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It appears now MY pension is under attack.
Old 11-06-2010, 08:29 AM   #1
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It appears now MY pension is under attack.

My pension plan was recently voted "#1 Mid sized pension plan" in the country. Its well run, and is doing fine, but like everyone else, the City of Dallas is hurting financially. Its not nearly as bad here as a lot of places, but even the police took a pay cut this year for the first time in 30 years so its definitely not a great time.

Anyway, the City now realizes that they could save $81 million per year by cutting their contributions to the pension plan. Do they realize the catastrophic effect that will have down the road? Who knows, they probably just don't care because all politicians are short sighted in my opinion.

There is currently a State lawmaker trying to introduce a bill that will make it impossible for anyone in the pension system (retiree or person currently accruing benefits) from holding a seat on the pension board. This would mean that the board would consist of all City Council members. These are the same people who have already run the Non-sworn city employees pension fund, which is separate from Police and Fire pension, into the ground. Their first order of business would be to underfund the pension to save money. This would require a vote of the citizens who no doubt will be told how the City will go broke if they don't vote "Yes", even though the City was operating just fine before the recession and has the lowest tax rate of any City in this area.

This is going to be very messy.

The Pension board member I talked to (who Ive known for 15 years) told me that our accrued benefits cant be changed. The President of the Police Association told me they can. He told me they can change the 3% per year multiplier for all of the years that I've already worked. I don't believe that's true, but I guess I could be wrong. It would be one thing to have a pension frozen like has happened to so many in the private sector, but to have the benefits that you've already earned, reduced would be a whole different story. If that is possible, and again, I don't think it is, you will be hearing about the City of Dallas on the National news soon, Trust me, it will not be pretty. Ever seen what happens when the Police Dept of a city with the 3rd highest crime rate in the country goes on strike?
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Old 11-06-2010, 08:50 AM   #2
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Here is a link to a story about a Dallas City Council member. Take a look at the kind of people we are dealing with. Notice how she threatened to vote to help damage Police and Fire Pensions because she was angry that a police officer stopped her neighbor (friend) who had run two stop signs. The motorist has an extensive criminal history that ranges from drug arrests, weapons charges, burglary, aggravated assault..etc.

Police clear Dallas City Council member Carolyn Davis of crime after interrupting traffic stop | News for Dallas, Texas | Dallas Morning News | Breaking News for Dallas-Fort Worth | Dallas Morning News
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Old 11-06-2010, 09:10 AM   #3
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I'm sorry to hear that your pension is under threat, but times are tough all over. My MegaCorp pension was frozen/stopped accruing in 1994 if it makes you feel any better. Many have already been pinched, and sooner or later every pension will be attacked when all is said and done.
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Old 11-06-2010, 09:26 AM   #4
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Frozen / Stopped accruing is bad enough. Taking away benefits already earned is unconscionable (sp?). Personally, I don't think that will ever happen, in fact, the mayor has openly said he was only calling for a review of the pensions and agreed that promises to current employees need to be kept, but since the President of the police union knows what going on behind closed doors and is in a panic, I'm sure you can see how it would worry me a bit. He also told me that he had 8 (out of 14) council members ready to vote to leave the pension as is...but one of them is Carolyn Davis who is the one mentioned in the article above who now is pissed off at the police because someone wrote her lying thug neighbor a ticket. Heaven forbid a cop writes a ticket......

Here the article:
Leppert calls for review of Dallas city employee pension systems | News for Dallas, Texas | Dallas Morning News | Latest News
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Old 11-06-2010, 09:31 AM   #5
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One aspect of working for the federal government that I never liked, was that it seemed like almost every year someone would introduce a bill in Congress that would be financially detrimental to many of us. Most of these bills never went anywhere so I guess they had little or no support. So, eventually I learned to stay aware but not to worry just because a bill was introduced (unless/until it moved on to the Senate).

