Much has already been written about run away public employee union pension and healthcare costs that are burdening cities and counties nation wide.  One aspect of many these pension plans–the “disability” component–proves that if you incentivize certain behaviors, you get more of them.  In this case, the law has long allowed certain public employees (generally police and firemen) to claim they are disabled when they retire.  One key benefit of claiming disability is that 50% of your retirement payments are received tax free.  This incentive has now caused alarming numbers of public safety employees to retire claiming disability.  In Fresno, an average of 37% of all retirement payments made are to retired employees with disability benefits.  Not only are they receiving taxpayer funds in retirement but they are also receiving a huge chunk tax free.  To boot, many seek post-retirement employment with neighboring cities and counties (so called “double-dipping”).

The most egregious example of this is the former city of Bell police chief Randy Adams.  When Adams left the Glendale PD he filed for a standard pension, but he late rescinded it and worked for the city of Bell who had him declared “disabled” even as they hired him.   Adams was paid more than $467,000 a year in Bell, more than double his salary in Glendale, even though the Bell police department only had around 20 officers.  At retirement, he is to receive a pension of approximately $400,000 a year, of which $200,000 will be tax free.

Historically, disability pensions were designed for employees who must give up a job because of work-related injury.  The 50% tax benefit was intended to compensate them for lost earrings as a result of this early retirement.  Unfortunately, it appears that was once a well-intentioned law has been exploited and abused–simply because of the ease at which it can be done