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Old 06-25-2010, 11:44 AM   #61
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FWIW, each state is different. I am a state employee here in Texas. A software developer, and I am making much less then I did when I was in the private sector. The difference is so great that, despite the pension and job security, I am actually thinking about quitting and returning to the private sector once the economy is going strong again.

Personally, I would prefer if they nixed the pension plan and made our salaries more equitable with private industry (with salary incentives). Merit raises are almost nonexistent here without switching jobs, and we having had a COLA raise in 3 years.

You don't have to take my word for it. My salary and other Texas State employees are public domain.
To my knowledge, Texas doesn't have some of the extreme budgetary and pension woes that states like California and Illinois are facing. (Like all states it has a shortfall largely due to a bad economy and 10 years of terrible stock market returns.) When my wife was briefly in the Texas TRS, for example, the pension wasn't all that outrageous: had she stayed for 20 years and retired at age 60, her pension would have been 46% of the average salary over her final five years. (Having said that, there are municipal and county employment deals which are considerably more generous than at the state level.)

Most of the state and local governments with the worst pension problems are the ones which have the "3% at 50" type of plan (or close to it) where someone could hire in at 20, retire at 50, and receive 90% of their final pay as a pay with a COLA and health insurance for life. If they lived to be 80, they would have been paid 60 years for working 30.

Given that employee and retiree labor costs have been the fastest rising budget item over the last decade for many state and local governments, it's no surprise that the jurisdictions with the most generous total compensation packages are usually the ones in deep doo-doo.
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Old 06-25-2010, 01:14 PM   #62
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I don't see any conflict with what I posted. If your definition of 'qualified' is 'one of those top six people', and they won't take the job @ $300K, then you will need to do something to make the total package more attractive (not necessarily salary). It's that simple.-ERD50
Fair enough.
I only note that many of the "studies" do not look at this "quality/qualified" issue.
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Old 06-25-2010, 01:19 PM   #63
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Most of the state and local governments with the worst pension problems are the ones which have the "3% at 50" type of plan .

You are describing 3% multiplier
Other than police and fire fighters in a few places I know of no general state system with a 3 % multiplier

My multiplier was 1.82 percent
Pretty good table on police multiplier in
http://www.leoff.wa.gov/board/docume...sideration.pdf
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Old 06-25-2010, 06:47 PM   #64
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You are describing 3% multiplier
Other than police and fire fighters in a few places I know of no general state system with a 3 % multiplier

My multiplier was 1.82 percent
Pretty good table on police multiplier in
http://www.leoff.wa.gov/board/docume...sideration.pdf
Gee you must not be looking very hard, first the document you link to includes a 3% plan. Within 5 minutes I went to the CalPERS website and found several 3@50 and 3@55 for public safety retirement plans. These often cover employees (say dispatchers, or Desk Sergeant) who's job is no more dangerous than any other white collar worker.

I also found a 3@60% plan for local non safety workers which was particular sweet allowing a 20 year old to work for 40 years and retire at age 60 with 120% of the final years pay, and probably with spiking also.

Now I am not sure what you mean by "General State Systems", since almost all state have separate plans for different unions.

I am curious how many years do you work for your pension and what percentage of your salary did you contribute how much did you employer contribute?
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Old 06-25-2010, 07:04 PM   #65
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Gee you must not be looking very hard, first the document you link to includes a 3% plan. Within 5 minutes I went to the CalPERS website and found several 3@50 and 3@55 for public safety retirement plans. These often cover employees (say dispatchers, or Desk Sergeant) who's job is no more dangerous than any other white collar worker.

I also found a 3@60% plan for local non safety workers which was particular sweet allowing a 20 year old to work for 40 years and retire at age 60 with 120% of the final years pay, and probably with spiking also.

Now I am not sure what you mean by "General State Systems", since almost all state have separate plans for different unions.

I am curious how many years do you work for your pension and what percentage of your salary did you contribute how much did you employer contribute?
Where does it say they are "non safety workers" ?

I paid 7% of salary for a pension without a survivor benefit of 58 % of salary after 30 years. Very similar to the old federal CSRS. I also paid full social security
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Old 06-26-2010, 12:28 AM   #66
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You don't have to take my word for it. My salary and other Texas State employees are public domain.

Databases - State of Texas salaries | chron.com - Houston Chronicle
The compensation with the same title varies all over the map. Some psychiatrists make $150K+ and most make over $250K+. The same is true for titles "Programmer". A lots of them are making closed to $100K. BTW, the search fails to find "software engineer" or "Software Developer".
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Old 06-26-2010, 12:31 AM   #67
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Where does it say they are "non safety workers" ?

