The Rubin Plan: Reforming Philadelphia’s Pension System
The abuse of the Deferred Retirement Option Program (DROP) by elected officials isn’t the only problem that our pension system faces. Fortunately, there are some very simple reforms that can be enacted that will end other abuses like “spiking” of employee pensions and help restore the fiscal health of the pension fund.
As councilman, Bill Rubin will place three reforms at the top of his agenda for reforming Philadelphia’s pension system.
Put an end to pension “spiking”
Because pensions are calculated based on the final years of compensation, the system can be gamed by giving public employees promotions during their last years with the city and increasing their lifetime pension checks to a level significantly higher than an employee would otherwise have received. This is known as “spiking,” and it is a drain on our city’s pension fund.
As councilman, Bill Rubin would work to enact legislation that would end spiking by putting a 10% annual cap on salary increases in the final three years of a public employee’s service, for the purpose of calculating lifetime pension benefits.
Bill Rubin would work with the municipal unions, pension board, and city council to put an end to pension spiking.
Elected officials and workers should be on same pension plan
In 1987 city council created the “L” pension plan, which gave them better benefits, more money, and a lower retirement age. At the same time, city council raised the retirement age for police, fire, and municipal workers and lowered their monetary benefit.
Elected officials should not have a pension plan that is separate from rank-and-file city workers. If our city’s politicians want to argue that they are no different than other city employees and are entitled to DROP, then they shouldn’t have different pension plans than city employees.
No government buy-back for non-military workers
The current rules of our pension program allow workers to convert pensions at any time from city, state or federal positions, as long as they are not vested in another plan.
Bill Rubin would end this practice and only leave it in place for military pensions.