California proposal for pension reform

[Chuckanut]

I don't know about other states, but once retired, I cannot return to any job covered by the state pension system for 30 days. After that, there is a limit to the number of hours on can work before losing pension dollars. So for most of us, once retired, that's it except for some possible part-time work to help with things like medical expenses.

[harley]

Quote:

Originally Posted by Nords I highlighted that last sentence in bold because presumably it's OK for police, firefighters, and military to be "double dipping". I don't think the pension start date is too early-- I think the occupational hazard is too high.

I don't want to PO the various LEOs on the forum, but I'm not sure this works if you really run the numbers. Law enforcement isn't in the top 10 most dangerous professions, and over half of the police deaths are from traffic accidents. And most of those were not the result of chasing a criminal or rushing to the cene of a crime, but just standard driving while in their "offices". It's mostly a result of their not being required to wear their seat belts. The fatality rate for police would be basically the same as the average American if they wore their seat belts.

Most dangerous jobs - Aug. 16, 2006

The New York Times > Health > Vital Signs: Safety: Unbelted and at Risk

I'm not picking on cops, but I think these issues need to be looked at generally and using facts, not anecdotes. Just like the general complaints about public servants and double dipping and spiking. If it is all looked at clearly, a fair, equitable, and sustainable pension system for everyone might be the result.

Edit: I'm certainly excluding military from this "most dangerous jobs" factoid. Counting death in combat military jobs are definitely in the most dangerous job category. At least during the current war du jour stage. I don't know about firefighters, but I'm sure there are meaningful statistics out there for them too.

[Finance Dave]

CA definitely needs to do something to stop the bleeding...this seems like a good start.

[GregLee]

Quote:

Originally Posted by youbet Sounds like the anti-spiking bill should be passed immediately! In these tough times, tax payers will appreciate the savings even if they are modest and the employers and employees who have been gaming the system using spiking won't mind because "it is not real money." It's a win-win!

I think it is a win-win. It might be real money to a few employees near retirement if it applied to them, but the proposed bill affected only new hires.

[youbet]

Quote:

Originally Posted by GregLee I think it is a win-win. It might be real money to a few employees near retirement if it applied to them, but the proposed bill affected only new hires.

Hopefully for the citizens of Calif, the anti-spiking measures will apply to all employees. Then, the employees can all recieve the full pension benefits they've earned and deserve but not "extra" derived from payola, corruption, patronage and "good ole boy" spiking schemes.

Even here in politically corrupt Illinois, most of the new anti-spiking measures apply to all employees. It's amazing the new rules passed the state legislature but I suppose the extreme budget shortfall we have helped that.

[Texas Proud]

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Originally Posted by Leonidas I know that case you mention (know the man in question as well), and we've discussed it here in the past. He will have to live to about 125-years-old before the extra money that last minute pay raise will cost the pension system the first million. Bradford carried some serious heat and weight for the mayor, ("Crime Lab Fiasco", or Operation E-Racer ring any bells?) and this was the mayor paying him off for catching bullets that could have should have hit the mayor. Plus there was a significant drop in crime during his tenure - some might call it a performance bonus. Was it wrong? Most definitely, but Lee Brown was famous for this kind of abuse of the pension system. Talk about Pension Holidays, that man tried to put the city on a permanent Pension Vacation. At the same time he was using increased future pensions to convince about 35% of the police department to stay on the job during a time in which the labor market was very competitive and the city's efforts to hire new officers were a miserable failure. He didn't care because all the pension costs were rigged to take place right after he was mandated to leave office due to term limitations. The pension system eventually straightened it all out with the next administration - it took a lawsuit against the city - but things are fixed now for the most part.

Thanks for the update.... I just remember all the news reporting back when... I think I read a few articles about it, but could not remember them since it was a long time ago... the reporting made it sound like a lot more...

And yes... Brown was horrible... he raised the pension % for city workers to an amount that was not sustainable... it has since been fixed... but at a cost to the city.... but, I am not in the city so it really does not hit my pocketbook...

