Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 03-27-2010, 10:05 PM   #41
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Quote:
Originally Posted by clifp View Post
No not at all.

I am suggesting that all future pension private and public be structured that you need to work 45 year from roughly 22 to 67 in order to retire without a significant reduction in your lifestyle say 90% of your take home pay. Assuming you are doing no other saving (i.e. the 47% of American that have under 10K saved for retirement).

If you are willing to accept a reduction in pension like we see in Social security between 62 and 67 than working 40 years is an option, meaning you collect ~20 year of pensions.

Right now most local, state, a few union pension systems, along with police, fire, and military are designed to provide basically full income after 25-30 years.
This was probably ok when folks didn't live much past 70, but we as a society can't afford it now. There should be some compensation for dangerous and demanding jobs e.g. Fire, military to allow an earlier retirement. But even for them retiring simply on their pension without saving at ~50 years is too generous IMO. Since a person is likely to collect 30 years of pension.

A simple way of looking at this retiring after working 45 years at 67 and collecting 15 years of pension means 3 workers for every retiree.
At 62 it is 2 workers per retiree
At 52 is is 1 worker per retiree.
American worker productivity compared to the rest of the world no longer supports such a system.

Note this doesn't apply to most members of the this board, because we have have LBYM for many years and are prodigious savers. We've traded a lower lifestyle for longer retirement. If you have other source of income, because of saving, side business, rental whatever, than you can retire whenever you want.
You're writing (italics) as if dollars are going from the pockets of current employees directly into retiree's pension checks, same as current workers' Social Security taxes are being paid out in current SS benefts. I don't know how the Illinois state system is set up, but the City Retirement system here is nothing like that, and I don't know about "most local" pension systems, but in the City Employees' retirement system here, the maximum pension benefit available is 60% of your best two years' base salary, less than that if you have under 30 years of service. I'm not complaining, but it's hardly the "full income after 25-30 years" you claim public retirees are getting. Not only that, very few people are eligible for the maximum benefit at 50. You'd basically have to get hired straight out of high school—or at a pinch right after Junior College or a two-year stint in the military (if there is any such thing any more)—to have 30 years in by that age.

ISTM a lot of people on this board assume that all public employees are getting these gold-plated pensions, at very young ages, and that just isn't true. But what I'd really like to know is, since when are you the arbiter of how long people should have to work, whether in public or private employment? If private companies or government entities agree with their employees to set up a retirement benefit, who asked you whether it's overly generous? IMO, that's up to the actuary (i.e. is the funding mechanism adequate to pay the promised benefits) and the auditor (are the contributions being made as promised) to decide, not you.
__________________

__________________
kyounge1956 is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 03-27-2010, 10:57 PM   #42
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Quote:
Originally Posted by utrecht View Post
As you said, its no wonder plans like that are in trouble. Not too mention the fact that they are giving all public pension plans a bad name. I get offended somewhat when I hear people talking about public pension reform because my pension plan, while generous, is still pretty fair I think, but when I hear about some of these things like "spiking" there's no wonder why alot of them are in trouble and people are outraged.
What you said. I could sure do without the broad-brush characterization of government workers as under-worked and over-compensated. Anyone who thinks so, let me ask you: if working for the government is so cushy, why didn't you apply for the job? Instead, there seems to be an idea that what should be done is renege on promises made to those of us who did take that route, and the route itself closed off to all other possible future public employees. IMO, this smacks more than a little of jealousy.

I doubt it's the employees' fault these pension systems are underfunded—I'm guessing the employees' side of the funding is automatically deducted from their paychecks, same as mine is. They held up their end of the deal. They showed up for thirty years or more to teach your kids, repair your roads, staff and maintain your parks and libraries, supply your water and electricity, pick up your garbage, put out fires and catch bad guys. Why should they be punished because City or County councils or state legislatures didn't keep their side of the bargain?