I paid 7% of salary for a pension without a survivor benefit of 58 % of salary after 30 years. Very similar to the old federal CSRS. I also paid full social security
From the introduction
"This publication describes retirement benefits and formulas for Local
Miscellaneous Members. “Local Miscellaneous” members are those employed by a public agency or special district that has contracted with CalPERS who are not involved in law enforcement, fire suppression, the protection of public safety, or employed in a position designated by law as local safety."

By way of comparison lets imagine a guy goes to work for a large private employer. The offer a 4% match but he wants to retire early so he maxs out the 401K (typically 12.5%) of his salary. Over the last 30 years inflation has averaged 3.3%. So for simplicity sake I'll use real returns but you can add 3.3% on the numbers.

Assuming the guy got 2% merit raise every year. He'd have accumulated 8.0 times his final salary after 30 years if he earned 5% (8.3% actual return) or 12.7x if he got a 6% return. (The 5% real return is right in line with Public Employee Pension plan estimates). It looks like a 50/50 mix of S&P 500 and Vanguard 500 would have had real return of ~5.3%

Assuming a 5% return if he turned his saving into annuity at age 52 (he took the job right out of college) he receive an annuity of 29.3% or almost exactly half your pension. If he waited until 62 to take the pension cause some plans penalize you before then, his pension would be a whooping 39.6% of his salary.

So roughly speaking a private worker would have a pension 1/2 to 2/3 as generous your pension despite contributing almost twice (12.5% vs 7%) of his salary.

To put another way. Pensions that allow somebody to work 30 years and than retire at any age without huge penalties, require massive combined employee and employer contributions, in the neighborhood of 30-35%.

Since states don't ask government employees to make anywhere near this level of contribution. The shortfall should be treated as significant benefit to the employees. In fact, I think if you have a 2%@50 or 2%@55 or better pension it is roughly equivalent to a 20% raise, and if you have a 3%@55 that is a 30% raise. The study you cited glossed over this big time.
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Old 06-26-2010, 01:48 AM   #68
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This is like all the other threads on govt pensions and bennies. Those who get them think they are only what they are due; those who don't think that they are more than a tad rich and are making it hard to fund road repair, active duty police and firemen and other necessry services performed by people atively working.

This is not a matter for logic or reason. It is a matter for raw political power.

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Old 06-26-2010, 04:30 AM   #69
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From the introduction
"This publication describes retirement benefits and formulas for Local
Miscellaneous Members. “Local Miscellaneous” members are those employed by a public agency or special district that has contracted with CalPERS who are not involved in law enforcement, fire suppression, the protection of public safety, or employed in a position designated by law as local safety."

By way of comparison lets imagine a guy goes to work for a large private employer. The offer a 4% match but he wants to retire early so he maxs out the 401K (typically 12.5%) of his salary. Over the last 30 years inflation has averaged 3.3%. So for simplicity sake I'll use real returns but you can add 3.3% on the numbers.

Assuming the guy got 2% merit raise every year. He'd have accumulated 8.0 times his final salary after 30 years if he earned 5% (8.3% actual return) or 12.7x if he got a 6% return. (The 5% real return is right in line with Public Employee Pension plan estimates). It looks like a 50/50 mix of S&P 500 and Vanguard 500 would have had real return of ~5.3%

Assuming a 5% return if he turned his saving into annuity at age 52 (he took the job right out of college) he receive an annuity of 29.3% or almost exactly half your pension. If he waited until 62 to take the pension cause some plans penalize you before then, his pension would be a whooping 39.6% of his salary.

So roughly speaking a private worker would have a pension 1/2 to 2/3 as generous your pension despite contributing almost twice (12.5% vs 7%) of his salary.

To put another way. Pensions that allow somebody to work 30 years and than retire at any age without huge penalties, require massive combined employee and employer contributions, in the neighborhood of 30-35%.

Since states don't ask government employees to make anywhere near this level of contribution. The shortfall should be treated as significant benefit to the employees. In fact, I think if you have a 2%@50 or 2%@55 or better pension it is roughly equivalent to a 20% raise, and if you have a 3%@55 that is a 30% raise. The study you cited glossed over this big time.
1) It gives formulas, nowhere does it say that there are specific workers covered by the formulas.

2) My law school classmates who went to work for megacorp averaged twice my government salary. I won't even talk about the ones in private practice.
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Old 06-26-2010, 07:01 AM   #70
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This is like all the other threads on govt pensions and bennies. Those who get them think they are only what they are due; those who don't think that they are more than a tad rich and are making it hard to fund road repair, active duty police and firemen and other necessry services performed by people atively working.