[utrecht]

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Originally Posted by harley I don't want to PO the various LEOs on the forum, but I'm not sure this works if you really run the numbers. Law enforcement isn't in the top 10 most dangerous professions, and over half of the police deaths are from traffic accidents. And most of those were not the result of chasing a criminal or rushing to the cene of a crime, but just standard driving while in their "offices". It's mostly a result of their not being required to wear their seat belts. The fatality rate for police would be basically the same as the average American if they wore their seat belts. Most dangerous jobs - Aug. 16, 2006 The New York Times > Health > Vital Signs: Safety: Unbelted and at Risk I'm not picking on cops, but I think these issues need to be looked at generally and using facts, not anecdotes. Just like the general complaints about public servants and double dipping and spiking. If it is all looked at clearly, a fair, equitable, and sustainable pension system for everyone might be the result. Edit: I'm certainly excluding military from this "most dangerous jobs" factoid. Counting death in combat military jobs are definitely in the most dangerous job category. At least during the current war du jour stage. I don't know about firefighters, but I'm sure there are meaningful statistics out there for them too.

That study is non sense. First of all the story was written in 2005 and covered a period up to 2001. Attitudes have changed dramatically in the last decade in regards to cops wearing seatbelts.

Also, it refers to "people" riding in police cars. It doesnt even say if they are talking about cops, prisoners, or civilians riding along.

Every cop I know wears his seatbelt at all times, up until a few seconds before he needs to jump out. Ive never seen or heard of anyone I know getting a seatbelt tangled in their gun and Ive never heard anyone say "Im tired of putting my seatbelt on and taking it off all day".

[vttlarry]

Sounds fair to me. As pensions are underfunded, it is mandatory that fixes be found. I am a pensioner from Minnesota and the employee and employer had their contributions increased recently, and COLA's were limited to 1% until things improve. That is reasonable.

It is also reasonable to look at changes in the future, but it makes they should really not change the rules on those who worked under the old system and made life changing decisions to retire. What you thought you were getting should be what you get.

Minnesota allows you to be employed, but if it is in another public job, you can only earn $14,000 a year.

[kyounge1956]

After mulling this over a few days, I think the prohibition of retroactive increases should instead be prohibition of unfunded increases. Legislation passed in 2001 or thereabouts automatically increases the floor COLA of Seattle's pension system whenever the funding level hits 100%—but doesn't mandate any corresponding change in the employer/employee contribution level. Since the legislation passed, there have been two stock market bubbles, both of which brought the system to 100% funding, triggering an increase in the floor COLA, and then burst not too long afterwards. ISTM that this must be at least partly responsible for the scarily underfunded condition of the pension system at this time. I'm pretty sure the change applies to everyone in the system whether already retired or not, and if so it is retroactive, but IMO the real problem is that contributions don't change when benefits rise. I don't object in principle to a pension system increasing benefits retroactively, provided the contribution level is also changed as required to pay for the increase.

[clifp]

Quote:

Originally Posted by vttlarry Sounds fair to me. As pensions are underfunded, it is mandatory that fixes be found. I am a pensioner from Minnesota and the employee and employer had their contributions increased recently, and COLA's were limited to 1% until things improve. That is reasonable. It is also reasonable to look at changes in the future, but it makes they should really not change the rules on those who worked under the old system and made life changing decisions to retire. What you thought you were getting should be what you get. Minnesota allows you to be employed, but if it is in another public job, you can only earn $14,000 a year.

One of the interesting things I've observed is that virtually all of the problems with public pension have a reasonable fixes already in place in some states. So the problem with public pension double dipping is nicely solved by Minn. Wisconsin, and the new proposal by Rhode Island, and other states tie future pension increases for retirees to the performance of the pension fund. Spiking is solved in many states with 3-5 year averages.
An increasing number of states are passing laws which outlaw the legislator taking pension holidays (or worse). (If I was in a public employee union preventing pension holidays would be a top priority.) And of course many states are rethinking a pure defined benefit plan for new employees.


I believe that combining best practices actually would put all but the worse plans in reasonable shape.

[Nords]

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Originally Posted by harley I don't want to PO the various LEOs on the forum, but I'm not sure this works if you really run the numbers. Law enforcement isn't in the top 10 most dangerous professions, and over half of the police deaths are from traffic accidents. And most of those were not the result of chasing a criminal or rushing to the cene of a crime, but just standard driving while in their "offices". It's mostly a result of their not being required to wear their seat belts. The fatality rate for police would be basically the same as the average American if they wore their seat belts. Most dangerous jobs - Aug. 16, 2006 The New York Times > Health > Vital Signs: Safety: Unbelted and at Risk I'm not picking on cops, but I think these issues need to be looked at generally and using facts, not anecdotes. Just like the general complaints about public servants and double dipping and spiking. If it is all looked at clearly, a fair, equitable, and sustainable pension system for everyone might be the result. Edit: I'm certainly excluding military from this "most dangerous jobs" factoid. Counting death in combat military jobs are definitely in the most dangerous job category. At least during the current war du jour stage. I don't know about firefighters, but I'm sure there are meaningful statistics out there for them too.