I do hope that your local government pension remains intact! With any luck, maybe this reduction in contributions will not be passed by your city council.
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Old 11-06-2010, 09:36 AM   #6
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My guess is that the city's retirement system policies are also influenced at the state level. There's a resource section on this page that may provide more information to you with regard to your pension.

https://www.oag.state.tx.us/consumer/pensionplans.shtml
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Old 11-06-2010, 10:47 AM   #7
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Originally Posted by utrecht View Post
..... Taking away benefits already earned is unconscionable (sp?).
Yeah, that's what those of us in the private sector think too..as we've watched our former employers cut health care benefits, life insurance coverage and, yes, even pension benefits already accrued. Seems like there are no guarantees at all any more and promises aren't worth the paper they're written on.

Guess it's best to expect little and prepare for the worst..and be pleasantly surprised if it all works out as "planned"!
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Old 11-06-2010, 12:05 PM   #8
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Ahhh, politicians. A species I don't miss interacting with in retirement.

Since I've joined the board I have looked at a lot of different pensions systems across the country. Of those, all the ones that are horribly mismanaged (except one) were administered solely by elected officials.
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I'm sorry to hear that your pension is under threat, but times are tough all over. My MegaCorp pension was frozen/stopped accruing in 1994 if it makes you feel any better. Many have already been pinched, and sooner or later every pension will be attacked when all is said and done.
This is a long post, so if you're not in the mood for reading just go to the paragraph in blue at the end for a summary.

I keep saying that police pensions are not about what's fair. Mostly because fair is nebulous in this, if not most, financial and legal contexts. As are many elements of the situation - compensation, discipline, promotions, transfers, etc.

The thing that many people on this board forget is that it's not about being fair to anybody - it's about trying to hire and retain good cops who deliver police services in their neighborhoods. When you call the police you might get better service if the cop is feeling good about his job, but what you really want is someone who is honest, well-trained, equipped, supervised and managed.

Perhaps more importantly, you want to get someone who is not operating under a set of instructions that may not in your best interests.

Power is a corrupting influence, in either its raw form or in one of its many guises like sex or money. The police are given incredible powers in society, and they are right down there in the gutter where power, sex and money are all tangled up in a shadowy world where most people don't get to see what's going on. To counter corruption you have to be able to hire and retain the right kind of employees, promote and support the right kind of supervision, and manage the entire agency without undue political influence.

While there has to be political oversight of all that power, the politicians need to be kept at arms length from the actual application of that power. Let them get too close and disasters tend to follow.

I've seen police work done where politicians have undue influence - where the politicians decide who gets good police service and who gets screwed with. For a couple of years I worked a patrol beat where there was some overlapping jurisdiction with an agency run by a crook, as was the larger political subdivision it was part of. Folks who voted and contributed a certain way called that agency, and everyone else called us and prayed we got there first. At other times officers from that agency would beg me to come make an arrest because they didn't dare arrest a politically connected jerk who was untouchable by them.

That same agency was famous for passing out badges to people who contributed to the boss's election campaign. I knew folks at the badge company and asked them once how many badges they had made for the 400-employee agency. The number of gold supervisor badges produced was over 1200, and they had stopped counting the regular silver badges years earlier when the number was around 10,000. We used to joke that "every first born male child west of downtown" was issued a badge. It's only funny until you start finding those badges in the possession of people you're arresting.

If you owned a business that operated in that part of town, not only did you want to contribute to the right election campaigns, but you hired their officers for security and gave "discounts" to their supervisors and commanders. You could always tell who played ball, because all the corporate officers had captain's badges. Those who didn't go along with the plan found themselves constantly the target of regulatory investigations by various agencies and inspectors.

Or even worse.

Enough voters got together to elect one of my former sergeants as the agency chief of that problem police agency. He was motivated to run for the office while working off-duty at his retail store when he was visited by one of the other agency's officers one day. The officer tried to shake him down - insinuating that without the extra police protection his business might get burglarized. The elected agency chief that he replaced eventually was convicted of theft and money-laundering and packed off to prison.