This is not a matter for logic or reason. It is a matter for raw political power.

Ha
Sorta true. But I don't think most of us "haves" are arguing that the pension systems make sense in today's world it is more of a outraged reaction to to the anger others seem to have that our choices 30 years ago worked out. I did a fair amount of college recruiting for the Feds in the late 70s and 80s. There were always a handful of people attracted by the "Ask not..." aspects but most denigrated public service as a backwater - uninteresting work (they were wrong about that) and no chance to get rich like they would in the private sector (wrong about that too for the most part).. And they viewed the retirement system as a negative in many respects since it demanded a long term commitment to pay off. Now, decades later "they" denigrate us once again - but this time because our choices happened to pay off.

So change the darn system going forward. But keep your hands off my golden handcuffs - I got them the old fashioned way, I earned them.
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Old 06-26-2010, 07:54 AM   #71
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1)
2) My law school classmates who went to work for megacorp averaged twice my government salary. I won't even talk about the ones in private practice.
What's stopping you to work in the private sector if it's so lucrative?
My brother-in-law works for the District Attorney Office of the Alameda county. He cites that the two main reasons that the public lawyers are staying: significant less stress and generous pensions.
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Old 06-26-2010, 08:03 AM   #72
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What's stopping you to work in the private sector if it's so lucrative?
My brother-in-law works for the District Attorney Office of the Alameda county. He cites that the two main reasons that the public lawyers are staying: significant less stress and generous pensions.
And, using similar logic, what's stopping you from working in the public sector where the pensions are great and the livin' is easy (or so I hear)?

It is normal human nature for us to think others are getting a better deal than we are and to be envious of that. I suggest that we would all be happier if we concentrated on whether our own situation meets our needs and make changes as necessary.
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Old 06-26-2010, 08:08 AM   #73
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FWIW, each state is different. I am a state employee here in Texas. A software developer, and I am making much less then I did when I was in the private sector. The difference is so great that, despite the pension and job security, I am actually thinking about quitting and returning to the private sector once the economy is going strong again.

Personally, I would prefer if they nixed the pension plan and made our salaries more equitable with private industry (with salary incentives). Merit raises are almost nonexistent here without switching jobs, and we having had a COLA raise in 3 years.

You don't have to take my word for it. My salary and other Texas State employees are public domain.

Databases - State of Texas salaries | chron.com - Houston Chronicle

Wow.... I LIKE this link... It seems that the Retirement system pays their guys a lot

And the psychiatrists are up there also... this is the list of the highest paid people per the site...


NameTitleDepartmentOvertimeTotal THOMAS HARRISCHIEF INVESTMENT OFFICERTEACHER RETIREMENT SYSTEM $434,680Details STEVEN CATHEYPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $325,470Details JACQUELINE JOHNSONDEP EXEC DIR OF INVESTMENTSEMPLOYEES RETIREMENT SYSTEM $301,500Details GAIL JOHNSONPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $294,645Details THOMAS MARETHPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $291,032Details PAUL BALLARDCHIEF EXECUTIVE OFFICERTREASURY SAFEKEEPING TRUST COMPANY $276,004Details BABUBHAI PATELPHYSICIANDEPARTMENT OF STATE HEALTH SERVICES $275,705Details GARY KULAPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $269,882Details LEE PARTRIDGEINVESTMENT FUND DIRECTORTEACHER RETIREMENT SYSTEM $269,213Details WILLIAM PHILLIPSPHYSICIANDEPARTMENT OF STATE HEALTH SERVICES $268,011Details LAUREN PARSONSPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $267,914Details PATRICK CLAPPERPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $259,256Details ELLIS CIVELLOPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $257,955Details RONNIE JUNGEXECUTIVE DIRECTORTEACHER RETIREMENT SYSTEM $257,075Details JANA TOYPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $254,175Details TRINA CORMACKPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $250,808Details ANN FUELBERGEXECUTIVE DIRECTOR FOR ERSEMPLOYEES RETIREMENT SYSTEM $244,080Details MICHAEL SAMPLESCHIEF INVESTMENT OFFICERTREASURY SAFEKEEPING TRUST COMPANY $243,809Details CHI CHAIINVESTMENT FUND DIRECTORTEACHER RETIREMENT SYSTEM $242,927Details LARRY HAWKINSPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $241,791Details OLAYEMI FANIRANPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $240,995Details JOSEPH BLACKPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $240,285Details CATON CUELLARPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $235,146Details FRANK ZAHNCHIEF FINANCIAL OFFICERTREASURY SAFEKEEPING TRUST COMPANY $230,950Details GERALDINE FARIAS-DANIELSPSYCHIATRISTDEPARTMENT OF STATE HEALTH SERVICES $229,806Details
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Old 06-26-2010, 08:12 AM   #74
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Ask not..." aspects but most denigrated public service as a backwater - uninteresting work (they were wrong about that) and no chance to get rich like they would in the private sector (wrong about that too for the most part)..
Example please ... I am not sure about other majors, but in electrical engineering or any physical science graduates there are NOT too many interesting jobs in the public sector (other than NASA). The opportunity to become an entrepreneur (in the high-tech industry) is also limited since you really do NOT develop any products in the public sector.