I think spiking is reprehensible too (and it's not allowed on the system I'm in), but how is it any different, ethically speaking, from the numerous threads on this forum about how to game the tax system or the upcoming health insurance changes so that people who are actually quite well-to-do pay hardly anything in income taxes, or get their insurance subsidized when they could afford to pay for it on their own? How many variations are there on, "I didn't make the rules, I just take advantage of them"?
__________________

__________________
kyounge1956 is offline   Reply With Quote
Old 03-27-2010, 11:15 PM   #43
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Quote:
Originally Posted by 45th Birthday View Post
OK, while there are some out there who have modest pensions after long service at below-market wages, there are vastly more who are going to collect fat pensions that the states cannot afford.(snip).
Do you have some facts to back up this assertion?
__________________
kyounge1956 is offline   Reply With Quote
Old 03-28-2010, 12:32 AM   #44
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Quote:
but in the City Employees' retirement system here, the maximum pension benefit available is 60% of your best two years' base salary, less than that if you have under 30 years of service. I'm not complaining, but it's hardly the "full income after 25-30 years" you claim public retirees are getting.
60% of your best two years' base salary (if COLA also) would support our expenses forever - what a deal!
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 03-28-2010, 01:20 AM   #45
Thinks s/he gets paid by the post
kyounge1956's Avatar
 
Join Date: Sep 2008
Posts: 2,171
Quote:
Originally Posted by Spanky View Post
60% of your best two years' base salary (if COLA also) would support our expenses forever - what a deal!
Oops, it's actually 60% of the average of your best two years. IOW, 60% of [(best year + 2nd best year)/2]. The pension is partially COLA'd. It goes up 1.5% per year, but with a floor at 65% of original purchasing power.
__________________
kyounge1956 is offline   Reply With Quote
Old 03-28-2010, 09:03 AM   #46
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by kyounge1956 View Post
I think spiking is reprehensible too (and it's not allowed on the system I'm in), but how is it any different, ethically speaking, from the numerous threads on this forum about how to game the tax system or the upcoming health insurance changes so that people who are actually quite well-to-do pay hardly anything in income taxes, or get their insurance subsidized when they could afford to pay for it on their own? How many variations are there on, "I didn't make the rules, I just take advantage of them"?
It's no different. In both cases, I don't blame the individuals for taking *legal* advantage of loopholes to improve their take from the system. I blame the system itself and those who put said rules in place.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 03-28-2010, 09:22 AM   #47
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by kyounge1956 View Post
What you said. I could sure do without the broad-brush characterization of government workers as under-worked and over-compensated. Anyone who thinks so, let me ask you: if working for the government is so cushy, why didn't you apply for the job? Instead, there seems to be an idea that what should be done is renege on promises made to those of us who did take that route, and the route itself closed off to all other possible future public employees. IMO, this smacks more than a little of jealousy.
This common defensive rebuttal breaks down on scrutiny, IMO, for a couple of reasons.

1. The big pension benefits only come with longevity. Those of us in our 40s don't have time to get a big enough pension to make it worthwhile.

2. Some of us *did* choose a job with a pension and retiree health insurance in our 20s. I did. Problem is, retiree health insurance was taken away completely and my pension was frozen as puny levels. (Still want to talk about reneging on promises?) Is that somehow my fault for making a bad career/employer choice, keeping in mind this was in 1987? So are you saying I should have seen this coming in the private sector but knew governments wouldn't follow suit? That's a lot to ask of someone who was 22. And by the time these things were taken away, I was over 30 and lost 10 critical years toward building a killer set of retirement benefits based on longevity.

3. It's easy to say "we made our own bed" because we didn't have a crystal ball to see how the perks of private versus public sector would change over the next 20-25 years. Now if I were given the option of having a time machine to take me back 20 years, maybe I'd take you up on that government job offer. But it no longer makes sense given that any pension I could get for 10-15 years of service would be rather small.

I suppose you think it's our fault for not being able to tell the future in the 1980s when choosing careers and employers, and not knowing that by the 2000s the private sector deal would suck more and more compared to government work. If so, then I'm guilty of not telling the future. Fine.