When I read the article Utrecht posted about a city council member who interfered in a police investigation of her friend and neighbor, it's all too familiar because that kind of thing happens everywhere. Politicians are used to dealing in favors for supporters, and crushing opponents. The message she's sending seems clear: She's immune from arrest and wants to extend that to her friend, and she's not afraid to flaunt the fact that she's voting on the police pension.

Politicians everywhere expect special treatment, and in fact something similar happened here recently, but with different results. Council's Johnson questions HPD motives (w/video) | Houston & Texas News | Chron.com - Houston Chronicle
Quote:
Mayor Annise Parker issued a statement on Johnson's arrest: 'The arrest of Council Member Jarvis Johnson is not related to his position or work as a member of Houston City Council. He has a right to due process. The justice system will run its course. Beyond that, I will defer to the facts in the public record.'
I'm not saying Houston does it better than Dallas. At the moment it appears that in Houston a city council member's powers do not extend to improper influence over who gets arrested and who doesn't. It looks a little hazy in Dallas. What I am saying is that there is a very fine line between proper political oversight and undue influence, and I'm saying that it sounds like some folks in Dallas are playing close to the line. IMHO, the Dallas pension plan is just the lever that's currently being used to shift power, and blur the line between proper oversight and undue influence.

The bottom line is that whether you work at MegaCorp or MegaPD, it sucks to lose your pension. The difference is that at MegaCorp the mistakes and successes are measured in dollars on the annual report. At MegaPD we measure dollars in our annual report as well, but we also measure deaths, imprisonments, lawsuits, etc. You can have high expectations on the quality of police service delivered, or you can go cheap and live with whoever shows up. People are attracted to police work for a lot of different reasons, but the good people are attracted and stay because they make a choice that is mostly based on the economic realities. Unlike MegaCorp and its widgets, when you buy police service you're paying for something that you can't competitively buy at the moment of purchase.
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Old 11-06-2010, 12:28 PM   #9
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Politicians react to their constituant's desire for a free lunch.
CEO's react to investors who want to maximize ROI.

And if either argues the point they're out of a job.

The boogeyman is overrated IMO.
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Old 11-06-2010, 12:40 PM   #10
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A couple of comments.

Quote:
Originally Posted by Leonidas View Post
The bottom line is that whether you work at MegaCorp or MegaPD, it sucks to lose your pension. The difference is that at MegaCorp the mistakes and successes are measured in dollars on the annual report.

The MegaCorp comparison is accurate about the measurement. However, the number of MegaCorps is shrinking, the number of MegaCorps offering DB plans is few, the number of MegaCorps offering plans similar with colas and health benefits is what?

So, I think the MegaCorps comparison is not useful anymore for comparisons.

In the past government employees were able to improve their benefits and salary by pointing to the private sector - MegaCorp -and saying we deserve more. In the future this will work against the government employee as the taxpayer questions why the government employees have a better total compensation (salary + benefit) than the taxpayer.


Quote:
Originally Posted by Leonidas View Post
At MegaPD we measure dollars in our annual report as well, but we also measure deaths, imprisonments, lawsuits, etc. You can have high expectations on the quality of police service delivered, or you can go cheap and live with whoever shows up. People are attracted to police work for a lot of different reasons,
True

Quote:
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but the good people are attracted and stay because they make a choice that is mostly based on the economic realities. Unlike MegaCorp and its widgets, when you buy police service you're paying for something that you can't competitively buy at the moment of purchase.
I think people stay in the PD (or the PD field local, state, federal) for the same reasons as in the private sector. If a person starts out as an basic accountant and then through education and experience they become a CPA they stay in the field because of the same economic factors (not the only factors) as a person in the police field who has advanced.

As to the corruption aspect - if the police are not paid adequately -, there is corruption now as you point out. The question is: what is the proper level of compensation?

