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Old 11-22-2015, 12:59 PM   #21
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There are a lot of fixes that can be made to many public pension programs without eliminating the pension entirely. For example, fix it so that the pension is on BASE SALARY, and not gamed with OT etc. Make it an average of more than the last few years - say 5 or more... some are as little as last 2 years.

Here in San Diego they eliminated the pension for new city workers... what many voters didn't realize is that was MORE expensive for the city since they now had to pay in the employer side of SS taxes.

I'm not anti public pension (or private pension)... but I think that some people gaming the public pension system gives a bad name to all public pensioners... lets eliminate the means to game the system.

As far as firefighters and education, a friend is a firefighter here in San Diego. He has an undergraduate from Yale, MBA from Harvard, was a Navy Seal and worked for Goldman Sachs as an investment banker. He felt a calling to do public service. His family lives a middle class lifestyle... not nearly as posh as if he'd stayed on Wall Street. And he's a lot more educated than most folks I know. I don't think you can paint firefighters as uneducated.

Edited to add - looks like NW-Bound posted while I was writing this. Sounds like my fix wouldn't work in AZ...
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Old 11-22-2015, 01:03 PM   #22
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Originally Posted by daylatedollarshort View Post
I don't have a crystal ball, but there are a lot more voters without public pensions than with public pensions, and will be a lot of voting seniors living on SS alone in the coming years, who may not be sympathetic to tax increases for other retirees with pensions who are making 4 times or more income.
Not 4 times but more like 8 times average SS payment.

Average SS benefit 16k a year average Southern California Firefighter benefit 130k a year retiring in 50s.

https://www.ssa.gov/news/press/basicfact.html
Newspaper probe alleges nepotism among L.A. firefighters
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Old 11-22-2015, 01:06 PM   #23
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I am a retired Firefighter ( college graduate),and not a millionaire. We earned our pensions ( two of my co-workers were burned to death fighting a fire last year).Eta 2020 -you should be more careful with your uninformed comments.
It is too bad, Jpg, but this misinformation is propaganda from right wing media and corporate interests.
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Old 11-22-2015, 01:09 PM   #24
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Originally Posted by rodi View Post
There are a lot of fixes that can be made to many public pension programs without eliminating the pension entirely. For example, fix it so that the pension is on BASE SALARY, and not gamed with OT etc. Make it an average of more than the last few years - say 5 or more... some are as little as last 2 years...

Edited to add - looks like NW-Bound posted while I was writing this. Sounds like my fix wouldn't work in AZ...
Nothing is as simple as we think, is it? Once people are given something, it is very difficult to take it back.

Hey, how the heck they were able to take away "file-and-suspend" with SS? Darn!

See how one can sue the state or city governments, but one cannot sue Uncle Sam.
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Old 11-22-2015, 01:12 PM   #25
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For many states I don't think there will be a big problem with funding. But for states like Illinois that is experiencing population decline and net job losses year after year, when does it go from a slightly higher burden for all to a death spiral? Sure I can reluctantly tolerate another $200/year in taxes to get the finances in order but once the streets, lights, parks, etc... start to decline on top of my increased tax costs then what am I getting?
Illinois needs to get its corporations off the dole and stop corporate welfare and they will be just fine. And if they are afraid they will pick up and leave....well...I don't think the grass is any greener on the other side.
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Old 11-22-2015, 01:33 PM   #26
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Although my pension is currently fine, if something happens, I would rather tweak it a bit early than see the heads go in the sand until its too late. Some of these court rulings may be short sighted and end in bankruptcy issues creating more painful cuts in the end. So many levers can be gently pulled. Reducing COLA's (if applicable), increasing employee contribution rates, raise minimum wage to draw pension, without increasing needed years to work, lowering multiplier, gaming strategies, etc. But just doing nothing and let pension systems draw down to 30-40% prefunding levels while saying nothing can be done to change system hurts everyone and will ultimately blow up the system.


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Old 11-22-2015, 01:34 PM   #27
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Apocalyptic thinking has a long history. It seems to be popular in retirement planning too. Like all visions of the apocalypse, they are worst than reality.
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Old 11-22-2015, 01:42 PM   #28
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In San Jose, Chuck Reed's Measure B is quietly being undone by his successor, who won in a close race with another candidate that ran on a platform of getting out from under the legal mess and returning to the old system. Reed's state-wide ballot initiative initiative is not gaining much traction, either.