Jealousy? Maybe a little -- or resentment that I had my deal taken away from me and now some of us facing declining real wages and high unemployment are asked to pay higher taxes to secure for others what was taken away from me and those like me. I could just as easily say that what you write smacks of defensiveness even if I don't see anyone here going after the pension benefits of those already hired or retired. I don't understand why those already in the system are so touchy about changing the rules for new hires -- especially if that's part of the way to secure the pensions of those already in the system. I just don't get it. Seems to me that protects taxpayers *and* those already in the system as employees or retirees.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 03-28-2010, 12:12 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by ziggy29 View Post
I just don't get it. Seems to me that protects taxpayers *and* those already in the system as employees or retirees.
I've been surprised by the extent of the negative reactions too. The reform could have been so much more painful to current employees and annuitants considering the economy and the critical situation with state finances. My first reaction was that these changes were reasonable, didn't impact anyone who worked or is working under the old system and we had the bullet go astray. Luck was with us!

No promises are being broken. The reform only effects future hires. College seniors applying for teaching positions now and starting work next Sept still have the current plan. Current employees and annuitants see no change whatsoever.

The new retirement plan is still a good deal compared to SS or most private employer plans.

The biggest impact is on high wage earners since the salary level used for pension calculation is now capped at the SS salary contribution limit of about $106k. So I suppose that 30 - 35 yrs from now when School Superintendents (who today are still college students) retire with smaller pensions, they'll have it considerably different than today's Superintendents. But they do have prior knowledge and their whole careers to prepare.

All the things tax payers don't like about the current system such as spiking, purchasing years cheap (far below the value they add to the pension), extremely early FR age, etc., are still there for decades until today's children work their lifetimes and start to retire.

Perhaps the pushback is because the current employees and annuitants feel that this won't be the last change? That this might be opening the door to further changes down the road if tax payers continue to complain and push their representatives for relief?
__________________
youbet is offline   Reply With Quote
Old 03-28-2010, 12:29 PM   #49
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,299
Well said, ziggy.

kyounge, if you go back to the OP, you'll see that:

Quote:
Only people hired on or after 1 Jan 2011 are affected.
Relatively modest changes that only apply to people who have not even been hired yet. In comparison, our mega corp made all sorts of negative changes to people during their careers. It would be a fairly long list that affected me, I probably couldn't even recall them all, because except for one or two (where we could choose the new plan, or stick with the old), we had no choice in the matter.

Maybe I am a bit 'jealous', but I tend to think that we all make choices, I made mine, and we never really know how things are going to turn out. We know life isn't fair anyhow, so it is what it is. But I do get to the point of feeling like telling some of the govt pension people to 'get off their high horse' when they seem to be saying that their benefits must be untouchable, when the people paying for those benefits don't get that same deal.

Maybe that helps explain some of the frustration from some of us. Oh, and I do think you are a bit guilty of painting with a broad brush also. As some have already mentioned, I don't think that most of us are mad at the people collecting the pension, but we are mad that our rulers have put us in this position. And frustrated.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 03-28-2010, 12:36 PM   #50
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,299
Quote:
Originally Posted by youbet View Post

The biggest impact is on high wage earners since the salary level used for pension calculation is now capped at the SS salary contribution limit of about $106k. So I suppose that 30 - 35 yrs from now...
Didn't see you posted while I was typing, so let me add a comment to this one.

Interesting that you describe this as 'the biggest impact', as there is also a lot of push to raise the SS max so that high income people keep paying SS taxes. I gotta wonder if that was in the back of their minds when they wrote that? Could be that 'the biggest impact' goes bye-bye? Then we are not left with much reform, are we?

To the extent that it is a small step, I'm glad they are doing at least something. But since it seems like too little, far too late, I hope they don't pat themselves on the back and act like the problem is solved.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 03-28-2010, 02:21 PM   #51
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by ERD50 View Post
Didn't see you posted while I was typing, so let me add a comment to this one.

Interesting that you describe this as 'the biggest impact', as there is also a lot of push to raise the SS max so that high income people keep paying SS taxes. I gotta wonder if that was in the back of their minds when they wrote that? Could be that 'the biggest impact' goes bye-bye? Then we are not left with much reform, are we?
No, it won't go bye-bye, at least as currently written. The max of $106.8k is the beginning point. It DOES NOT increase with increases of the SS max, but rather increases at a rate pegged to inflation. I think it's 50% of the GPI. Fed legislation to increase the SS max will not change this. This plan, left unchanged, makes the highly compensated folks subject to the same kind of restraints that highly compensated folks working under SS have.
Quote:

To the extent that it is a small step, I'm glad they are doing at least something. But since it seems like too little, far too late, I hope they don't pat themselves on the back and act like the problem is solved.
As another poster mentioned, Illinois was being considered for a hit in its credit rating by a rating agency and something had to be done to show a "good faith effort" to control the situation to avoid the credit rating reduction. But clearly, there are no close-in savings for the state budget. Just some trimming back of benefits to make the state pension system look more like SS in terms of salary caps and FR age and to make spiking more diffcult/expensive for the various gov't agencies to pull off.

