A discussion about Hankwitz in Barzil got me thinking about the economics of the PERA retirement and coaches at CU. The short version is that for coaches with time spent coaching at public schools in Colorado (both high school and college) the structure of the retirement benefits for public employees in the state is such that what appears to be a smaller salary can confer huge monetary advantages to coaches when they hit retirement years.
Gary Barnett is actually a good case study for this effect. Basically, public employees receive a percentage of their "high 3" salaries when they retire. The percentage varies according to both how many years spent as a public employee, and what age they are when they decide to start receiving those benefits (which may or may not be the age they "retire" or quit working as a public employee). The higher the number of years they work for the state, the higher the percentage. The earlier they elect to start receiving benefits, the lower the percentage. Between GB's career at Air Academy high school, Ft. Lewis, CU as assistant, and CU as head coach - he worked as a public employee in Colorado for 25 years. Because of that 25 years, he could start receiving benefits as early as age 55 (and without any discount for being under 65). The chart for benefits shows that he gets 62.5% of his average salary for the highest paid 3 years of his career in Colorado (which, of course were his last 3). If my memory serves, he was making around $700k before his final contract which bumped him up to around $1.2MM (but he was fired halfway through that contract). The end result is that he probably receives a public employee retirement benefit in the neighborhood of $500k/year - for the rest of his life.
Tad Boyle is another interesting hire. His numbers aren't quite as favorable, but the economics say he's going to stay for at least 3 years at the higher salary (he's at about $500k/year right now). Presume he stays at $500k for the next three years, and decides to move on elsewhere. When he turns 65, he will be able to draw 25% of his average "high 3" salary as a retirement benefit. $125k/year. Not bad. I think we can safely assume that he will be around through 2015-16 at least.
Presuming Jon Embree stays next year - he would also be in line to receive 25% of his salary as retirement benefit when he turns 65. If he's fired this year, it would be 22.5% of the average of 2 years as HC + whatever he made for 1 year as TE coach. Again, not too shabby.
For Mike Hankwitz, the discussion of whom brought this up, if CU were to bring him back, even for just one year, it would provide around a $40,000/year boost to his retirement income (any time after one year increases that substantially each year). Which means we could pay him below market rates for his services (and we all know how much the current admin loves to do that).
The point of this is not to deride the public employee retirement program (save that for the politics forum), but rather to point out that the structure of the retirement program is such that it enables the CU administration to pay below market rates for certain coaches, because those coaches receive benefits disproportionate to the cost of their salaries. So, to pull two random names out of the air, CU could pay someone like Les Miles less than we would have to pay someone like Mike Bellotti, because Miles would receive a much larger retirement benefit than would Bellotti, due to Miles' prior history as a state employee.
It's just something to keep in mind when we're looking at possible coaching changes - at both the HC and OC/DC levels. (side note: Stitt is at a private school, so this thinking doesn't apply there).
Final side note to really piss you off: that 5th year the idiot from Boise received? It means that when he turns 65, he's going to be getting about $135,000/year in retirement benefits - underwritten by the taxpayers of Colorado. Had he been fired when he should have been? Zero.
issed:
Gary Barnett is actually a good case study for this effect. Basically, public employees receive a percentage of their "high 3" salaries when they retire. The percentage varies according to both how many years spent as a public employee, and what age they are when they decide to start receiving those benefits (which may or may not be the age they "retire" or quit working as a public employee). The higher the number of years they work for the state, the higher the percentage. The earlier they elect to start receiving benefits, the lower the percentage. Between GB's career at Air Academy high school, Ft. Lewis, CU as assistant, and CU as head coach - he worked as a public employee in Colorado for 25 years. Because of that 25 years, he could start receiving benefits as early as age 55 (and without any discount for being under 65). The chart for benefits shows that he gets 62.5% of his average salary for the highest paid 3 years of his career in Colorado (which, of course were his last 3). If my memory serves, he was making around $700k before his final contract which bumped him up to around $1.2MM (but he was fired halfway through that contract). The end result is that he probably receives a public employee retirement benefit in the neighborhood of $500k/year - for the rest of his life.
Tad Boyle is another interesting hire. His numbers aren't quite as favorable, but the economics say he's going to stay for at least 3 years at the higher salary (he's at about $500k/year right now). Presume he stays at $500k for the next three years, and decides to move on elsewhere. When he turns 65, he will be able to draw 25% of his average "high 3" salary as a retirement benefit. $125k/year. Not bad. I think we can safely assume that he will be around through 2015-16 at least.
Presuming Jon Embree stays next year - he would also be in line to receive 25% of his salary as retirement benefit when he turns 65. If he's fired this year, it would be 22.5% of the average of 2 years as HC + whatever he made for 1 year as TE coach. Again, not too shabby.
For Mike Hankwitz, the discussion of whom brought this up, if CU were to bring him back, even for just one year, it would provide around a $40,000/year boost to his retirement income (any time after one year increases that substantially each year). Which means we could pay him below market rates for his services (and we all know how much the current admin loves to do that).
The point of this is not to deride the public employee retirement program (save that for the politics forum), but rather to point out that the structure of the retirement program is such that it enables the CU administration to pay below market rates for certain coaches, because those coaches receive benefits disproportionate to the cost of their salaries. So, to pull two random names out of the air, CU could pay someone like Les Miles less than we would have to pay someone like Mike Bellotti, because Miles would receive a much larger retirement benefit than would Bellotti, due to Miles' prior history as a state employee.
It's just something to keep in mind when we're looking at possible coaching changes - at both the HC and OC/DC levels. (side note: Stitt is at a private school, so this thinking doesn't apply there).
Final side note to really piss you off: that 5th year the idiot from Boise received? It means that when he turns 65, he's going to be getting about $135,000/year in retirement benefits - underwritten by the taxpayers of Colorado. Had he been fired when he should have been? Zero.
issed:
