EDITORIAL: The government pension scam to end all pension scams

Below, Review-Journal columnist Victor Joecks explains how Nevada’s public employees sometimes pad their generous pensions by “spiking” their earnings near retirement. But as costly as the tactic is to state taxpayers, it’s nothing like the scam going on in our neighbor to the west.

The Los Angeles Times reported last week that many Los Angeles government employees are making millions off a program that allows them to bank pension payments for up to five years while still working. And to throw salt in that gaping taxpayer gash, it isn’t unusual for participants to go on disability — meaning they get paychecks and pension payouts, all while sitting on the couch.

This massive giveaway is known as the Deferred Retirement Option Plan, or DROP. Depending on whom you ask, the program is intended either to keep top veteran talent from retiring early or to encourage older workers to step aside for cheaper, younger employees. In reality, it’s a sop to the powerful public-sector unions.

The Times report revealed that, in the city of Los Angeles, “those taking disability leave while in DROP missed a combined 2.4 million hours of work for leaves and sick time and were paid more than $220 million for the time off.” Police officers and firefighters were particularly likely to game the system, the paper found. Some 70 percent of firefighters who signed up soon went out on injury leave.

The Times documented one couple — both employed by the LAPD — who entered the program and pocketed almost $2 million in four years in salary and pension payouts, despite the fact that both filed claims “for carpal tunnel syndrome and other cumulative ailments about halfway through the program.” They spent some of their taxpayer-funded leisure time at a condo in Cabo San Lucas, the paper found.

The Times spoke to former Los Angeles Mayor Richard Riordan, a “Republican,” who agreed to put the proposal on the ballot in 2001. The ballot question vowed “no additional cost to the city,” the paper reported, and voters fell for the ruse. “Oh, yeah, that was a mistake,” Mr. Riordan, now 87, told the Times. He later added that the program is a “total fraud.”

In fact, even in progressive California, a number of jurisdictions — including San Diego and San Francisco — have dismantled their DROP programs as costly and wasteful. The public safety unions in Los Angeles, however, apparently enjoy an ironclad grip on the Democratic politicians who run the nation’s second-largest city.

Thankfully, Nevada has no such DROP program. But if there’s any mystery why many cities — and even some states — across the country are nearing a fiscal cliff in the face of mounting public-sector benefit obligations, the ongoing fiasco in Los Angeles provides a ready answer.