It refers to cases where public sector workers get big raises in the years immediately before retirement to get larger pensions than otherwise.
“This inflates the pension payments to the retirees and, upon retirement of the ‘spikee,’ transfers the burden of making payments from the employee’s employer to a public pension fund,” as Wikipedia points out. “This practice is considered a significant contributor to the high cost of public sector pensions.”
Though some states have passed laws to make it more difficult, pension spiking still is commonplace.
Does it happen in our neck of the woods? You bet it does. In our case, a shrinking, small population — and tax base — make our share of the burden worse.
I worry about abuses of pension spiking because of the conflicts of interest inherent in a small town: People who are the “watchdogs” of other people also are their friends. Too often, arm’s length relationships are back slapping ones.
Unlike double dipping — drawing a government pension for one job while also working in the government at another — we can better control pension spiking without passing new laws.
This is all the more reason to have a citizen financial oversight group, such as the one that Nevada City is proposing to disband. With a lot of retired business people and CPAs around, the expertise can’t hurt.
It also could help City Hall continue to recoup from its reputation for being “asleep at the wheel,” which it was. All the meetings are public, and the council has the final word.
We need to work collectively to wring out the excesses of government. We can’t afford it.