had done wrong, but also following the guidance of the psychiatric experts of the time.

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