Another Government “Cut” that Costs More

In time of a recession, bonuses come under fire for some government pension plan employees. No problem: the pension system will just give them raises instead:

Most employees at the Missouri State Employees Retirement System will get their last bonuses this month. The annual incentives, which drew sharp criticism from Gov. Jay Nixon, are being discontinued.

But under a proposed new pay plan, the workers wouldn’t lose much money when the bonuses disappear. On July 1, when the state’s new fiscal year begins, MOSERS staffers would receive raises worth 90 percent of their average bonuses the last three years.

A compensation committee made up of MOSERS board members voted 3-1 Friday to recommend the plan. The full 11-member Board of Trustees will consider it later this month.

Gary Findlay, MOSERS executive director, said afterward that it would be incorrect to say employees would get raises under the new plan. “Actually, they’re getting a cut” since only 90 percent of their bonuses would be rolled into base pay, he said.

Only a longtime government employee, long enough to get to directorship of a government pension plan, would be audacious enough to try to convince citizens this is a cut. However, by “cutting” this money into a base pay rate, Mr. Findlay is also ensuring that this money is “cut” into base pay increases in the future (that is, the percentage increases will be greater since this 90% becomes part of the salary that the percentage increase is part of) and this money will “cut” into the amount of money used to calculate the pensions of employees (which is based on base salary when the employee retires).

The government is the only place in the world where cuts cost more money than non-cuts.

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