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Old 06-29-2010, 01:30 AM   #121
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Maybe if you are at the local level. States can not declare bankruptcy.
I guess that remains to be seen. I really don't understand how California is going to pay all the people it owes money to. I am sure all of the assets that CALPERs has are available to pay retirees. Moreover California is presumably on the hook for promised payments (i.e. the employer contribution) to the pension fund which they have promised but didn't make over the last decade. However, are they really on the hook to the pension plan because the investment returns of CALPERs have only been a few percent and not the projected 8-8.5% over the last decade.

Does the pension plan have a higher claim on few payments than general obligation bond holders? I doubt anybody really knows the answer I certainly don't.
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Old 06-29-2010, 07:26 AM   #122
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I really don't understand how California is going to pay all the people it owes money to.
Since the state cannot declare bankruptcy, the federal government can put the state into receivership.
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Old 06-29-2010, 08:18 AM   #123
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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)?
To be quite honest, my pension in the private sector. I don't see my private sector defined benefit going out the door for at least another 10 years (we have a huge demographic gap and the experience is needed from the "more wise" workers). if i can make it another 10 years with a DB plan at my megacorp, my annuity will be worth ~$1000/month if i collect the next month from my "retirement" date.

if the pension were to leave tomorrow, i would probably walk out the door with all the old guys and get a job as a teacher here in texas (also would keep me from complaining about my property taxes as much). pay is good and so is the time off, not to mention "sick" days. my hope would be to get vested in TRS.

TRS or not, teaching is one of my early-retirement plans once i get the nest egg and pension built up here at megacorp (hopefully in my late 30's/early 40's).
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Old 06-29-2010, 08:28 AM   #124
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So, its ok to screw the new hires, just don't mess with those with "seniority", or retirees, even if the promise is unsustainable?
This is just the way it starts. It is more like the death of a thousand cuts. Eventually, vested stakeholders will be forced to take cuts, pay more or see future benefit growth curtailed. Creating different pay structure for the same work is the first step.
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Old 06-29-2010, 08:34 AM   #125
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I started work 31 years ago with a small company.
I knew at that time there was no defined benefit program for retirement.
Only that when the company made a profit, a percentage was put into an ESOP.
Matching contributions to a 401K plan did not happen until about ten years ago.

I knew at the beginning that the majority of my retirement savings would have to come from my own savings and investments.
Even so, I did not start seriously start saving until 1987.
Now retired with a comfortable nest egg, including about one mill in the ESOP.
Yes, the company has done well, but has not made a profit every year.

With todays economic climate, it would make sense for federal, state and local governments to eliminate the defined retirement benefit for new hires.
People still need jobs and will make the choice of no job or one where they have to save for their own retirement like the majority of the company.

I have known many government employees over the years.
Not one has been overworked or put under near the stress that employees such as my self have been submitted working in an industry that is monitored 100% of the time by numerous federal employees on site who can artibtrarily shut down the lines and make life miserable for no justifiable reason.
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Old 06-29-2010, 09:06 AM   #126
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I'll jump in medias res to address some points made in this thread, using my perspective as a state employee.

1.) The median for salaries for IT personnel in the state of Texas are 50k-60k. Rarely do we get employers with 6 figures or even close to it. Those are very high level, and would be CIO's or Chief architects in private companies. Remember that Texas is a large state with well over a hundred thousand employees, servicing a population of ~25 million. At Dell, for example, where I used to work, just about all middle to senior software developers made close to or above six figures.

The site I linked to does not distinguish between levels or employees. So a programmer could easily be just a desk clerk, or the Security Lead for the entire department.

I can't speak for Psychiatrist or the finance guys salaries, which is admittedly jaw-dropping, but I assume there must be a market for them out there.

2.) Not sure how moving all new employees to 401k plans would work. The retirement system here in Texas, and I'm sure in other states, depends on current employees contributions to stay afloat. Private companies can write it off, but the state would have to sell the wirte off to the tax payers. Tax payers, I think, would simply prefer that they up government employee contributions (as they just did this past January) in any crises.

3.) Double dipping is a big problem where I work, imo. Not only is a person essentially drawing double salary for doing the same work as another, but due to some arcane federal regulation double-dippers are not allowed to contribute to the pension fund. Its a nice gig and every retiree here seemed to be angling for it. The result is that there is less money going to the pension fund because those jobs are tied up by the retiree and less jobs are available for younger, more energetic personnel.

