Some L.A. pensions are so huge they exceed IRS limits, costing millions extra

[TexasTowelie]

Dozens of retired Los Angeles employees are collecting such generous retirement pay that they exceed pension fund limits set by the Internal Revenue Service, saddling taxpayers with additional costs, a Times data analysis has found.

Their lavish pensions forced the city to establish an “Excess Benefit Plan” to pay what the pension system cannot legally cover, using money that could otherwise be tapped to fix sidewalks, fight homelessness or hire more cops.

In all, the little-known fund has paid $14.6 million to 110 retired employees since 2010, The Times’ analysis showed.

The list of recipients is dominated by former cops and firefighters whose million-dollar payouts from a separate retirement program drove their incomes well over the $220,000 annual limit the IRS allows pension funds to pay.

Read more: https://www.latimes.com/local/california/la-me-drop-pension-excess-20181216-story.html

[demosincebirth]

1. That's a huge problem in California. Some cities pay more than

Forty percent of their budget for pensions

[mr_lebowski]

2. Lucky Them. If that's what they were promised/earned, then pay them ...

If there's some kind of tax penalty over $220K, then they need to pay the IRS penalties.

Almost certain that the IRS can't say 'State X, you're not allowed to pay anyone a pension over X dollars!'. That sounds like a distortion of reality.

That said, if there's exactly 110 people (out of many 1000's), it'd be interesting to know ... how they got on the list?