This is correct.
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Originally Posted by Midpack View Post
I'm sorry to hear that your pension is under threat, but times are tough all over. My MegaCorp pension was frozen/stopped accruing in 1994 if it makes you feel any better. Many have already been pinched, and sooner or later every pension will be attacked when all is said and done.
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Old 11-06-2010, 04:12 PM   #11
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Quote:
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People are attracted to police work for a lot of different reasons, but the good people are attracted and stay because they make a choice that is mostly based on the economic realities. get to shoot guns and drive fast.
Fixed it for you.
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Old 11-06-2010, 05:34 PM   #12
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Originally Posted by keegs View Post
Politicians react to their constituant's desire for a free lunch.
CEO's react to investors who want to maximize ROI.

And if either argues the point they're out of a job.

The boogeyman is overrated IMO.
I'm not sure what "boogeyman" you are referring to.

You are correct that politicians love to sell snake oil to voters in the form of programs and services at no taxpayer expense. They leave the consequences for the next administration. When the voters finally figure out the truth, the salesman has long since moved on.

But there is a life cycle of consequences to robbing Peter to pay Paul that I've seen several times in my career:
Administration A decides it has to cut the budget and stops hiring, or cuts pay, or defunds certain functions within the agency. Bad stuff doesn't happen overnight, and in fact might take several years to come to light. But quality people decide to work elsewhere, or they reduce their output, or people are forced to take shortcuts to make up for the lost capabilities.
Administration B comes along and inherits a ticking time bomb. The crime rate goes up (slightly at first but then accelerates), people are wrongly convicted based on crappy police work, people and business stop moving to town and the tax base goes to hell. Only after the people and media are in an uproar does Administration B discover the problem. Only then does Administration B discover that you can't just hang out a shingle and hire the kind of people you need today because it takes years to attract them, train them, promote them, etc. Meanwhile Administration B has to stretch the budget by paying overtime to the people left on the job so they will work the extra hours to cover what new hires will eventually do. And/or it pays out millions in taxpayer dollars to satisfy judgments.
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Originally Posted by dex View Post
The MegaCorp comparison is accurate about the measurement. However, the number of MegaCorps is shrinking, the number of MegaCorps offering DB plans is few, the number of MegaCorps offering plans similar with colas and health benefits is what?

So, I think the MegaCorps comparison is not useful anymore for comparisons.
I agree. It wasn't my comparison, I was just responding to Midpack's comments, which were in effect a comparison to what has happened to many MegaCorp DB pensions. I was trying to point to the reasons why the comparison wasn't valid.
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In the past government employees were able to improve their benefits and salary by pointing to the private sector - MegaCorp -and saying we deserve more.
Given all the different state, county and city governments in this country, and an even larger number of employee bargaining units, and God knows how many different concepts of bargaining there are - I would not be surprised that any number of sales gimmicks have been used to sell people on salary increases for city employees. I can only talk about what happened in one city, and most of that only for one group of employees.

And, to reiterate, I'm only talking about cops, and not firefighters, EMTS, ditch diggers or trashmen.

If somebody is motivated to pay me more because they think I deserve it, than I will be pleased and genuinely honored to take that money.

But from what I know of the actual negotiations between the city and my MBA, the conversation centers on competing against other employers. Even though we are a local agency we compete nationally for applicants for the same limited pool of applicants. Remember, police agencies reject more than 95% of all applicants as being unsuitable for the nature of the employment. When I was in Recruiting years ago we ran though nearly 15,000 applicants a year - at that rate it doesn't take long to go through everybody locally.

When it comes time to figure out salaries they would first look at what it took to lure people away from the recruiting offices of Dallas PD, San Antonio PD, Ft. Worth PD, and also places like Los Angeles, CHP, Miami, Chicago, NYPD, etc. Entry-level salaries will help to set what salaries are for more senior employees and upper ranks.
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In the future this will work against the government employee as the taxpayer questions why the government employees have a better total compensation (salary + benefit) than the taxpayer.
That kind-of, sort-of sounds like the whole fairness thing again. But based on the way you phrased your question, let me ask you this: What does that matter except for it being another way of expressing fairness?

Given the widely varying incomes in the population, which taxpayer's salary do we choose to make the comparison? Yours? The part time secretary at the local charity? The owner of the local football team? How does this line of reasoning not turn into: "it's not fair because they make more than me."