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So change the darn system going forward. But keep your hands off my golden handcuffs
I probably take the position if I had a pension that pays almost the same amount as if I were still working. Who cares about the source of funding as long as I am getting paid? Right?
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Old 06-26-2010, 08:17 AM   #75
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And, using similar logic, what's stopping you from working in the public sector where the pensions are great and the livin' is easy (or so I hear)?

It is normal human nature for us to think others are getting a better deal than we are and to be envious of that. I suggest that we would all be happier if we concentrated on whether our own situation meets our needs and make changes as necessary.
I hear you. Unfortunately, there were'nt too many interesting positions in electrical engineering in the public sector back in 1978.
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Old 06-26-2010, 08:20 AM   #76
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Wow.... I LIKE this link... It seems that the Retirement system pays their guys a lot

And the psychiatrists are up there also... this is the list of the highest paid people per the site...
There's a nurse that gets paid well also (while other nurses are making in the $50K range).
ANTHONY BIFFLE
NURSE
DEPARTMENT OF STATE HEALTH SERVICES
$152,176
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Old 06-26-2010, 09:54 AM   #77
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And, using similar logic, what's stopping you from working in the public sector where the pensions are great and the livin' is easy (or so I hear)?
The main rebuttal I'd have to this is that if the private sector deal one "signed up for" as a 20-something was taken away 10-20 years into your career, you're screwed. You can't go back and get those all-important years of service back for pension calculations. Your retirement is permanently impaired.

Yes, maybe you can change to public sector work in your 40s, but you won't get enough credited service time to get all that much when you are ready to retire. I think that's something the "go get a government job and stop complaining" argument fails to account for. Yes, we can get a government job now, but we've lost a lot of years once our private sector pension and retiree health insurance were taken away, years that equate to a significant chunk of lost potential pension income.

Like those who joined the public sector (say) 20 years ago, those who entered the private sector made a decision which often included pension and retiree health insurance benefits just like the public sector. So to say we "made our own bed" by not choosing a government job at age 22 is a little unfair unless you assume that we should have been able to "see the future" and know that the private sector employee would increasingly get screwed in the 21st century. That would be true of people who took jobs with no pension, but not for those who "signed up" for a job which had a pension that would later be frozen on us.

In short, those who say it's our own fault for choosing private sector work back when it also provided retirement benefits should also be prepared to offer us a time machine to go back and make different choices. Otherwise it's a rather unfair statement and feels "let them eat cakey" to me.
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Old 06-26-2010, 11:25 AM   #78
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The main rebuttal I'd have to this is that if the private sector deal one "signed up for" as a 20-something was taken away 10-20 years into your career, you're screwed. You can't go back and get those all-important years of service back for pension calculations. Your retirement is permanently impaired.
And those who chose a public sector job at lower immediate pay, but with a generous pension, can't go back and recapture those foregone years of higher earnings when their pension is reduced.

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those who joined the public sector (say) 20 years ago, those who entered the private sector made a decision which often included pension and retiree health insurance benefits just like the public sector. So to say we "made our own bed" by not choosing a government job at age 22 is a little unfair unless you assume that we should have been able to "see the future" and know that the private sector employee would increasingly get screwed in the 21st century. That would be true of people who took jobs with no pension, but not for those who "signed up" for a job which had a pension that would later be frozen on us
This sounds like my little brother when we were kids. Whenever he got in trouble, he would make sure to tell my parents something I had done wrong too, so that we both would get a beating and he wouldn't have to suffer alone. I don't think its fair when private employers retroactively cut pensions either. And, frankly, I don't see that as sufficient justification to cut public sector pensions. "Some got screwed so all must get screwed" is hardly a basis for sound public policy.