I think we'd also have to include "wear & tear" in those studies, not just fatalities. I bet that most front-line firefighters and police officers have a chronic joint injury (or even worse, respiratory syndrome) that relates to a specific (and clearly remembered) incident on the job.

[Leonidas]

Quote:

Originally Posted by Nords I think we'd also have to include "wear & tear" in those studies, not just fatalities. I bet that most front-line firefighters and police officers have a chronic joint injury (or even worse, respiratory syndrome) that relates to a specific (and clearly remembered) incident on the job.

Or age related issues. Like one of my friends, who got promoted late in career/life and became the sergeant over a tactical squad. Every night they were in the projects chasing crack dealers and gang bangers. As he said, "I'm a 45-year-old working with 25-year-olds who are in phenomenal shape, and we're all chasing 17-year-olds who sprint like Olympians and jump fences like gazelles. I'm just too damn old to be doing this." Six-months later he transferred to Homicide where it's a lot less physical. But we only have a certain number of jobs that are less physically demanding.

Plus, I think we all become more risk-averse as we get older. I know I started to get smarter about such things in my 30's. and by my 40's I was positively thrilled about a promotion that just about guaranteed I would not have to be on the streets every night. Two weeks before I got promoted, age 43, we got into a gunfight with a couple of gang-bangers who tried to rob our undercover. I still went toward where all the shooting was happening, but you would not describe me as moving with alacrity.

Or as someone pointed out later, "Man, all the sarge kept saying all night long was, 'I'm too old for this #$%!'"

At a certain age the body becomes less capable of meeting the demands of the job, and the mind and spirit start to agree.

[MichaelB]

Firefighters, Police and other public safety jobs need to be assessed separately. Double dipping, as discussed above, isn’t the problem because most are not hired back into other public service jobs. If we want their young arms and legs but not the older ones we shouldn’t deny them the opportunity to work elsewhere. We should probably encourage and enable it by funding outplacement services and retraining.

[Gatordoc50]

There must be a philosophical reason for DB plans. Certainly, it would be easier to increase salaries and have employees be responsible for their own retirement. My hunch is the philosophy is to avoid transparency. There is no other reason that I can come up with.

[Mulligan]

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Originally Posted by Gatordoc50 There must be a philosophical reason for DB plans. Certainly, it would be easier to increase salaries and have employees be responsible for their own retirement. My hunch is the philosophy is to avoid transparency. There is no other reason that I can come up with.

Maybe Im blinded from the fact that I have DB, but I dont think it is that sinister. I believe that things just move slower as far as change at the government level ( many reasons for that, as we all know). Reform is definitely occurring, and some plans are going hybrid or defined contribution already. I wouldnt be surprised that 10 years from now, there will be significant change mirroring more the private sector. The percentage of private DB plans is shrinking fast and soon a lot of those receiving pensions will start to die off from old age. My humble guess is the percieved, if not actual, imbalance between private and public will force change.

[Gatordoc50]

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Originally Posted by Mulligan Maybe Im blinded from the fact that I have DB, but I dont think it is that sinister. I believe that things just move slower as far as change at the government level ( many reasons for that, as we all know). Reform is definitely occurring, and some plans are going hybrid or defined contribution already. I wouldnt be surprised that 10 years from now, there will be significant change mirroring more the private sector. The percentage of private DB plans is shrinking fast and soon a lot of those receiving pensions will start to die off from old age. My humble guess is the percieved, if not actual, imbalance between private and public will force change.

Perhaps I'm being too cynical. My underlying point is that there isn't any mathematical or scientific thinking involved with DB plans. Trying to provide certainty given uncertain variables is impossible.

[Gatordoc50]

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Originally Posted by Gatordoc50 Perhaps I'm being too cynical. My underlying point is that there isn't any mathematical or scientific thinking involved with DB plans. Trying to provide certainty given uncertain variables is impossible.

Well, trying isn't impossible. Achieving certainty is. lol

[Spanky]

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The percentage of private DB plans is shrinking fast ..

IHMO, defined benefit plan in private sector is nearly not in existence.

[Spanky]

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My underlying point is that there isn't any mathematical or scientific thinking involved with DB plans.

or any thinking at all.

[Spanky]

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IMO the real problem is that contributions don't change when benefits rise. I don't object in principle to a pension system increasing benefits retroactively, provided the contribution level is also changed as required to pay for the increase.

How will this be implemented? What are the sources of increased contribution levels, current workers or the public?