I don't think the political will to make major changes exists yet, at least not in California. Like so many other touchy issues, it's easier to kick the can down the road than to come up with reasonable solutions that everyone can accept.
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Old 11-22-2015, 01:55 PM   #29
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In San Jose, Chuck Reed's Measure B is quietly being undone by his successor, who won in a close race with another candidate that ran on a platform of getting out from under the legal mess and returning to the old system. Reed's state-wide ballot initiative initiative is not gaining much traction, either.

I don't think the political will to make major changes exists yet, at least not in California. Like so many other touchy issues, it's easier to kick the can down the road than to come up with reasonable solutions that everyone can accept.
Pension reform will probably follow a similar path to drought measures. Better late than never but things had to get serious before big initiatives with public support were undertaken. Now the newspapers try to find out the highest individual household water users and report on the water wasters with glee. I see the same level of reporting and interest in finding out the most outrageous public pension spikers / loophole abusers in our future.
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Old 11-22-2015, 02:09 PM   #30
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It is one thing to have a seriously underfunded public sector pension plan.

It is quite another if that same jurisdiction has a shrinking population, an aging demographic, and zero growth or a reduction in good paying jobs or a combination of all three as some in fact do.

The combination of these would, IMHO, call for some immediate financial planning.

Politicians are reluctant to act-if only because of the significantly higher voter turnout in those aged 55 and above.
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Old 11-22-2015, 02:17 PM   #31
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As far as firefighters and education, a friend is a firefighter here in San Diego. He has an undergraduate from Yale, MBA from Harvard, was a Navy Seal and worked for Goldman Sachs as an investment banker. He felt a calling to do public service.
No disrespect Rodi, but that sounds like character from one of the Steven Seagal's movies
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Old 11-22-2015, 02:18 PM   #32
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Articles about individuals or groups maximizing their pensions by working the systems have been published in the LA Times and SF Chronicle every few years for at least 20 years. There is about 15 minutes of outrage, a few people hide from the cameras, and then everyone goes on with their lives.

The tax increases that Emanuel has proposed in Chicago may draw more attention, because now a concrete number by which taxes will go up to pay for pensions will appear on property tax bills. That may result in some more effective outrage.

CalPERS is so big, with so many agencies and entities contributing to different plans, it will be difficult to get any unified opposition. One entity may encounter problems, while others may not. Not like City employees in Detroit that will take cuts via bankruptcy, or the Chicago situation.

People also forget that these are not real numbers, but actuarial assumptions and projections. For as long as I can remember, those assumptions and projections have ebbed and flowed with the paper asset markets. During the internet bubble, the actuaries said a lot of systems were over funded. That led to benefit increases and cuts in agency payments into the system. People got used to that and did not adapt when the markets changed.
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Old 11-22-2015, 02:20 PM   #33
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Not 4 times but more like 8 times average SS payment.

Average SS benefit 16k a year average Southern California Firefighter benefit 130k a year retiring in 50s.

https://www.ssa.gov/news/press/basicfact.html
Newspaper probe alleges nepotism among L.A. firefighters
In MA the average state pension is $30k and its retirees get no SS because MA opts out. The pension is funded by an 9% (11% for the high paid) employee salary contribution and a 3.2% state match. If the state was to abolish the pension it would have to opt back into SS and pay the employer contribution of 6.2%. So MA is incentivized to keep the state pension. The high level of employee funding of the state pension is part of the reason the MA legislature has not been anxious to reduce the benefits of active employees.
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Old 11-22-2015, 04:10 PM   #34
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Did the rest of us not earn our pensions too? This tendency to split off public safety pensions or military pensions from criticism because uniform wearers are somehow more deserving just serves the divide-and-conquer strategy of those who'd like to see all pensions go away. If only public safety pensions remain they'll be that much easier to do away with.

Everyone who worked for a pension earned it.
Everyone who worked and was promised a pension deserves their pension, but uniform wearers ARE more deserving in my opinion and in the opinion of the majority of people. They risked their lives on a regular basis. Some of them were injured or killed and many of them have lingering work related injuries for the rest of their lives. You cant possibly think that compares to a guy who worked behind a desk at IBM. Mr IBM still deserves what he was promised but its apples and oranges.

If public pensions did away with things like using overtime in formula calculations, the whole pension under funding issue would be dramatically reduced. Between fixing those problems and lowering benefits for new hires, its actually a pretty easy fix.
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Old 11-22-2015, 04:21 PM   #35
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Everyone who worked and was promised a pension deserves their pension, but uniform wearers ARE more deserving in my opinion and in the opinion of the majority of people. They risked their lives on a regular basis. Some of them were injured or killed and many of them have lingering work related injuries for the rest of their lives. You cant possibly think that compares to a guy who worked behind a desk at IBM. Mr IBM still deserves what he was promised but its apples and oranges.