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In short, those who say it's our own fault for choosing private sector work
I don't fault people for any employment choices they made. When we are 22 years old, its hard to make any predictions about the future. I would suspect that not too many people make their initial choice of employment based on the ultimate pension possibilities. Some do, but I think it is rare. I was in the military when I was young, but didn't stay past five years, so no pension there. Then I worked in the private sector for the vast majority of my career, first as an engineer and then as a lawyer. I had a 401k, but never a company match. And now I am working for the state for the last few years of my career; I won't be here long enough for a pension. (and my pay is less than 25% of what I made in private practice.). In short, I chose what to do at various points in my life because that's what I wanted to do at the time and this debate is largely academic to me.

My point is that many, many people would rather complain that others have a better deal and try to drag them down rather than improve their own lot. I can't tell you how many times I heard that lawyers are overpaid. Since no one wants to hear that this stereotype is far from the truth, my usual response was to call their bluff and say "It's a free country. You should become a lawyer and get in on the gravy train." I knew they would always have some excuse why they couldn't.
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Old 06-26-2010, 11:44 AM   #79
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And, frankly, I don't see that as sufficient justification to cut public sector pensions. "Some got screwed so all must get screwed" is hardly a basis for sound public policy.
First of all, I have never advocated "screwing" anyone already in the system so this is already a non-starter, at least if it's directed at me.

Second of all, you don't seem to be accounting for the strong likelihood that some of us who already got screwed may face getting screwed a second time as we eat higher taxes and/or reduced services to maintain the deal for others which was taken away from us -- thus pushing our retirements even *farther* back than they already are, because higher taxes could reduce our ability to save for our own 401K-based retirement and other retirement investments. No one in politics and government seems to give a damn about the private sector folks who lost theirs, or care that their 401Ks suck and have probably delayed their retirement by several years.

If not screwing the public sector didn't likely require a second screwing of those already screwed, I think your assertion would be much stronger.

But in the meantime there is *zero* justification, IMO, for not pulling the plug on DB pension plans for new public sector hires in *most* occupations. If that means higher base pay and a 403B match, so be it (though the value of job security needs to be factored into total compensation). The sooner we stop compounding the problem by adding new participants, the less draconian the "fix" will need to be and the more likely it is we can continue to give the current deal to those already *in* the system to their retirement and beyond.
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Old 06-26-2010, 12:23 PM   #80
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Originally Posted by ziggy29 View Post
First of all, I have never advocated "screwing" anyone already in the system so this is already a non-starter, at least if it's directed at me.
Not directed at you in particular. You have been clear that the changes should not be retroactive. Others, however, have not.


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Originally Posted by ziggy29 View Post
Second of all, you don't seem to be accounting for the strong likelihood that some of us who already got screwed may face getting screwed a second time as we eat higher taxes and/or reduced services to maintain the deal for others which was taken away from us -- thus pushing our retirements even *farther* back than they already are, because higher taxes could reduce our ability to save for our own 401K-based retirement and other retirement investments. No one in politics and government seems to give a damn about the private sector folks who lost theirs, or care that their 401Ks suck and have probably delayed their retirement by several years.
In effect, we are all "customers" of the government. Like customers of any private business, part of the price we pay for the goods or services goes to compensate the employees who produced/provided them. Should the employees of GE or IBM or any other private company lose their pensions because you lost yours? Should Walmart squeeze its employees so it can lower its prices because you would like to pay less and retire sooner? (Yes, I know you will say "I have to pay taxes, I don't have to shop at Walmart". But, in general, we all have a basic basket of goods and services that we need to get from private companies. So you should view my examples collectively.) Generally, private companies price their products at what the market will bear -- they don't know or care about your personal financial situation when you step up to the counter to make a purchase, nor should they. The bricklayer who has ten kids and an unemployed spouse pays the same as the single millionaire hedge fund manager. At least with taxes richer people pay more.

And lest it be forgotten, public employees are taxpayers too.


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Originally Posted by ziggy29 View Post
in the meantime there is *zero* justification, IMO, for not pulling the plug on DB pension plans for new public sector hires in *most* occupations. If that means higher base pay and a 403B match, so be it (though the value of job security needs to be factored into total compensation). The sooner we stop compounding the problem by adding new participants, the less draconian the "fix" will need to be and the more likely it is we can continue to give the current deal to those already *in* the system to their retirement and beyond.
Sounds entirely reasonable to me. My major complaint has nothing to do with the merits of either side of this debate. Rather, I have been trying to point out the entirely self serving and irrational nature of some of the arguments on this thread (by a number of people on both sides), which in most cases could easily be turned around and used by the other side.
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