NCJ Number
166356
Journal
American Jails Volume: 10 Issue: 6 Dated: (January-February 1997) Pages: 43-45
Date Published
1997
Length
3 pages
Annotation
A comparison of the retirement plans of a public firm and a private firm currently operating in Florida reveals that most of the savings offered by privatization in corrections comes from restructuring the benefit packages of correctional officers.
Abstract
The expansion of corrections has led numerous private companies to enter the lucrative correctional service field. However, a 1996 report from the GAO concluded that these private firms are no more efficient than the government in operating facilities. The comparison focused the retirement plans offered by a typical sheriff's office, the Monroe County Sheriff's Office (MCSO), and a large private firm, the Corrections Corporation of America (CCA). Both operate medium-sized pretrial detention facilities in Florida. MCSO participates in the State's traditional retirement plan and pays an amount equal to 27 percent of each officer's base salary into the system annually on behalf of each officer. CCA administers an Employee Stock Ownership Plan (ESOP) as a method of saving for retirement. The ESOP reduced the amount paid into the employee's account by 25 percent annually. However, these funds are at greater risk than traditional pension funds due to their dependence on the status of the stock market. Thus, while private companies may save money during the design and build phase of a new or remodeled facility, their reduction of operating costs results from changes in the employee benefit package. Illustrations