Why the US can't Build Infrastructure

[Duke87]

The issue Kentucky has is that many (most) of our engineers start as scholarship students, which means they go on the payroll for summer work, and are guaranteed a job when they graduate. So they start accruing years of service for pension purposes in their late teens/early 20s. An engineer, even in a non-supervisory position, makes a pretty good salary. Here, you have to work for 27 years before you're eligible for full pension benefits, but you only have to work for 20 years to be eligible for insurance when you retire. So we get a lot of engineers who will retire after 20 years, when they are in their mid- to late-40s, earning not too far below $100K when they retire, and then they can draw a pension and then go to work for a private firm that does business with the state and earn even more money while also drawing their public pension.

This touches on another issue here - a lot of states are cash-strapped due to pension obligations. Some have wisely rolled back the offerings for new hires to something less gravy, but it'll take a couple decades before the savings from that are realized. In the meantime, people collecting pension payments in their 40s and 50s ruin the cashflow.

The problem is especially acute in northern states where people when they retire tend to move to warmer and less expensive southern states, and thus do not reinvest their pension money in the economy of (or contribute to the tax base of) the state that is paying it.