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Old 11-01-2010, 12:45 PM   #121
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Please don't move to Wisconsin, we CAN'T AFFORD the pension payouts we're paying now. We have one of the highest tax rates in the country, so that's how we're "funding" it...........

But FD, we'd make great neighbors! We could go fishin', argue Bears vs Packers and all that kind of good stuff!

I know you Wis folks pay some pretty high taxes. But isn't that better than the Illinois situation where it's projected that within 8 yrs one third of our total tax revenue will be used to pay pensions? This doesn't include funding ongoing pension fund obligations for current employees, but just to pay the pensions of existing retirees. It's almost beyond comprehension.

And this because our "leadership" created a ponzi scheme assuming constant tax revenue growth and high portfolio returns for an infinite period while making wild promises to public sector employees.

The thing I like best about the Wis system is that there is no guaranteed cola. Retirees receive upward pension adjustments if investment portfolio returns are high enough that the fund is actuarily overfunded. (Full funding still takes place from taxes for the year.) In bad times, there is no increase and, in fact, past increases can be resinded. They use five year averaging to smooth things out so retirees don't get jerked around too much. You can never go below your original pension amount so, worse case, it's like a non-cola'd pension. Seems very fair.

Funded, flexible, transparent. Compared to our political machine, patronage dominated system, it looks pretty good.
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Old 11-01-2010, 01:30 PM   #122
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But FD, we'd make great neighbors! We could go fishin', argue Bears vs Packers and all that kind of good stuff!
I'm in for fishing, but the Bears still suck.........

Quote:
I know you Wis folks pay some pretty high taxes. But isn't that better than the Illinois situation where it's projected that within 8 yrs one third of our total tax revenue will be used to pay pensions? This doesn't include funding ongoing pension fund obligations for current employees, but just to pay the pensions of existing retirees. It's almost beyond comprehension.
The Republican candidate for governor is serious about putting in a toll road to make money from all those rich Illinois folks that travel to their places up north. If we do that then we could COLA those pensions..........

Quote:
And this because our "leadership" created a ponzi scheme assuming constant tax revenue growth and high portfolio returns for an infinite period while making wild promises to public sector employees.
Yeah, well, it's not like Chicago is known for ETHICS in their elected officials..........

Quote:
The thing I like best about the Wis system is that there is no guaranteed cola. Retirees receive upward pension adjustments if investment portfolio returns are high enough that the fund is actuarily overfunded. (Full funding still takes place from taxes for the year.) In bad times, there is no increase and, in fact, past increases can be resinded. They use five year averaging to smooth things out so retirees don't get jerked around too much. You can never go below your original pension amount so, worse case, it's like a non-cola'd pension. Seems very fair.
Yeah, my dad always bitches because he is 50/50 in his pension mix, mom never complains because she did the 100% fixed...........
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Old 11-01-2010, 01:39 PM   #123
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I have no idea where you would get quintiles or any other info on federal retirement other than averages. If the information exists, it's not readily available. As to ages of retirement, I don't see what the issue is. The average age for feds to retire is 60. Some take early outs with large penalties when they are leave early. Others leave with no pension, but keep their money in the plan and draw a pension at 62. There is no way to explain all the variations on the the systems work, especially FERS without reading the info on the OPM pages. And, as I said, once the 20% of feds who are CSRS leave (in less than 10 years), the age will rise as SS becomes a more significant part of retirement. Are the penions COLA'd - yes - for FERS, CPI less 1%. For CSRS - CPI. So for 2010 and 2010, all federal and military retirees receive -0-, zip, nada, nothing, just as SS beneficiaries.

We do recieve healthcare at the same rate as active employees - a big
benefit. But most employees wowrk for very large companies (don't compare the fed to Burger King) pay a LOT less for their health insurance while they are working. Not much else in the way of additional benefits - we do pay for Medicare, and get unsubsidized LTC, dental and vision coverage.