However, the legislature seems to have wised up and is now forcing the department that hires a double-dipper to pay the contribution out of the departments budget. So a double-dipper better be worth it to the department to be rehired, instead of just being buddies with the hiring manager.
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Old 06-29-2010, 09:11 AM   #127
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However, the legislature seems to have wised up and is now forcing the department that hires a double-dipper to pay the contribution out of the departments budget. So a double-dipper better be worth it to the department to be rehired, instead of just being buddies with the hiring manager.
Frankly, I'd like to see the practice of double-dipping in the public sector either eliminated or tightly restricted, particularly when the retiree is eligible for a pension and health insurance in "retirement". I say this not *only* from the angle of being a concerned taxpayer, but in this era of 15%+ "real" unemployment if you can afford to retire and start collecting retirement benefits, you can afford to let someone else who *needs* the job have it.
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Old 06-29-2010, 09:13 AM   #128
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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
So, this article is a fake?

College tuition is far outpacing the cost of living - Aug. 20, 2008
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Old 06-29-2010, 09:18 AM   #129
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Frankly, I'd like to see the practice of double-dipping in the public sector either eliminated or tightly restricted, particularly when the retiree is eligible for a pension and health insurance in "retirement". I say this not *only* from the angle of being a concerned taxpayer, but in this era of 15%+ "real" unemployment if you can afford to retire and start collecting retirement benefits, you can afford to let someone else who *needs* the job have it.
I agree. my BIL's FIL is a police chief in Utah. he retired on a friday, didn't even clean out his desk, and showed up monday collecting his pension and a salary. and here i thought working in the public sector wasn't about the money, it was about the service...
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Old 06-29-2010, 09:24 AM   #130
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"Dwindling support for higher education from cash-strapped federal and state governments doesn't help the situation."
is one of the major factor I mentioned for state universities
otherwise the article is largely about private universities
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Old 06-29-2010, 09:32 AM   #131
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"Dwindling support for higher education from cash-strapped federal and state governments doesn't help the situation."
is one of the major factor I mentioned for state universities
otherwise the article is largely about private universities
"Doesn't help" is not positioned as a major factor......... I get it, the taxpayers abandoned public universities, so like all your analogies, it's the taxpayer's fault they don't support education.....not like I haven't heard that one before.........
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Old 06-29-2010, 09:36 AM   #132
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We have a 1.8 multiplier at 30 years service if you started before 1979. Much less for new hires.

That sounds a lot more reasonable compared to others I hear about... does it have a COLA when you start getting benefits If so, then maybe it is on the edge or just over.

The other is that no matter what percent... having it based on the last 3 years (or even the highest paycheck I saw for the police chief)... then there is an ability to game the system...

I would much rather see a cash balance account... you put in your money... the state matches... it is invested in treasuries (safe)... and at the end you have a pile of money to buy an annuity.... simple... no unknown liability, no gaming the system.. no let me start getting my pension and then get hired back (well, you could, but it really doesn't matter as you start your pension early you get less...)
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Old 06-29-2010, 09:39 AM   #133
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"Dwindling support for higher education from cash-strapped federal and state governments doesn't help the situation."
is one of the major factor I mentioned for state universities
otherwise the article is largely about private universities
This graph shows college costs up 439% since 1982, while the CPI is up 108%. Now I think the CPI is largely farcical and hides much of the real inflation most people feel, but still -- if college costs matched the CPI, we should be paying $2.08 in tuition today for every dollar spent in 1982, not $5.39. There's no way that public funding has dropped *that* much or even close to it. You'd have to believe that real public financial support has dropped by about 60% to account for that.

I see two main factors in the difference: one is the huge increase in labor and retirement costs. The other is an increase in demand as everyone buys what is increasingly the Big Lie about the need to go to college. People are willing to eat dog food in order to make sure their kids get into college today, despite the fact that we are developing a glut of college graduates who are finding that a degree no longer means a good, high-paying job as a given -- and that it increasingly means unemployment and $100,000 in student loans. Education past the K-12 level has become an "arms race."
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Old 06-29-2010, 09:40 AM   #134
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3.) Double dipping is a big problem where I work, imo. Not only is a person essentially drawing double salary for doing the same work as another, but due to some arcane federal regulation double-dippers are not allowed to contribute to the pension fund.r.
Our State plan put q strict limit on double dippers. They can pay you up to a total of your pension and salary equal to your high 3 but no more (there are special rules for certain teachers)

So as an Emeritus faculty member I work "part time" teaching the courses they need.
But they cant hire me for a "full time" job without me giving up the pension and going back into the system. And the system is statewide so moving to another school has no effect.
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Old 06-29-2010, 09:55 AM   #135
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Originally Posted by GoRed View Post
I'll jump in medias res to address some points made in this thread, using my perspective as a state employee.

