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Old 06-28-2010, 10:44 AM   #101
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Old 06-28-2010, 10:45 AM   #102
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Originally Posted by Texas Proud View Post
Public sector... you want squat to happen to your pension... even if it is unsustainable and it will cost your children and grand children a lot to pay for it... just saying...
Here we go again... Every time any of us public sector parasites gripe about proposals to retroactively screw our earned pensions I hear the refrain "no one said this should be retroactive, we are only talking about changing things going forward." Well I have not heard any public sector types here say that we shouldn't change things going forward so why accuse us of not wanting "squat to happen to our pension..even if it is unsustainable..." That would imply we think things should stay the same forever. How about citing some comments to that effect.
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Old 06-28-2010, 10:50 AM   #103
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Public sector... you want squat to happen to your pension... even if it is unsustainable and it will cost your children and grand children a lot to pay for it... just saying...
Nothing *can* happen by federal law -- nor should it -- for anything already earned. That's also true in the private sector pension plans.

Those are sunk costs and if it is painful for the taxpayer it has to be honored. The best we can do for our kids and grandkids is not throw more good money after bad. And the very first thing we should do for our kids and grandkids is to shut the door on these DB pension plans for most public sector new hires. If someone is drilling holes in a boat causing it to sink, it doesn't help much to patch the holes until you stop the guy drilling the holes. And every time we hire another public sector employee into a DB pension plan, we are drilling another hole. But sealing the holes won't keep the ship afloat until we can stop more holes from appearing.
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Old 06-28-2010, 10:58 AM   #104
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Well I have not heard any public sector types here say that we shouldn't change things going forward so why accuse us of not wanting "squat to happen to our pension..even if it is unsustainable..."
Perhaps not from posters here, I'd need to go back and try to find a comment to that effect - might be there, might not.

But I think we see this attitude in action. For example, Illinois is taking the tiny, teensie, baby steps of reducing some of the benefits earned forward, but only for people hired in 2011 or later. They really need to consider some cuts to the future earned benefits of current employees (leaving past earned benefits alone, as required by law). But it's not happening, and clearly because someone/group is saying " I don't want squat to happen to my pension..even if it is unsustainable...".

What other explanation is there?

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Old 06-28-2010, 11:44 AM   #105
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Perhaps not from posters here, I'd need to go back and try to find a comment to that effect - might be there, might not.

But I think we see this attitude in action. For example, Illinois is taking the tiny, teensie, baby steps of reducing some of the benefits earned forward, but only for people hired in 2011 or later. They really need to consider some cuts to the future earned benefits of current employees (leaving past earned benefits alone, as required by law). But it's not happening, and clearly because someone/group is saying " I don't want squat to happen to my pension..even if it is unsustainable...".

What other explanation is there?

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My state had no problem at all reducing "going forward" benefits for existing employees Did it back in 84 and several times since
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Old 06-28-2010, 11:58 AM   #106
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I used to work for a defense contractor, and I can attest to the fact that there was a *lot* of triple dipping going on.

A common career path in aerospace and defense is as follows:

1) Join the service and put in your 20 and retire;
2) Hire in with a defense contractor for another 15-20 years and retire;
3) Re-up as a consultant for the same defense contractor, getting a high hourly rate plus two pensions and Cadillac health insurance.
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Old 06-28-2010, 12:01 PM   #107
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Nothing *can* happen by federal law -- nor should it -- for anything already earned. That's also true in the private sector pension plans.

Those are sunk costs and if it is painful for the taxpayer it has to be honored. The best we can do for our kids and grandkids is not throw more good money after bad. And the very first thing we should do for our kids and grandkids is to shut the door on these DB pension plans for most public sector new hires. If someone is drilling holes in a boat causing it to sink, it doesn't help much to patch the holes until you stop the guy drilling the holes. And every time we hire another public sector employee into a DB pension plan, we are drilling another hole. But sealing the holes won't keep the ship afloat until we can stop more holes from appearing.

I am not talking about the sunk costs.... I agree they are due...

But someone who is 40 to 55 now and thinks that nothing should ever change with the percentages or the age or the cost of living or..... whatever... and there are a few on this board who have basically said it should not change..

I just wanted to point out... the system is not sustainable as is... just like SS and medicaire is not... future benefits will HAVE to change... the results without a change are not pretty... some sacrifice in future benefits will happen... the private sector made the decisions... the public will soon...
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Old 06-28-2010, 01:16 PM   #108
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I saw on the news that some city in California is laying off EVERYBODY... they did not explain why... just showing mad people...
That would be Maywood, California. They have a 450,000 dollar budget deficit on a 10.1 million general fund budget, cannot get insurance, and so plan to lay off all the employees, disband the police department, and contract operations out to the LA County Sheriff and the neighboring city of Bell.

