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  • Federal Housing Funds Used to Boost CA County Employee Pensions

    California’s Santa Clara County used $16 million in federal housing funds not for affordable housing programs or similar services, but to increase guaranteed pension benefits for county workers. Employees of the county’s Housing Authority can now retire as early as age 50, receive as much as $40,000 annually during retirement, and enjoy 2 percent annual increases in pension benefits.

    The US Department of Housing and Urban Development says the move does not violate the conditions of the federal program, according to an article in Mercury News.

    Santa Clara County’s housing authority could have spent $16 million of federal funds to help more struggling families put a roof over their heads. Instead, it chose to more than double the value of its employees’ retirement benefits.

    That may sound unusual, but federal housing officials say it was an allowable expense. Still, the switch from a 401(k)-style retirement plan to a pension allowing workers to retire early — with guaranteed lifetime payments — is raising eyebrows at a time when generous public employee pensions are under fire…

    Housing authority workers who under the old plan had to wait until they were almost 60 to draw from retirement accounts — which could be shrunk by market losses — can now receive a guaranteed monthly pension check as early as age 50. And they’ll have a guarantee of 2 percent annual increases after they retire.

    CalPERS records show one 66-year-old former housing authority official already is earning a $40,000 pension.

    Most private employers have gone in the opposite direction and dumped pensions for 401(k)s, where employees assume the risk of investment losses in their retirement funds…

    The change in retirement benefits was made possible after the U.S. Department of Housing and Urban Development in 2008 made the housing authority one of 32 Moving to Work demonstration sites. The program allows more spending flexibility to encourage “innovative” approaches that “use federal dollars more efficiently.”

    Posted in Scribe [slideshow_deploy]

    3 Responses to Federal Housing Funds Used to Boost CA County Employee Pensions

    1. mike says:

      This is just another example of the looting of America. I'm tired of people saying we made poor choices to wind up in the fiscal mess we're in. This just another example of legalized theft. Bailouts, subsidies, guaranteed pensions all equal legalized theft. Is it any surprise that gold is going parabolic. I guess you can't just print it.

    2. Sc1243 says:

      I am glad that this story came out. The worst thing is a collective yawn from the public and do nothing to reverse the theft, pretty much as the thieves expect. This is taxpayers' money. It does not matter what the
      Federal agency said, we the people did not give the DHUD the authority to give away our money then said it was legal. We need to fire the DHUD officials who did not object and shut down the Santa Clara Housing authority.
      We need to find the right approach – call and write your congressmen/women, your county officials, governor, and senators, demonstrations in front of the Housing authority doorsteps on TV and publicize the names of the officials who make a perfect retirement gift for themselves. When people are outraged and noisy enough,
      politicians have to listen or risk losing their jobs in the next election. Let's get organized and get back the
      16 millions for the people in desperate need of housing assistance.

    3. Harry Miller says:

      With all the contraversy in each state surrounding pensions and unions screamimg about the situation I don't understand why the unions are not making a big deal about this. These polititions are criminals in my eyes. Shame on them. This money was earmarked for the poor and those scoundrals have stolen that money to line their own pockets with.

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