IMHO, as an employer, the average taxpayer should be concerned if he is getting the service he asked for and paying the commensurate price. Nothing more and nothing less. It's the same standard I assume that everyone applies to anything else they buy - "did I get what I asked for and did I pay the right price?"

Which prompts one to wonder - what is the right price for police service? And not just police service, but all the different kinds of police services.
Quote:
Originally Posted by dex View Post
I think people stay in the PD (or the PD field local, state, federal) for the same reasons as in the private sector. If a person starts out as an basic accountant and then through education and experience they become a CPA they stay in the field because of the same economic factors (not the only factors) as a person in the police field who has advanced.
Sorry, but I'm not 100% clear on what your point is here.
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As to the corruption aspect - if the police are not paid adequately -, there is corruption now as you point out. The question is: what is the proper level of compensation?
As long as human beings are in charge there will always be the danger of corruption. Too much power, sex, and money out there to think that everyone will always be immune to the lure.

Corruption has numerous causes - poor compensation is just a piece of it. I've seen rookie patrolmen making a few bucks an hour air some major public laundry, and then I've seen supervisory federal agents making 150 grand a year do some rotten stuff.

I don't know how other agencies justify their hiring practices, but at my agency we spent a lot of money in the late 1970's to hire a group of academicians to come up with legally defensible BFJQs that were specific to the job in this city. That was followed by similar studies on what training was required and where the standards should be set in order to best indemnify the city against lawsuits for inadequate training. The same was done for field training. Add applicants and stir to see how successful you are at a certain salary.

Retention rates and why we lost people before normal retirement were a continuing study for the HR people and the command staff. The goal was always to hire the right people with the right backgrounds, train them adequately, supervise them adequately. The ultimate goal being to retain the experienced qualified people for a normal career, motivate enough of them to transfer or promote into more demanding positions so there was a continuity of experience and leadership, and minimize the lawsuit factor.

On years when the numbers went south on the front end of careers they knew it was time to boost salaries. When we would lose people earlier than normal at the end of their careers they knew it was time to re-plate the gold on the retention handcuffs.

Of course all of the above negates the realities of budgets, economies, politics and public opinion. So, you get years when it goes all wonky on the back end and 15% of the most experienced people put in their retirement in one year. That results in nightmares in the quality of supervision, management, and the more demanding investigations like homicides, sex crimes, etc.

Or, you find you can't hire adequate replacements just to keep even with normal losses and then the above scenario plays out in the middle of an economy that still has adequate jobs that are in the "don't get shot at" categories. Those are the years when salaries are raised and signing bonuses are paid (up to 30% annual salary at my employer in 2008).

Then you get years like the current one, and they have more people than they can handle down at recruiting. Of course the lost tax revenues mean they're not hiring that many people anyway, but at least they don't have to worry about salaries.

Then there are special cases, like New Orleans PD in the 80's and 90's. I'm not sure what standards they had on pay, hiring or supervision, but we used to joke that the recruiting division's job must have been easy: Open window, throw badges out, hire whoever picks one up.

It's about the money, but it's not all about the salaries. Even though most of any police agency's budget is spent on salaries, how you spend some of that other money is important too. In hiring, do you conduct thorough background investigations or do you literally phone it in? Some places they just call the local PD where you used to live and ask if they know anything about you. My agency sent two investigators to every place you ever lived or worked and knocked on doors asking "What can you tell me about Jane? Is she honest? Is she sane? Does she make good decisions? Would you feel okay knowing she had a badge and gun?

We polygraphed and drug-tested applicants for decades before federal agencies like the DEA ever did. Other agencies would get away with the state law minimum of any licensed physician signing off on your physical and mental suitability to be a police officer. We had on staff physicians and pshrinks back in the 70's - our first psych became a national expert on cops and their particular brands of craziness.

We spent oodles of money training supervisors, managers, and programs to try and catch problems early. Still, there were incidents and some of them doozies. Because the men and women who wear badges are still just human beings and we still toss them into a cesspool of temptation.