Most SES employees earn between $160 and $175K. Under CSRS, they get 56.25% of their high 3 salary if they retire at 55 with 30 years of service. At 60, they get 66.25% with 35 years of service, up to 80% with 41 years and 11 months of service. Once you are 55 with 30 years, the age ceases to be a factor. It's very different and more complex for FERS and they get 1% for each year of service and very large penalties for retiring early

You can no longer retire at age 62 with 5 years of service and receive 10% of your salary under CSRS. No one has entered the CSRS program since 1984. It's a non issue as the program has been closed for 26 years. If you retired under FERS at 62 with 5 years of service, I think (as in I'm not sure) you would get 5.5% of your high 3.

No one who currently works for the fed can work for 5 years and get 15% of their high 3. It's just not possible - trust me on this or look it up yourself. And don't lump fed retirement in with state systems - they are vastly different.

If you are talking about the impact on taxpayers from federal civilian pensions, it's a drop in the bucket compared to SS, medicare and medicaid. I believe there are about 4 million living federal retirees. I cannot remember the total outlay for them, but that info is available. Yes, it's probably more than most taxpayers who fund it get, but we also fund it, and those of us under CSRS did not have a 401K type plan (TSP) for much of our career and we were severly limited as to what we could contribute (with no fed match).

"Actually they do need more changes. They need to be more flexible so that they increase with good economic times and decrease with bad."

That's not a pension - that's a craps game in Las Vegas. It's also called totally doing away with any part of the pension that's defined and just making it a DC plan and you're on your own. That's not change, that's elimination.
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Old 11-01-2010, 01:58 PM   #124
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Please don't move to Wisconsin, we CAN'T AFFORD the pension payouts we're paying now. We have one of the highest tax rates in the country, so that's how we're "funding" it...........
I don't know what's worse, paying for pensions or financial advisors.
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Old 11-01-2010, 02:00 PM   #125
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Maybe as soon as those who have pension plans start caring about the increasingly raw deal the private sector "have nots" are getting, that can be arranged.

Two-way street. And the strife comes when people are trying to make it a one-way street, regardless of which direction they are coming from.

How about we defend retirement security for everyone regardless of where their paycheck comes from??
Ziggy- I am concerned about the increasingly bad deal for the private sector. But exactly what can I do about it? I comisserate with those who have been shafted. The company I work for now has screwed over their employees several times since I started working for them in terms of benefits and profit sharing and I have been very vocal about the injustice.

But I can only do this where I work. Your solution seems to be "I'm getting screwed, so we might as well screw everyone." I advocate DB pensions for everyone, but I wouldn't say to take it from workers who have it just because I don't have one.

You really do have a "get even" attitude - pretty simple - you don't have it, so why should I care if someone else has it. Do you say the same thing to people who have cars and homes nicer than yours and are public employees?

youbet - "We need to be assured that tax payers never see a day when their children are hungry because past promises to gov't employees cause increasing taxes while current employment opportunities are in the dumpster."

So federal, state and local pensions cause children to be hungry? That's a new one for me. I'm surprised you didn't blame global warming, cooling or movement of the Earth's crust on public employees also. The relationship of children going hungry to public penions is a pretty tenuous one - a very poor argument indeed .
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Old 11-01-2010, 02:17 PM   #126
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No one has entered the CSRS program since 1984. It's a non issue as the program has been closed for 26 years.
You're making me feel REALLY old!

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Yes, it's probably more than most taxpayers who fund it get, but we also fund it, and those of us under CSRS did not have a 401K type plan (TSP) for much of our career and we were severly limited as to what we could contribute (with no fed match).
Absolutely. I pay plenty of taxes, and in addition to paying 7% of my income into the CSRS system for my entire career (which will be 36 years when I retire in a couple of years) I'll continue to pay my federal taxes after I retire, until I die, hopefully way past 100 yrs of age!