As mentioned before, I was glad to see the legislators included themselves and judges in this reform. Of course, I understand the current legislators will likely be long gone, probably dead, by the time the changes kick in.
__________________
youbet is offline   Reply With Quote
Old 03-28-2010, 02:46 PM   #52
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Quote:
Originally Posted by ERD50 View Post
Maybe that helps explain some of the frustration from some of us. Oh, and I do think you are a bit guilty of painting with a broad brush also. As some have already mentioned, I don't think that most of us are mad at the people collecting the pension, but we are mad that our rulers have put us in this position. And frustrated.

-ERD50
ERD50,

I definitely share your frustration. Some countries such as Spain have alrady announced plans to reduce government pension obligations in an effort to reduce debts. It would not be surprising that others, i.e., US, will follow suit.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 03-28-2010, 02:58 PM   #53
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Quote:
The new retirement plan is still a good deal compared to SS or most private employer plans.
therein lies the problem: the public pensions will eventually bankrupt the system as contributions do NOT cover the cost of pensions.
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 03-28-2010, 03:02 PM   #54
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by kyounge1956 View Post
You're writing (italics) as if dollars are going from the pockets of current employees directly into retiree's pension checks, same as current workers' Social Security taxes are being paid out in current SS benefts. I don't know how the Illinois state system is set up, but the City Retirement system here is nothing like that, and I don't know about "most local" pension systems, but in the City Employees' retirement system here, the maximum pension benefit available is 60% of your best two years' base salary, less than that if you have under 30 years of service. I'm not complaining, but it's hardly the "full income after 25-30 years" you claim public retirees are getting. Not only that, very few people are eligible for the maximum benefit at 50. You'd basically have to get hired straight out of high school—or at a pinch right after Junior College or a two-year stint in the military (if there is any such thing any more)—to have 30 years in by that age.

ISTM a lot of people on this board assume that all public employees are getting these gold-plated pensions, at very young ages, and that just isn't true. But what I'd really like to know is, since when are you the arbiter of how long people should have to work, whether in public or private employment? If private companies or government entities agree with their employees to set up a retirement benefit, who asked you whether it's overly generous? IMO, that's up to the actuary (i.e. is the funding mechanism adequate to pay the promised benefits) and the auditor (are the contributions being made as promised) to decide, not you.
I don't claim to be an expert about all private pension plans and I am certainly not arbiter of how long one should work especially retiring at very early age like I did.

However, I have been highlighting the financial troubles of public pension plans for several years and posted links and discussions from the NY Times, Washington Post, and WSJ. Most recently my favorite new study is from the Pew Center from the States. The first sentence tells most of the story.
Quote:
$1 trillion. That’s the gap at the end of fiscal year 2008 between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises
Now $1 trillion dollars equal $8K/household in the country and for the higher income and considerably higher wealth of this forum our share of this debt, (Which is harder to shift to the next generation since state and cities can't print money) is probably $20K/forum member. Which makes it pretty darn relevant.

I've discussed how the problem could be even worse because the typical 7.5-8.5% projected growth for public pensions fund's assets wouldn't be allowed for private funds and is likely to be overly optimistic. Right now if long term fixed income is ~5% (VBLTX) with a 50/50 AA, this implies fixed income delivering 2.5% returns leaving the equity half to deliver 10-12%. A person coming on the forum saying I need my equity portfolio to grow at 10-12% would not be met with "your doing great, retire now from the forum members". Why should public pension funds getting a better reception? There have been articles saying that in the search for higher returns that public pension funds are swinging for the fence and going after alternative investments (e.g. hedge funds) and higher equity percentages. Of course going for a home run means lots of strike outs,

But most of all I've encouraged people to look at the annual reports of their own state and local pension and apply common sense metrics like we use in the forum to judge retirement feasibility.

