OPINION: A lesson in retirement planning

May 25--My retirement is not imminent. Right, boss?

But after a round-number birthday last year, I began to ponder that eventual transition. I even attended a "How to Thrive Financially in Retirement" class at Pellissippi State.

The instructor disclosed the secrets to taking full advantage of Social Security by coordinating benefits with a spouse.

Nothing he suggested approached the sophistication of Victor Ashe's retirement planning, however. The ex-mayor, as was revealed recently, made his youngest child the beneficiary of his pension. Under a dubious provision of the city's program, she will receive payments, increasing 3 percent a year, for life after Ashe dies.

That will total some $2.8 million, according to calculations by our reporter Tony Hernandez -- if the daughter lives to be 80. There's a good chance she'll live longer than that. A life-expectancy calculator shows the child, now 21, has a 50-50 chance of living past 87 and a 25 percent chance of seeing 94.

Ashe is unapologetic about taking advantage of the loophole, which he says was in the program before he became mayor.

"I named my daughter as my beneficiary as part of my interest in looking after my daughter's future welfare. It is that simple," he said.

I would do the same for my daughter, if I could. But I can't. The Scripps pension -- which is now frozen and closed, by the way -- is a wonderful benefit, but it's not that generous.

Ashe's cash-out isn't even City Hall's most egregious. Two retired police officers have arranged for their daughters to draw more than $4 million each if they live to be 80, and a parks and rec worker leveraged the plan by designating a 5-year-old granddaughter as her survivor.

Maybe whoever stuck this time bomb in the Knoxville's pension system didn't know how to do math. But I doubt it. They likely were pretty slick with a slide rule or abacus or whatever they used.

It's true that, historically, some pension programs provided lifelong benefits for children. In fact, the daughter of Pvt. Mose Triplett, who served briefly in Knoxville during the Civil War, is still collecting $73 a month, the last Civil War pension being paid by the Department of Veterans Affairs.

But most pensions don't work that way. After all, the purpose of a survivor benefit is to protect a dependent who has lost his or her support as the result of an employee's retirement, then death.

That typically means spouses, many of whom have been partners in the employee's career.

Take my wife. (No, don't really take her.)

I started with Scripps in January 1977, and she and I were wed in May of that year. So, I've been with the company for 449 months, and she's been with me for 444 of those months.

But there's a wrinkle in our case that has annoyed her for about 37 years.

She is five years and six days younger than I am. Under the Scripps program, if the spouse is more than five years younger than the employee, the survivor benefits are reduced. That's because the pension's actuarial basis would be knocked askew if much younger spouses got the same payments as same-age mates.

I tell her that's what she gets for being my trophy wife. She is not amused.

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