Pensioners Over Pay

On Sunday, I looked at aggregate data for Rhode Island public-sector retirees who are making more in retirement than they did while working. Aggregate data doesn’t really capture (or humanize) the matter, which justifies presentation of the numbers from the perspective of individual pensioners (while striving to be respectful of the individuals involved).

The following graph shows the gross pensions (base pension plus cost of living adjustment [COLA]) and the amount that it exceeds final average salary for the 3,298 retirees in this group as of 2010.


As the previous post in this series pointed out, the average pension for this group is $45,815, which averages $6,338 above final average salary. Some other noteworthy averages are as follows:


All Retirees Retirees over Salary Top 50 Retirees over Salary
Age at retirement
Years retired
Final average salary
Base pension
COLA payment
Gross pension


Although, as I showed in the previous post, the trend lines aren’t as one would expect (with those retired for fewer than 20 years more likely to have pensions greater than their salaries than those retired for more than 30 years), it isn’t surprising that, in general, those whose pensions compare favorably with final pay have been retired for longer.  It is also not surprising that COLAs play a role in pushing pensions above pay.

It is very much worth noting, however, that COLAs don’t provide the whole story.  The generosity of the pension deals is also critical.  Among all retirees, the average base pension is 54% of the average final salary.  Among retirees who’ve exceeded their salaries, it’s 69%, and among the top 50 such retirees, it’s 95%.  Once again, it isn’t unreasonable to suggest that including  “earned benefits” in reform efforts shouldn’t be of the table.



By way of a disclaimer, I should note that, at the level of the individual retiree, some results are so conspicuous that they may indicate errors in the state’s data.  In the graph above, for example, sixteen or so retirees can be seen to have pensions that are almost entirely made up of money that is above and beyond their final salaries.  If that is not database error, the state should surely investigate.  However, for our purposes, such results number so few that they can’t skew the overall findings but so much.

While I’m making notes:  another interesting objection that I’ve heard is that some of the retirees in the database are shown to have retired at very young ages — as young as two years old.  This actually does not appear to be an error, generally speaking, but rather, the result of survivor benefits or something similar.  The two-year-old retiree, for example, can confirmed to be a young lady living in Woonsocket (or at least to have the same name).  Another child is listed as retiring the same year as her school-teacher mother passed away (as can be confirmed online).  Whatever the case, of the 26,598 retirees for whom we have data, only eight retired before age 20 and only 53 retired before age 30.

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