So lets look at what you said about your city pension fund a couple of years ago.
Quote:
Originally Posted by kyounge1956 View Post
I had the numbers all written up for the City of Seattle employees' pension system, but I must have zigged when I should have zagged because I hit preview and my post disappeared. It's too late to look it all up again, but the best I remember the numbers were as follows:
total assets about $1.79 billion
number of active members about 8300
number of retirees 5011
average value +/-$357K
per retiree +/-$255K

All of which sounds really nice until I reveal that these are the figures from 2006. The most recent annual report posted on the System website is 2007 and I couldn't find the number of active members for that year so I had to go back one more. The fund operated in the red for three years, IIRC 2000-2002, due to the tech bubble, but by 2006 it was nicely getting its legs back under it, and by 2007 the funding level was up into the high 90's and the "floor" was increased: pensions are now guaranteed to retain 65% of their original purchasing power (the floor had been 60%). Then came last year. The fund lost almost 27% of its value in 2008. It dropped from a funding level of 86.96% as of February 29, 2008 to 63.06% as of Nov. 30, 2008 (as reported in the March 09 minutes of the Retirement Board, the most recent ones available), but I bet that wasn't the worst of it—the Dow lost another 2200 points or so between November and March and I'm sure that didn't help matters any. A couple of other relevant numbers: each employee puts in 8.03% of salary, which is matched by the City. The assumed growth rate of the fund is 7.75%
So using you old numbers 357K/retiree at 4% SWR (partially COLAed) = $14,280. We could also annuitized $357,000 which would provide a pension of $17,076 for a 60 year old retiree or $20,128 for a 65 year old. Now note these payments can only made by seizing all of the contributions of existing Seattle workers.
Oh BTW, I looked at the latest Seattle numbers. The pension fund value has dropped $1.62 Billion you've added a few hundred new retirees. (In Jan 2010 15 folks retired 1 died) and the pension fund is < %63 funded.

Seattle workers and the City of Seattle contribution (8%) is virtually the same as Social Security. We all know of Social Securities future (current?) problems. Yet Seattle allows workers to retire much earlier, with higher benefits. Do you still want to contend that your pension plan isn't using the current contribution of worker to pay retiree benefits.? From what I've seen Seattle is a pretty typical pension fund.

Severely curtailing the future pension benefits of state and local worker like they were forced to do in Illinois, is good first step. I am not sure it is enough.
It is going to require sacrifice on the part of taxpayers, current workers, and current retireers the sooner we recognize this fact the better off we will be.
__________________
clifp is offline   Reply With Quote
Old 03-28-2010, 03:26 PM   #55
Thinks s/he gets paid by the post
Spanky's Avatar
 
Join Date: Dec 2004
Location: Minneapolis
Posts: 4,046
Quote:
It is going to require sacrifice on the part of taxpayers, current workers, and current retireers the sooner we recognize this fact the better off we will be.
Why should they have to sacrifice?
__________________
May we live in peace and harmony and be free from all human sufferings.
Spanky is offline   Reply With Quote
Old 03-28-2010, 03:44 PM   #56
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,451
Quote:
Originally Posted by Spanky View Post
Why should they have to sacrifice?
What is the alternative? The top 100 billionaires in the country all giving most/all of their money to state and local governments? States and cities filing for bankruptcy?
__________________
clifp is offline   Reply With Quote
Old 03-28-2010, 03:52 PM   #57
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by Spanky View Post
Why should they have to sacrifice?
It's my feeling that when there is a big mess, everyone with a stake in it needs to be willing to each give a little bit to collectively change a lot. No one -- taxpayers, current pensioners, those working and paying into the system -- should reasonably be expected to shoulder all the burdens of fixing it.

Frankly, if I were a taxpayer in a state or local government with a huge pension mess, I'd be a lot more willing to allow my taxes to be raised to fix it if I knew it would also mean that the plans would cease (or at least become much more fiscally sane and sustainable) for new hires. The more those who would benefit from insolvent pension plans try to say the taxpayer should suck it ALL up and endure 100% of the "pain", the more this taxpayer would fight it. The more they were willing to meet the taxpayer part of the way, the more I'd support reforms even if it meant a (hopefully) one-time tax hike to shore up the plans for those already depending on them. But we can't keep making a bad situation worse by adding more new hires into already unsustainable benefit plans!

