Paul L. Caron

Tuesday, October 7, 2014

Retired CUNY Professor Gets $560k/Year Pension: 'Darn Right I Deserve It'

New York Post, Retired CUNY Professor Gets $560K a Year Pension:

He’s New York’s pension king.

Retired Queens College history professor Edgar J. McManus, 90, gets a city pension of $561,286 a year, newly released figures show. His payout is the highest by far in both the city and state teachers retirement systems, according to data obtained by the Empire Center for Public Policy, an Albany-based think tank. ...

The city’s second-biggest pension, $308,358, goes to Alvin Marty, a Baruch College economics professor who retired after 55 years in 2008. Fifteen other retirees collect more than $200,000 a year — including city Schools Chancellor Carmen Fariña, who gets $208,506. And 1,796 retired educators get more than $100,000 a year. ...

McManus, who has written groundbreaking books on slavery, retired in February 2012 after teaching history and constitutional law for more than 50 years. His final salary was $116,364. “They don’t pay you much when you’re working, but the pension is certainly good,” McManus told The Post. “Darn right I deserve it.”

With his World War II military service added in, McManus was credited with 61 years of service for pension purposes. His pension is based on 1.2 percent of his final salary for each year before 1970, 1.53 percent for each year after 1970, and accounts amassed with investments of his own and city contributions. His payments are also bigger because he retired so late in life.

(Hat Tip: Glenn Reynolds.)

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A little pension math--this guy has been working for 50+ years and he's now 90 years old.

If he had been paid a little bit more--say consistent with private sector salaries--and contributed $1,500 per month to a retirement account growing at 7% per year (compounded monthly) for 50 years, he would have more than $8 million dollars in his retirement account.

At a 7% return, that can generate $570,000 in income per year without even touching the principal. But when this guy dies in a few years (he's 90) he won't have drawn down anywhere near that amount, and even with survivorship benefits, his spouse / family is going to be worse off than if he'd been working in the private sector and putting his extra earnings into in a good indexed mutual fund or ETF which his family could inherit.

I know the point of the think tank, the article, and the taxprof post is to attack public sector workers and their big fat pensions, but if you run the math, working in the public sector is a raw deal.

Posted by: math | Oct 7, 2014 6:38:13 AM

If these guys are getting annuities at their very advanced ages, the sums are not shocking. McManus at 90 is likely to live only a few years. If there are lengthy guarantee periods,that could be another thing. The devil is always in the details which we, unfortunately, do not have.

Posted by: Bill Turnier | Oct 7, 2014 7:16:15 AM

After federal, state, and city taxes, that comes to about $4,400 of annual pension for each year of service. Hardly a boondoggle.

Posted by: Theodore Seto | Oct 7, 2014 9:39:15 AM

A $500k pension starting at age 88 is much less scandalous than a $200k pension starting at age 50.

Posted by: AMT buff | Oct 7, 2014 10:11:07 AM