Despite knowing that you will never be 100% successful, you continuously strive to improve the quality of the people and the systems. All of that costs money - the good people to do the job, the training and tools they need, and equally good supervisors and managers to watch them like a hawk and make sure they're getting what they need to do a good job and are not out there running amok.

There is no-set-it-and-forget-it salary or cost for this service. It's a constantly moving target that is propelled by the economy, the market for jobs as a whole, the market for the subset of people acceptable as police applicants, retention rates, promotion rates, etc. That's not even mentioning all of the political weirdness that goes with police budgets and hiring. (There is a big switch out there, at least there was down at city hall in my city, on which one position was labeled, "CUT THE BUDGET NOW" and the other was labeled, "HIRE MORE COPS NOW!" There seemed to no middle position.)
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Old 11-06-2010, 06:04 PM   #13
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I suspect the motivation to reduce or minimize retirement benefits may be just as great in the public sector as it was in the private sector. The idea that benefits earned cannot be reduced or taken away has not been well tested.

Private sector executives have been richly rewarded for cutting costs and had no difficulty finding the legal support to do this even to the point of raiding supposedly arms-length funded pensions. There is a reason these corporate lawyers earn high 6 and low 7 figure incomes. There is no reason this same legal talent cannot turn to the public sector and advise political leadership on how to accomplish something similar that is, reducing future obligations and perhaps even finding a way to cut vested benefits. All the politicians need to do is find out how to pay them.

The payoff for public sector leaders is not compensation but freed budget that they can spend something they will look to with increasing desperation as demands for pension funding overwhelm other current obligations.
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Old 11-06-2010, 07:06 PM   #14
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Fixed it for you.
I'm sure you meant that with the best of intentions, but I'm completely lacking a sense of humor about getting shot at.

Thirty-one co-workers lost to violent deaths in twenty-five years - most of them lost to gunfire or vehicular accidents/assaults, with one burned to death, another drowned, one beaten by a crowd using iron rebar and 2x4's, and another died of a heart attack while working undercover. Some of those people were just faces that happened to be wearing the same uniform I did, and others were friends that I had known for years.

I couldn't even begin to count the number of crippled, wounded, maimed, etc. Some still on the job with their scars, and others rolling around in wheelchairs.

Shooting at paper silhouettes at the range lost all of its attraction once I encountered targets that shot back. I gained a new perspective about driving fast right after I saw my first mangled body in a car accident (the brilliant whiteness of the bones amidst all the redness of human meat still weirds me out).

While I'm not one for pushing the "pay me because I risked my life for you" button, I am not one who minimizes the risks, violence, or ruined lives that are left behind by the job. I'm particularly not having much of a sense of humor about it currently because of the recent death of a friend and former co-worker. She spent the last decade or so in a wheelchair after being shot in the neck by a drug dealer trying to kill her partner.
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Old 11-06-2010, 07:19 PM   #15
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My old pension from a fairly large municipal government was recently raided, too. The COLA went down from 3% to 1.5%, along with some other changes. If this were only for a few years, I could understand (in fact, for a few years, even 0% is reasonable). But it sounds like it will be for perpetuity. I am still at least a decade away from retirement, and should be able to recover through other savings. But I sure feel bad for the folks who are closer to retirement and who don't have a lot of savings.
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Old 11-06-2010, 07:35 PM   #16
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The Pension board member I talked to (who Ive known for 15 years) told me that our accrued benefits cant be changed. The President of the Police Association told me they can. He told me they can change the 3% per year multiplier for all of the years that I've already worked. I don't believe that's true, but I guess I could be wrong. It would be one thing to have a pension frozen like has happened to so many in the private sector, but to have the benefits that you've already earned, reduced would be a whole different story. If that is possible, and again, I don't think it is, you will be hearing about the City of Dallas on the National news soon, Trust me, it will not be pretty. Ever seen what happens when the Police Dept of a city with the 3rd highest crime rate in the country goes on strike?
I remember looking at your pension plan's report it was one of the more financially sound (with Leonidas being the only one that is/was "fully funded" IMO) pension I've looked at.