Maywood to hire others to run the city - Los Angeles Times

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Last month, the California Joint Powers Insurance Authority notified Maywood that it was terminating general liability and workers' compensation coverage because the city posed too high a risk. A large number of claims filed against the police were a significant factor in that decision. Jonathan Shull, chief executive officer of the insurance authority, said Maywood was the first city to have its insurance cancelled by the group. The insurer acted after Maywood failed to make basic improvements the insurer had mandated, including hiring a permanent city manager, he said.
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Old 06-28-2010, 01:48 PM   #109
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That would be Maywood, California. They have a 450,000 dollar budget deficit on a 10.1 million general fund budget, cannot get insurance, and so plan to lay off all the employees, disband the police department, and contract operations out to the LA County Sheriff and the neighboring city of Bell.

Maywood to hire others to run the city - Los Angeles Times


Ahhhh... yes, this is it... so they did not have to lay off everybody.... I found this interesting...

"Officials estimate about half the city's residents are illegal immigrants."

"But Maywood was back in the headlines when it declared itself a sanctuary city for illegal immigrants, making the town a target of conservative talk radio and TV news shows."
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Old 06-28-2010, 02:42 PM   #110
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My pension is simply part of the compensation I agreed to many years ago.
So THAT'S the reason tuition increases are many times the cost of living............
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Old 06-28-2010, 02:55 PM   #111
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Here we go again... Every time any of us public sector parasites gripe about proposals to retroactively screw our earned pensions I hear the refrain "no one said this should be retroactive, we are only talking about changing things going forward." Well I have not heard any public sector types here say that we shouldn't change things going forward so why accuse us of not wanting "squat to happen to our pension..even if it is unsustainable..." That would imply we think things should stay the same forever. How about citing some comments to that effect.
"Changing things going forward" is a lot different that "not wanting squat to happen to OUR pension"......... With rare exceptions, the private sector has abandoned DB plans, because the company could no longer AFFORD them. However, public employees are protected by strong unions and politicians, and the taxpayer is viewed as a never-ending stream of money. If the govt told you they were going to reduce your public pension amount by 20% next year because your municipality could not AFFORD it, how would that make YOU feel??

So, its ok to screw the new hires, just don't mess with those with "seniority", or retirees, even if the promise is unsustainable?
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Old 06-28-2010, 04:27 PM   #112
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So THAT'S the reason tuition increases are many times the cost of living............
Tuition increases in state universities are largely due to
1) demand for more expensive subjects
2) reduction in state support
3) desire to study at a research university

they have studied the instructional costs of subjects taught in 1968 that are taught today. There is not much change relative to the cost of living
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Old 06-28-2010, 04:29 PM   #113
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"Changing things going forward" is a lot different that "not wanting squat to happen to OUR pension"......... With rare exceptions, the private sector has abandoned DB plans, because the company could no longer AFFORD them. However, public employees are protected by strong unions and politicians, and the taxpayer is viewed as a never-ending stream of money. If the govt told you they were going to reduce your public pension amount by 20% next year because your municipality could not AFFORD it, how would that make YOU feel??

So, its ok to screw the new hires, just don't mess with those with "seniority", or retirees, even if the promise is unsustainable?
In 1984 They raised the cost of our pensions to us by 40% for all existing employees.
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Old 06-28-2010, 05:35 PM   #114
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"Changing things going forward" is a lot different that "not wanting squat to happen to OUR pension"......... With rare exceptions, the private sector has abandoned DB plans, because the company could no longer AFFORD them. However, public employees are protected by strong unions and politicians, and the taxpayer is viewed as a never-ending stream of money. If the govt told you they were going to reduce your public pension amount by 20% next year because your municipality could not AFFORD it, how would that make YOU feel??

So, its ok to screw the new hires, just don't mess with those with "seniority", or retirees, even if the promise is unsustainable?
Not sure what you are saying here Dude. Yes, lots of companies abandoned DB plans and vested employees retained whatever they had earned to date. In many cases that was a pretty bad deal. The same thing has happened in many government plans (I will say the Feds were pretty good about how they changed things going forward with the FERS transition). But demanding that states honor already earned benefits is no more squandering our kid's futures than demanding that the government not cut benefits for current social security recipients.

I tell you what, when things get bad enough that the Federal Government cuts COLAs for existing (not future) SS recipients they can cut the COLA for my existing pension in the same manner. And we will all gripe about that to about the same degree.
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Old 06-28-2010, 06:56 PM   #115
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Nothing *can* happen by federal law -- nor should it -- for anything already earned. That's also true in the private sector pension plans.

