Buying time-served credit from pension funds isn’t new, nor is it necessarily wrong. For a fee, someone could actually “fool” the pension system into believing they had served more years than actually done.
For the life of me, I can’t understand how the pension fund benefits from this, but they do it.
In San Diego, the former administrator of the county pension system bought five years of extra service. Well, actually his deal was unique. He didn’t buy anything, everyone else bought it for him.
From the San Diego Union-Tribune:
Like many city employees, former pension administrator Lawrence Grissom signed up for a great deal starting in 1999 – he used $116,000 to add five years to his city service record without having to work those extra years.
That boosted his pension by at least $24,000 a year for life.
Unlike any other city employee, however, his purchased service credits didn’t actually cost him anything. Taxpayers picked up the tab.
Read the full article here.