I kind of think that makes me almost self-employed!
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Old 11-01-2010, 02:30 PM   #127
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This bickering and resentment is all part of the plan.
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Old 11-01-2010, 02:39 PM   #128
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Ziggy- I am concerned about the increasingly bad deal for the private sector.
...

You really do have a "get even" attitude - pretty simple - you don't have it, so why should I care if someone else has it. Do you say the same thing to people who have cars and homes nicer than yours and are public employees?
I am at a loss as how you tie your response to what ziggy has posted.

He hasn't said anything remotely close to that, IMO. I'll (awkwardly) paraphrase it as: ' don't expect to garner sympathy and support and a willingness to pay higher taxes to support public pensions that are generally more generous than private pensions from those people with the lesser private pensions'.

Big difference between "getting even" or "envy" and resenting someone asking you to pay for what they have, esp when what they have is better than yours.

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Old 11-01-2010, 02:45 PM   #129
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I don't know what's worse, paying for pensions or financial advisors.
Well you don't pay, so quit your whining.........

We could always start alking about car dealers again........
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Old 11-01-2010, 02:46 PM   #130
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You can no longer retire at age 62 with 5 years of service and receive 10% of your salary under CSRS. No one has entered the CSRS program since 1984. It's a non issue as the program has been closed for 26 years. If you retired under FERS at 62 with 5 years of service, I think (as in I'm not sure) you would get 5.5% of your high 3.
under FERS if you only have 5 years of service at age 62 you can/will get 5% (not 5.5%) of the average of your high 3.


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If you are talking about the impact on taxpayers from federal civilian pensions, it's a drop in the bucket compared to SS, medicare and medicaid.
the "impact" to the taxpayers from federal civilian pensions is nothing except the agency contribution to the pension fund that is paid every payday for each current employee, just like SS or any other DB plan. that money (both agency and employee contributions) is invested in US bonds which do earn interest. that pension fund is not underfunded and the contributions have been changed in the past to keep it that way.
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Old 11-01-2010, 03:07 PM   #131
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Well you don't pay, so quit your whining.........

We could always start alking about car dealers again........
Car Dealers, what's that?
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Old 11-01-2010, 03:50 PM   #132
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Car Dealers, what's that?
Just messin' with ya............
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Old 11-01-2010, 04:08 PM   #133
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Unless I am reading too fast, you have left two important factors out of this calculation:
1) employer match. My contribution to the pension system is 8.03% and my employer puts in an equal amount so the total contribution is 16% of each employee's salary. Of course the amount of contribution and the extent of the match varies from system to system. Does your "total contribution of 10-12%"include employer match as well as employee contributions.
2) people who leave the system before vesting. Employees who leave the City of Seattle retirement system for another employer before vesting (at 5 years of service) receive their contributions back with accumulated interest calculated at an assumed value, but the employer match that was put in the system for their salary stays in the Seattle system. Employees who leave after five years of service have the option of leaving their contributions in the system and receiving a pension when eligible based on age and years of service, or withdrawing their contributions and interest. In the latter case, their employer match stays in the system as well.

I think both of these factors would tend to improve the funding insufficiencies you point out, but no time now for calculations, I have to go to w@rk
I absolutely am including the employee contribution to arrive at my 25-35% figure. I am assuming that the state or city kicks in 10-12% although in both your and Nun's case the employee contribution is well below that level. We've already discussed the underfunded Seattle pensions in the past.

You are right that people leaving before vesting would help the funding. On the other hand how many of your older co-workers have quit their jobs in the last couple of years to take a private sector> I am guessing the number is quite small. I am also not accounting for the people who start government jobs in their 50s work 10-15 years and then are eligible for 20-40% pension in their early 60s they make the situation worse, especially for health care.
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Old 11-01-2010, 05:21 PM   #134
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Average MA state pension is $26k a year and state employees don't get SS.
Pension can be taken at 55 with at least 10 years service. There is a 10 year vesting schedule. Employees contribute 9% of salary and 11% on earnings above $30k. The state contributes 5%.

