NBC Super-sized pensions

In New York, a 44-year-old firefighter retires with a $101,000 a year pension, for life. Near Chicago, a parks commissioner quits and begins collecting a $166,000 pension – a sum sweetened by $50,000 thanks to a one-time retirement year windfall of $270,000. And in California, a former city manager pulls down $500,000 in retirement checks every year....

Wall Street analyst Meredith Whitney correctly predicted the need for a government bailout of banks three years ago, so people listened in September when she forecast who will be next to beg for a federal bailout: States like California, New Jersey and Ohio. State and local governments have effectively run up huge credit card bills, and soon won’t even be able to make the minimum payments on that debt. What happens then? Middle America, Whitney predicted in a report called “Tragedy of the Commons,” might revolt at the idea at bailing out coastal states for years of mismanagement and overspending.

A Ponzi scheme?
In truth, pension systems rely on what might be considered an accounting trick, not unlike the trick which keeps the Social Security system afloat for now. While state workers contribute payments to the system – typically about 5 percent of their salary -- and those payments are matched by government employers -- about 10 percent -- those payments scarcely cover the eventual payouts.

“You can never pay enough to pay for your retirement,” Tom said.

In fact, "defined benefit" pension plans make no direct connection between the worker's contributions and the benefits enjoyed later. Pension systems hope for large investment gains during a worker's career – in many states the calculations project an annual return of around 8 percent, a fantasy -- but really rely on the

Sacramento has published Encinitas pension payouts online, here.