How to Use Pensions to Improve Judicial Tenure

Posner shows that salaries of federal judges are low compared to those of lawyers in private practice or academia, and judges' salaries have declined substantially over time relative to earnings of practitioners and law professors. This would imply that being a judge is now less attractive than in the past, but it does not imply that judges are underpaid. For one thing, the number of lawyers has increased greatly over time relative to the number of federal judges, so only a smaller fraction of the stock of good lawyers has to be attracted to the federal bench than in the past.

Underpaid jobs by definition have difficulty attracting and holding high quality workers. Posner's evidence indicates that resignation rates of federal judges are low, not high. It would be useful to know whether the quality of judicial opinions have declined over time, for that would be a way to determine whether the quality of judges has declined. One-way to measure whether quality has declined is to determine the trend in the frequency with which higher courts overturn the opinions of district and circuit judges, but that approach would have to hold constant both the difficulty of the cases and also the quality of the judges doing the overturning.

I believe that given Posner's discussion of judges' salaries, a high priority should be given not to adjusting their salaries, but to raising their pensions to induce more of them to retire before they are too old and have served 25, 30, or more years. Supreme Court Justices now serve an average of 26 years, and retire on average at age 80. I argued in an earlier post (see Becker, March 12, 2005) that lifetime tenure for Supreme Court Justices and federal judges is undesirable precisely because few judges resign. Low rates of resignations combined with large improvements in life expectancy mean that all federal judges, not just Supreme Court Justices, tend to stay on the bench for decades. The framers of the United States Constitution could not have foreseen the very large increases in tenure of judges when they stipulated that members of the Supreme Court would have lifetime tenure.

Judges who stay for decades run the risk of becoming isolated and out of touch with newer issues. Moreover, judges who are incompetent or lose their mental facilities can stay on for many years. Term limits for judges would be a good solution to such excessive tenure of many judges, but that would require a constitutional amendment for Supreme Court Justices, and would be politically difficult to implement for other federal judges. A different approach would be to employ the carrot instead of the stick, and use financial incentives to induce more judges to retire at reasonable ages. Posner indicates that judges already have generous pensions and health benefits, but their pensions can be made still more generous.

Suppose pensions were improved so that judges could retire after age 70, and/or after a certain number of years on the bench, at an annual pension that is 150 per cent of their salaries as active judges. A circuit judge would then receive about $250,000 per year if he retired and only $175,100 if he continues. That is likely to influence the retirement decisions of many judges. If a 50 percent retirement premium were too weak an incentive, the premium could be made larger. The financial burden on the federal budget of even large increases in the pensions of judges would be minor since judicial salaries are a tiny fraction of the budget.

Another way to encourage earlier retirement of judges would be to offer them several years of income as a bonus if they retire at say age 70, or after 15-20 years or so of service. Bonuses to encourage professors to retire were introduced by many universities after a federal law in the early 1990's prevented these institutions from forcing professors to retire. Data for the University of Chicago and other universities suggest that some 30 per cent of professors who reach their sixties accept a bonus of about two years salary plus medical benefits to retire then.

For most occupations it would not be wise to have pensions that are multiples of salaries. But judges are unusual since they have de facto lifetime tenure, and many of them do continue to serve for many decades until they are in their late 70's or 80's. Very high retirement pensions for federal judges seem to be a good way to induce them to retire at reasonable ages and lengths of tenure.