The inability to agree to "shared sacrifice" is a big reason why so many entitlement plans -- particularly those related to retirement, be it SS, Medicare and public pensions -- keep looking at problems that are bigger and bigger and harder and harder to fix as time goes by without consensus on how to collectively make the sacrifices we all need to make to fix it. Everyone seems to say all the *other* stakeholders need to endure all the pain... but leave me alone! And the more we are paralyzed from action because some groups won't agree to their share of the pain, the worse it gets for ALL of us down the road.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 03-28-2010, 03:57 PM   #58
Thinks s/he gets paid by the post
Bimmerbill's Avatar
 
Join Date: Jan 2006
Posts: 1,631
I've seen quite an increase in negative news/web articles dealing specifically with federal employees (I'm one, so I keep an eye on this stuff). Seems like the public sector is the new whipping boy.

I expect the public to be worked up into a frenzy, and to be "punished" as a result. Pay freezes, changes in benefits, etc. Sure, that's happening in the private sector, but I dislike the race to the bottom.

Trouble is, once we are "taken care of" who is next?

As far as pensions: has anyone looked at the benefits of retired people living on pensions? They probably are not sucking up gov't bennies at the rate of those living in poverty. They are probably more self sufficient, less draining on society? Pay more taxes, etc.

Is there a way to measure that? Does that offset the upfront cost?
__________________
Bimmerbill is offline   Reply With Quote
Old 03-28-2010, 03:59 PM   #59
Thinks s/he gets paid by the post
 
Join Date: Nov 2006
Posts: 2,268
Quote:
Originally Posted by Spanky View Post
therein lies the problem: the public pensions will eventually bankrupt the system as contributions do NOT cover the cost of pensions.

Statements like this one are what boil my blood. "Public pensions" will not bankrupt the system. There is nothing inherent in a public pension that makes it evil just by its mere existence. The problem is that many of them are run by fools and many of them have unrealistic rules governing the payouts.

My pension fund (Dallas Police and Fire Pension) is thriving and at some point in the near future (10 years maybe?), the percentage that the City contributes will be lowered.

Saying all public pensions are bad just because some of them are and they are the ones making news, is like saying all <insert race here> are bad just because some of that race are bad and those thugs are the ones who make the news.
__________________
utrecht is offline   Reply With Quote
Old 03-28-2010, 04:08 PM   #60
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,613
Quote:
Originally Posted by Bimmerbill View Post
I've seen quite an increase in negative news/web articles dealing specifically with federal employees (I'm one, so I keep an eye on this stuff). Seems like the public sector is the new whipping boy.
Unfortunately, they are barking up the wrong tree if they are targeting their outrage at federal employees.

Since FERS, federal employee retirement benefits aren't the bank-breaker they used to be. Frankly I think if state and local governments would have followed suit and went more toward the FERS model over the last couple of decades, many of the bigger messes would be in much better shape.

It's not the pension per se, it's the overpromising. If you don't overpromise by assuming unrealistic long-term rates of return, you're not going to run into many underfunding crises because the current-year, pay-as-you-go employee and employer contributions to the fund are much more likely to be adequate to meet the promised benefit down the road.

I will agree with some of the "pension defenders" here that there can be a tendency to attack all public pension plans instead of just the overpromising, unsustainable ones run by idiots and politicians buying votes -- and that is a shame. There's no reason why anything needs to change with the plans that are solvent and which make prudent assumptions about the future, especially if the total compensation (wages plus benefits) are inline with the private sector overall.

I think the timing of these pension plan blow-ups -- being concurrent with all the bailouts, making many people feel like *everyone* is getting bailed out of a jam except for them -- probably hurts sentiment as well, as many people are weary of seeing more tax dollars go to everyone but them (or so it feels like). And it does make us lose sight of the ones that are prudently run in a fiscally sound and sustainable way.
__________________

__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
More Cheery News: Public Pensions in deep doo doo clifp FIRE and Money 57 10-15-2009 07:33 AM
Public Pensions Bankrupt??? jerryo FIRE and Money 46 08-12-2006 07:20 AM

 

 
All times are GMT -6. The time now is 03:09 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.