If public pensions did away with things like using overtime in formula calculations, the whole pension under funding issue would be dramatically reduced. Between fixing those problems and lowering benefits for new hires, its actually a pretty easy fix.
I have good friends who put in their 20 in the military while manning a lab bench at the Air Force Research Lab. My wife has another friend who has been a high school teacher for 30 years - most of that in dangerous urban areas. Do we really want to play the DESERVES card here?

I repeat, they both have done what was asked of them and both are equally deserving. Anything else and you start having to judge heroism on a case by case basis to see who merits a pension - which would make for horribly unworkable public policy.
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Old 11-22-2015, 04:27 PM   #36
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... During the internet bubble, the actuaries said a lot of systems were over funded. That led to benefit increases and cuts in agency payments into the system. People got used to that and did not adapt when the markets changed.
That is a problem with private pensions too. In good times, either benefits are increased or contributions reduced. Then, it is very painful to go back to the "old way", and take back what was given.

As I reported in an earlier post, the city of Phoenix tried to curb pension spiking with unused sick leave, but was taken to court. It argued that city management in July 1996 voluntarily chose to allow the practice and can change it at will. Did the judge agree with that? Nope.
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Old 11-22-2015, 04:44 PM   #37
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I have good friends who put in their 20 in the military while manning a lab bench at the Air Force Research Lab. My wife has another friend who has been a high school teacher for 30 years - most of that in dangerous urban areas. Do we really want to play the DESERVES card here?

I repeat, they both have done what was asked of them and both are equally deserving. Anything else and you start having to judge heroism on a case by case basis to see who merits a pension - which would make for horribly unworkable public policy.
We could argue back and forth all day, but the fact is that we disagree. We've been over this a million times here. There are so many disadvantages to having a public service job (and I would include teachers in jobs that I think are more deserving of their pension) that I cant even list them here. Anyone who thinks these people dont deserve their pensions more or are jealous of people with public pensions could've taken one of those jobs when they had the chance but most people don't want to make the sacrifice.

Private sector jobs have plenty of perks that public sector employees would never dream of getting. Retirement buy outs, signing bonuses, Christmas bonuses, being able to change companies and usually with a raise. Every job has pros and cons and everyone has the ability to choose the job they want. Of course not every single person in the military has a dangerous job, but the people working in labs also dont get paid as much in total pay.

And lets not forget that most pubic sector employees arent eligible for SS and most dont make anywhere near the $130K that someone listed earlier.

We could take a poll right now and I would bet that the majority of people here would not advise their son or daughter to join the military or become a police officer right now. There are obvious reasons for that but those jobs still need to be filled and the people who are willing to do those jobs against most peoples sane advice deserve to be rewarded.
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Old 11-22-2015, 04:51 PM   #38
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The Texas County Retirement works like this:

Here’s how the TCDRS plan works for county and district employees:

A percentage of each employee's paycheck is deposited into his or her TCDRS account. That percentage (from 4% to 7%) is set by the county or district employer.

The employee's savings grow at an annual, compounded rate of 7% interest.

At retirement, the employee receives a benefit payment for life that is based on the final account balance and employer matching. The plan’s matching rate — from "dollar for dollar" up to $2.50 for every dollar saved — is chosen by the employer.

Another thing not said is that they pay out 'your contribution' first. After all your money is gone they start on the Counties match. Your payment is based on an annuity at the time you start collecting. If you out live the time they predict, then there reserves pay out. Upon your death and that of your spouse, if you select coverage, your savings is returned to your estate, County match is not included.
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Old 11-22-2015, 04:58 PM   #39
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And lets not forget that most pubic sector employees arent eligible for SS and most dont make anywhere near the $130K that someone listed earlier.
Newspaper probe alleges nepotism among L.A. firefighters
Family members beat the odds in winning prized firefighting jobs - LA Times

That is not my listing. That is what newspapers report just as they report that 25% of hires where kids of public officials. BTW that is 130k COLA pension for life at a bit over 50 and not compensation.

As somebody noted such pension is unusual in other parts of US.
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Old 11-22-2015, 05:06 PM   #40
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Newspaper probe alleges nepotism among L.A. firefighters
Family members beat the odds in winning prized firefighting jobs - LA Times

That is not my listing. That is what newspapers report just as they report that 25% of hires where kids of public officials. BTW that is 130k COLA pension for life at a bit over 50 and not compensation.

As somebody noted such pension is unusual in other parts of US.
Those situations give all the other reasonable public pensions a bad name and its no wonder why California is in such bad shape.
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