The ability for governments to reduce current pension is going to be one of the most important legal questions in the next few years. I am not surprised you got two different answers. A few months ago I listened to John Eastman former Chapman Law School Dean make the case for why governments could reduce pension his basic argument was follows.

Lets say when you joined the PD the pension was 2% year but required no contributions. Many years later the formula was changed to 3% year with contributions. John's argument was that government is only obligated to pay the 2%/year that was in effect when you joined. He made a pretty compelling argument IMO (I'm not a lawyer so my opinion is worth very very little in this matter) that any benefits granted retroactively were in fact unconstitutional. So if you worked for 10 years at 2% and 20 years at 3%, they couldn't give you the extra 10% pension for your first 10 years because you'd be receiving a retroactive pay raise. The last decade or so saw an increasing number of state and local add free/low cost medical care to the benefits of retired government workers. It will be interesting to see how this withstand court challenges. Now if you always worked for 3% than I don't think they have much of case but otherwise who knows.

A related issue is a can governments break contracts? For instance take a long term 40 or 50 year lease of a commercial building. It is unusual for the lease to last the entire 40 or 50 years. Typical either the landlord or the tenant will break the lease long before the 40 years are up. Breaking the lease (or any contract for that matter) typically involves some financially penalty. Dean Eastman felt that government should be able to break these pension contracts just like business can and have. Over course the 6.4 trillion question is what penalty will governments have to pay for breaking the contract.


As I said I am not a lawyer...YMMV.
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Old 11-06-2010, 07:48 PM   #17
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I'm starting to feel that we should not allow politicians to promise defined benefit pensions. They just can't be trusted to deliver year in and year out. It is way too easy for them to make promises that are twenty years out that someone else will have to deliver on.

I think we need to start switching everyone else to a defined contribution plan where the government's contribution gets put into the employee's 401k or 403b plan. That way the employee knows what they are getting each year and can't get swindled 20 years later by the current critters in office.

They will have to deal with managing their own money, but that seems better than dealing with the possibility that they'll get to the end and get short-changed.
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Old 11-06-2010, 07:54 PM   #18
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They will have to deal with managing their own money, but that seems better than dealing with the possibility that they'll get to the end and get short-changed.
It's better to short-change them from the start, so they don't get short-changed at the end. Am I following your thought?
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Old 11-06-2010, 08:10 PM   #19
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Clifp stated:

"Lets say when you joined the PD the pension was 2% year but required no contributions. Many years later the formula was changed to 3% year with contributions. John's argument was that government is only obligated to pay the 2%/year that was in effect when you joined"

In my case, the Pension fund is a totally separate entity from the Police and Fire Pension Fund. The City doesn't promise benefits so it cant take them away either. The City makes its contributions to the Pension fund and that's all it does. The Pension fund promises benefits. The Pension board consists of 10 members, 3 of which are City Council members, so I guess technically the City does have 30% of the votes on the board but its not enough to make changes that are not in the pension members best interests. They couldn't make changes without holding a vote of all members anyway.

What the City can do though is to hold an election and attempt to get the voters to approve a lowering of contributions. This would obviously be catastrophic for the funding of the pension fund. So what happens when the Pension fund can't pay the benefits it promised because the City lowers its contributions? The Pension board cant make any changes without a vote of its members and we aren't going to vote for major decreases.
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Old 11-06-2010, 09:20 PM   #20
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What the City can do though is to hold an election and attempt to get the voters to approve a lowering of contributions. This would obviously be catastrophic for the funding of the pension fund. So what happens when the Pension fund can't pay the benefits it promised because the City lowers its contributions? The Pension board cant make any changes without a vote of its members and we aren't going to vote for major decreases.
Heck if I know. But if I was a Dallas lawyer I'd sure want a piece of this action, chi ching..

Sorry to be flip, but a big messy legal battle seems like the only sure outcome.
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