The issue with state pensions is the same as with many private pensions. Risky investments and poor returns. The criticism should not be for the workers, but the treasurers and wall street con artists who have lost the money workers have earned and invested with the promise of income in retirement.

I went to the MA pension calculator and filled it out for my hypothetical teacher. If he retired today with 33 years of service at age 55 and a salary of 75K (the average MA teacher earned 68K in 2009) he would be eligible for a $37,125 not to far off from my 40K estimate. If he waited until 60 with 38 years his pension would increase to 57K year.

Of course, I assumed that MA was contributing above 10% year to employee pension funds not a pathetic 5%.

The problem is that the total combined (MA and teacher) lifetime contributions and earning are in the 350-450K range for the 55 year old and probably 700-900K for the 60 year old. If we use the high side of my estimate the TSP annuity calculator shows that an annuity with a COLA-lite increase would provide $35,400 for the 60 year old, and mere $14,800 for the 55 year old. To put it another way in order to properly fund the 55 year teachers retirement he and the state contributions would have needed to save $1.1 millions. The only way to do with employees contributing 9/11% and the state kicking in 5% is to have Warren Buffett as the pension fund manager.
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Old 11-01-2010, 05:49 PM   #135
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Hi, I am one of those from Ma. that has just received his first retirement check after 34 years of service. It is true that we pay 11% of our salary to our retirement but the state only has to kick in 2% and most of us are not eligible for SS and those who are it is reduced dramatically. Love this retirement thing
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Old 11-01-2010, 06:08 PM   #136
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I'm surprised you didn't blame global warming, cooling or movement of the Earth's crust on public employees also.
Actually, after my trip to the local license bureau (DMV) this past spring to title my RV, I was more tempted to blame the spread of sleeping sickness on public employees! But that's another story.........
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Old 11-01-2010, 06:15 PM   #137
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The Republican candidate for governor is serious about putting in a toll road to make money from all those rich Illinois folks that travel to their places up north. If we do that then we could COLA those pensions..........
Ya know FD, those toll-less interstate highways you have are confusing for us Illini. When I'm driving up there, I always roll my window down and toss out a handful of coins every few miles since I'm so used to it!

BTW, we've now modernized. the Precinct Captain now accepts credit cards for payola (to get services such as garbage collection or to have the police chase the hookers and drug dealers from in front of your home) instead of the usual plain brown bags of small denominated bills. Bet ya can't say that about Wisconsin!

Wisconsin - Illinois' biggest state park!
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Old 11-01-2010, 08:27 PM   #138
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You're all going to love this article from today's Washington Post :

Federal Eye - Federal salaries fall behind private sector, panel says

I just can't imagine the reactions
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Old 11-01-2010, 08:34 PM   #139
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You're all going to love this article from today's Washington Post :

Federal Eye - Federal salaries fall behind private sector, panel says

I just can't imagine the reactions
You oughta be ashamed of yourself.....
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Old 11-01-2010, 08:34 PM   #140
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Actually they do need more changes. They need to be more flexible so that they increase with good economic times and decrease with bad. We need to be assured that tax payers never see a day when their children are hungry because past promises to gov't employees cause increasing taxes while current employment opportunities are in the dumpster.

I like the Wisconsin system. It has 100% current funding (tax payers take the pain up front) and the cola is based on market performance. Their pensions can actually decrease (and recently did) in times of poor investment performance. They share the pain along with the folks who are paying the bills.
What you are asking for is exactly what the federal FERS retirement system already does. The cost-of-living-adjustment (COLA) is based on the CPI minus 1%. In times of little or no inflation (like the last 2 years), when CPI has been flat, the COLA has been zero. So, it certainly does decrease with bad economic times. What other changes to the FERS system do you think are needed?
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