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Re: Public Pensions Bankrupt???
Old 08-10-2006, 08:58 PM   #41
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Re: Public Pensions Bankrupt???

Texas, 41 years paying into a pension system is a l-o-o-o-o-n-g time.

She's probably getting 2% year, but I'm going by Ontario standards. No one goes that long here. I went 33 = 66% and that's about average.

Age + experience = 85. I paid 9% per year and that was matched by the government.

After 41 years she would be well over 60 and with a life expectancy ~ 25 years her pp has the upper hand. I bet you could have done better if you had saved 10% per annum in a good balanced fund for that amount of time.
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Re: Public Pensions Bankrupt???
Old 08-11-2006, 01:07 AM   #42
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Re: Public Pensions Bankrupt???

Quote:
Originally Posted by Zipper
Texas, 41 years paying into a pension system is a l-o-o-o-o-n-g time.

She's probably getting 2% year, but I'm going by Ontario standards. No one goes that long here. I went 33 = 66% and that's about average.

Age + experience = 85. I paid 9% per year and that was matched by the government.

After 41 years she would be well over 60 and with a life expectancy ~ 25 years her pp has the upper hand. I bet you could have done better if you had saved 10% per annum in a good balanced fund for that amount of time.
I believe that she got 2.2 per year... she did NOT pay into SS, so that is why I put SS in my number.. I do not know her percentage withheld... any Texas teachers here

Also, she COULD have retired when she was 55 and started her pension right then with about a 66 to 72 percent of her salary...

Very few (if any.. that are not union..) private pensions will allow you to get 100% of your benefits at 55.. almost all require you to wait till 65.. so that is another 10 years without getting any money..
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Re: Public Pensions Bankrupt???
Old 08-11-2006, 01:21 AM   #43
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Re: Public Pensions Bankrupt???

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Originally Posted by setab
Federal employees work a 2087 hour work year which means hourly pay doesn't come out the same as the schedule suggests. (Any other business you know figure its pay on 2087 hours?)
My company used to calculate on a 2088 hour year... if you actually count the DAYS, they are right..

But, most public sector employees do not work the overtime that private sector people work... as an example, a daughter of a co-worker just started at the VA... she was told she can NOT under any circumstances work more than 40 hours a week... because they must pay overtime...

Now, my company would love me to work 80 hours a week.. so your argument on this goes out the window...

Public sector employees do not have to worry as much on layoffs... not that they do not happen, but it is much more rare that it happens.. (I had another sister work for a county.. she got laid off because someone with more seniority wanted her job!!! And the rules where she was said they could take a job if they were qualified and had more tenure.. so by by to my sister).. Our company has laid off thousand of people because they want to move processing to India.. or, they want to hire younger workers that make less, so there is a major layoff and then they start to hire people because 'business has picked up'.. but do not hire back the peopel they let go.. so, that one goes out the window also...

But, I will agree with you that there are a lot of people who work in public and want to do a good job.. and usually do a good job if the management does not get in the way.. so my hats of to all of you that do so..
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Re: Public Pensions Bankrupt???
Old 08-11-2006, 02:46 PM   #44
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Re: Public Pensions Bankrupt???

I treat my expected Social Security as a fixed pension, since I suspect future Medicare B costs with eat up the inflation adjustment.

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Re: Public Pensions Bankrupt???
Old 08-11-2006, 11:13 PM   #45
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Re: Public Pensions Bankrupt???

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Originally Posted by Cut-Throat
Big Article on this in the Minneapolis paper in the last few days about Duluth.
If you have an unfunded public pension, it isn't guaranteed by the Federal folks. When a city chokes, it chokes.
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Re: Public Pensions Bankrupt???
Old 08-12-2006, 01:04 AM   #46
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Re: Public Pensions Bankrupt???

Duluth's problems don't stem from its pension, but rather from its guaranteed free health care to all retired employees. Saying that's a generous benefit is an understatement.

Quote:
The city's human resources manager, Gary Meier, acknowledges that its retiree benefits are "generous" and says they influenced his decision to leave a better-paying job in the private sector in 2000.
How Duluth got into its problems is pretty typical of government planning. Or lack of planning as in this case.

Quote:
He said Duluth's plan dates to 1983, when city administrators agreed to it in exchange for workers' giving up the right to accumulate and cash large amounts of sick leave and vacation. "In 1983, we didn't have double-digit medical inflation," Meier said, "and they had no way of predicting that things would get so out of hand." Duluth's liability is at $300 million and growing by $40,000 a day.
It was only after they realized that they were in serious problems last year that anybody thought to have an actuary look at the numbers. They were $178 million in the hole then.

The city I work for has engaged in this kind of stupidity regularly. In the 70's when the local private sector was booming, they decided to give employees an enticement to stay in low-paying city jobs by allowing for unlimited accumulation of unused sick, vacation and overtime. Every pay raise and promotion was applied to all the hours in the accumulated banks. You collected a big fat paycheck when you retired, and people stayed thinking they could use the money to pay of mortgages and other debt. Ten years later a different administration was in office and they saw an unfunded liability growing out of control. The new plan was to freeze the dollar value of the time accumulated each year. Twelve years later, and under yet another administration, they realized that the tech economy was booming and they couldn't attract enough qualified applicants for low-paying jobs. Plus, the size of the checks they were writing to people leaving was hurting the bottom line. The new-new plan was to allow retirees to use all of their accumulated time just before they retired by taking a long paid vacation. The most recent administration comes into office and freaks out when they realize that, among other goofy things, they are paying a couple of hundred people like me to sit at home while they pay us our salaries. They start whacking away at the plan and in response nearly a thousand people retire rather than lose benefits. Ooops.

And so it goes. The first mayor who started this craziness in the 70's? Dead. The next was last heard of as a political consultant advising other mayors how to "run a city like a business". Her replacement is rich as hell and living in his penthouse, while his replacement is teaching "government and political affairs" in the Ivy League. Meanwhile the city, its employees and the taxpayers are left behind to clean up the mess.



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Re: Public Pensions Bankrupt???
Old 08-12-2006, 07:20 AM   #47
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Re: Public Pensions Bankrupt???

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Originally Posted by Leonidas

And so it goes. The first mayor who started this craziness in the 70's? Dead. The next was last heard of as a political consultant advising other mayors how to "run a city like a business". Her replacement is rich as hell and living in his penthouse, while his replacement is teaching "government and political affairs" in the Ivy League. Meanwhile the city, its employees and the taxpayers are left behind to clean up the mess.
My point exactly.... the first few guys took the easy route... instead of doing what was necessary, they kicked the can down the road KNOWING they would not have to worry about it..

ANY unfunded or underfunded pension or benefit plan is doomed to fail eventually.. without major changes or some heafty infusion of money... and what politician will say, let's cut services today so we can fund the pension plan

So, what do states do about it They pass laws stating that benefits can NOT be reduced... making it impossible to fix..
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