Those are sunk costs and if it is painful for the taxpayer it has to be honored. The best we can do for our kids and grandkids is not throw more good money after bad. And the very first thing we should do for our kids and grandkids is to shut the door on these DB pension plans for most public sector new hires. If someone is drilling holes in a boat causing it to sink, it doesn't help much to patch the holes until you stop the guy drilling the holes. And every time we hire another public sector employee into a DB pension plan, we are drilling another hole. But sealing the holes won't keep the ship afloat until we can stop more holes from appearing.
I am going to go out on limb and a say we have to make modest cuts in existing benefits, eliminate certain COLA payments for existing retiree. In Hawaii and I believe Colorado pension increase 3% regardless of the actual CPI, so for instance Don said he'd forgo his COLA is SS beneficiaries, well this year SS didn't get a COLA, yet certain state local pensioners did.

Under normal circumstance I'd agree with Ziggy you can't go back on pass promises. However there are exceptions, now I am not a lawyer, and I realize we have real lawyers on the board some of whom know about bankruptcy law. So I'll be happy to be corrected.

In general you can break contracts as long as you pay the penalty for breaching the contract. More importantly bankruptcy allows courts to basically tear up contracts. My understanding is that case law regarding municipality (much less states) bankruptcy is quite small so we are in uncharted waters. An open question is do governments have a right to break contracts as long as they pay the penalty. In the case of military contracts we know the government cancels projects but the defense contractors gets compensated.

A state like CA is IMO for all intensive purposes bankrupt or at the very least in extremely tight box. They have constitutional amendments requiring a super majority to raise taxes and for the budget, constitutional amendments preventing increases in property taxes, more amendments saying how much they have to spend on schools and other various projects, and also a pension obligations. Clearly something has to give. No matter what happens in CA they are going to violate their state constitution. Not sure why pension benefits should have a higher claim on constitutional protection than any other claim.

It seems that a starting point state and local pensioners should share the fate of state and local workers. If they are getting furlough or 5 or 10% pay cuts they should get the same.When they get restored they get an increase. At minimum, I think starting immediately future increases for pensioner should be directly tied to the fiscal health of the pension if it if fully funded than benefits can be increased in not they remain frozen.

Finally, I urge folks with pension that allow early retirement to spend a few minutes thinking about the viability of these pension. If you start work in your mid 20s work for 30 years retire at 55 on average you'll live another 30 years.
If you simply put your money under your mattress, you'd need to save 1/2 your salary every year. Than after you retire start taking money out of your mattress and when you are 85 bounce the last check to buy a gun

Now obviously compound interest makes the situation better, but when I hear they raised our contribution from 5%-7%, I have to laugh and think of the scenes of the poor folks cleaning up the oil spill with paper towels.
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Old 06-28-2010, 07:10 PM   #116
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RE: Illinois not cutting future benefits of current employees
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In 1984 They raised the cost of our pensions to us by 40% for all existing employees.
I don't have data on all 50 states, but I'm guessing it is a pretty rare occurrence?

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Old 06-28-2010, 07:22 PM   #117
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RE: Illinois not cutting future benefits of current employees

I don't have data on all 50 states, but I'm guessing it is a pretty rare occurrence?

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No not really but in that specific case they were contributing 5% of their salary and increased 40% to a whooping 7%. I believe most of states increased employee contributions in the last 20 years. But in order to pay for 2@50 or 2.5%55, or 3@60 plan. You really need to have employees contribute 15% and matched by the employeers. Leonidas fund where the cops put in something like 12.5% is one of the few I've seen which are close.
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Old 06-28-2010, 08:24 PM   #118
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No not really but in that specific case they were contributing 5% of their salary and increased 40% to a whooping 7%. I believe most of states increased employee contributions in the last 20 years. But in order to pay for 2@50 or 2.5%55, or 3@60 plan. You really need to have employees contribute 15% and matched by the employeers. Leonidas fund where the cops put in something like 12.5% is one of the few I've seen which are close.
We have a 1.8 multiplier at 30 years service if you started before 1979. Much less for new hires.
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Old 06-28-2010, 08:32 PM   #119
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I don't have data on all 50 states, but I'm guessing it is a pretty rare occurrence?
From what I've seen, it's not *that* uncommon for employees to need to increase their contribution rates. That is seen as more politically palatable than cutting future benefits*.

* -- by "future benefits" I mean benefits for work not yet performed.
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Old 06-28-2010, 08:33 PM   #120
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In general you can break contracts as long as you pay the penalty for breaching the contract. More importantly bankruptcy allows courts to basically tear up contracts. My understanding is that case law regarding municipality (much less states) bankruptcy is quite small so we are in uncharted waters. An open question is do governments have a right to break contracts as long as they pay the penalty. In the case of military contracts we know the government cancels projects but the defense contractors gets compensated.
Maybe if you are at the local level. States can not declare bankruptcy.
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