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January 04, 2009

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Article I Judge

Interesting analysis. I do wish, however, that those in the media and the blogs would note for sake of completeness that there are hundreds of Article I federal judges (bankruptcy and magistrate judges) who earn only 92% of a District Court judge's salary and who do not have the ability to elect "Senior Status". Also, a more disheartening (from the federal bench perspective) comparison of salaries may be found when comparing federal salaries to senior level attorneys in the Executive Branch, who receive the full COLA adjustments annually and who earn substantially more than Article I & III judges.

David Stras

These are excellent comments and I think you make some good points. A few responses:

1. That is absolutely true, but it is part of the expected compensation for a judge, even if it is deferred compensation (which is why I discounted it to present value). My understanding, though I am not positive on this point, is that judges can buy insurance to protect any children and surviving spouses if they pass away before the pension becomes available. But if a judge has no family, you are absolutely right regarding the value of the pension.

2. My only objective in discussing the 401(k) participation was to point out that judges can still participate in other deferred compensation plans in addition to the generous post-retirement salary benefits. I did not mean to suggest that the TSP provided any additional bonus; indeed, the TSP was not factored at all into my analysis of the value of pension benefits.

3. Agreed, though I would point out that I think that the salary numbers used by the AO are on the very upper end of law professors. Even for elite schools, my sense is that there are few deans that make that kind of money on an annual basis unless employee benefits are factored in too. The same with the numbers for senior professors. The average dean and/or professor makes far less. Also, the average tenure for a dean is only about four years, so that high salary is ordinarily earned for only a short period.

Thanks for your comments.

My Two Bits

Points well made.

A couple of comments:

(1) The generous pension only pays if the judge survives to meet the rule of 80. Die one day before that date, regardless of the length of service, and your surviving spouse (who is entitled to no more than 33%, provided the judge pays a premium for spouse to participate) gets nothing. The estate of a judge without a surviving spouse receives nothing in any case.

(2) The comment about participation in the the 401(k) plan (which for federal employees is known as the thrift savings plan) is a red herring. In order to retire under the judges' retirement plan that provides the benefit on which your example is based, one must return the government's matching contributions to the TSP - refunding the face value of those contributions at the time they were made. (Incidentally, consider how that would work for a judge who retired on or around September 17, 2008 for reasons beyond her control, including poor health.) The judge retains the benefit of the tax deferral on her contribution as it may have have grown over time. But a give away or bonanza, it is not, and cannot fairly be considered as a bonus.

(3) Comparing law school dean retirement plans to the judges' plan only makes sense when one includes the salary comparison. In other words, deans seem to earn much more over their tenures than judges. A better comparison would be to combine the sum of their salaries before retirement and employer retirement contributions to the judges' compensation and retirement.

My Two Bits

Points well made.

A couple of comments:

(1) The generous pension only pays if the judge survives to meet the rule of 80. Die one day before that date, regardless of the length of service, and your surviving spouse (who is entitled to no more than 33%, provided the judge pays a premium for spouse to participate) gets nothing. The estate of a judge without a surviving spouse receives nothing in any case.

(2) The comment about participation in the the 401(k) plan (which for federal employees is known as the thrift savings plan) is a red herring. In order to retire under the judges' retirement plan that provides the benefit on which your example is based, one must return the government's matching contributions to the TSP - refunding the face value of those contributions at the time they were made. (Incidentally, consider how that would work for a judge who retired on or around September 17, 2008 for reasons beyond her control, including poor health.) The judge retains the benefit of the tax deferral on her contribution as it may have have grown over time. But a give away or bonanza, it is not, and cannot fairly be considered as a bonus.

(3) Comparing law school dean retirement plans to the judges' plan only makes sense when one includes the salary comparison. In other words, deans seem to earn much more over their tenures than judges. A better comparison would be to combine the sum of their salaries before retirement and employer retirement contributions to the judges' compensation and retirement.

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