1.) The median for salaries for IT personnel in the state of Texas are 50k-60k. Rarely do we get employers with 6 figures or even close to it. Those are very high level, and would be CIO's or Chief architects in private companies. Remember that Texas is a large state with well over a hundred thousand employees, servicing a population of ~25 million. At Dell, for example, where I used to work, just about all middle to senior software developers made close to or above six figures.

The site I linked to does not distinguish between levels or employees. So a programmer could easily be just a desk clerk, or the Security Lead for the entire department.

I can't speak for Psychiatrist or the finance guys salaries, which is admittedly jaw-dropping, but I assume there must be a market for them out there.

2.) Not sure how moving all new employees to 401k plans would work. The retirement system here in Texas, and I'm sure in other states, depends on current employees contributions to stay afloat. Private companies can write it off, but the state would have to sell the wirte off to the tax payers. Tax payers, I think, would simply prefer that they up government employee contributions (as they just did this past January) in any crises.

3.) Double dipping is a big problem where I work, imo. Not only is a person essentially drawing double salary for doing the same work as another, but due to some arcane federal regulation double-dippers are not allowed to contribute to the pension fund. Its a nice gig and every retiree here seemed to be angling for it. The result is that there is less money going to the pension fund because those jobs are tied up by the retiree and less jobs are available for younger, more energetic personnel.

However, the legislature seems to have wised up and is now forcing the department that hires a double-dipper to pay the contribution out of the departments budget. So a double-dipper better be worth it to the department to be rehired, instead of just being buddies with the hiring manager.

A few things that are not quite right....

The retirement system is NOT like the SS system where we 'need' the payment of current employees to pay off retirement benefits.... it is considered 'funded'... so they COULD stop all benefits going forward and there would not be a major problem... I do not know how underfunded it is right now... but I remember it being 10 billion a few years ago...


It does not matter that the employee does not pay into the system when they start to double dip.... because their benefits are not going to go up... they are now working at a salary that does not include retirement benefits... which goes to show that some people WILL work without these benefits...
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Old 06-29-2010, 09:55 AM   #136
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This graph shows college costs up 439% since 1982, while the CPI is up 108%. Now I think the CPI is largely farcical and hides much of the real inflation most people feel, but still -- if college costs matched the CPI, we should be paying $2.08 in tuition today for every dollar spent in 1982, not $5.39. There's no way that public funding has dropped *that* much or even close to it. You'd have to believe that real public financial support has dropped by about 60% to account for that.

I see two main factors in the difference: one is the huge increase in labor and retirement costs. The other is an increase in demand as everyone buys what is increasingly the Big Lie about the need to go to college. People are willing to eat dog food in order to make sure their kids get into college today, despite the fact that we are developing a glut of college graduates who are finding that a degree no longer means a good, high-paying job as a given -- and that it increasingly means unemployment and $100,000 in student loans. Education past the K-12 level has become an "arms race."
Real public funding of universities has dropped enormously.
for one source
  • From fiscal years 2002 to 2007, the Texas state budget was cut in terms of real dollar, per-student funding for universities by 19.92%; for community colleges the per-student cut was 35.29%.
Texas Where We Stand: Education
And that was just for those 5 years. I can only speak for my department but in 1990 State funding was 80 percent of our budget and last year it was 25% I also wrote that people increasingly want to study at a research university. Research universities compete on a wordwide basis for academic talent.

Everyone keeps complaining about government employees. Those complaints are meaningless in the context of faculty at major universities Universities are a highly competitive internationally focused academic business. We dominate the world. We set high standards and demand a great deal from our workforce. If you think you can run a world class university on the cheap there are lots of places to try.
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Old 06-29-2010, 09:58 AM   #137
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That sounds a lot more reasonable compared to others I hear about... does it have a COLA when you start getting benefits If so, then maybe it is on the edge or just over.

The other is that no matter what percent... having it based on the last 3 years (or even the highest paycheck I saw for the police chief)... then there is an ability to game the system...

I would much rather see a cash balance account... you put in your money... the state matches... it is invested in treasuries (safe)... and at the end you have a pile of money to buy an annuity.... simple... no unknown liability, no gaming the system.. no let me start getting my pension and then get hired back (well, you could, but it really doesn't matter as you start your pension early you get less...)
Based on base salary, no overtime, high three
Faculty have the choice of a 403b system operated by TIAA-CREF that provides exactly the benefit you describe.
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Old 06-29-2010, 10:00 AM   #138
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"Doesn't help" is not positioned as a major factor......... I get it, the taxpayers abandoned public universities, so like all your analogies, it's the taxpayer's fault they don't support education.....not like I haven't heard that one before.........
Not a question of fault, its a question of public policy. If the return on a degree is high the cost should be paid by the student.
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Old 06-29-2010, 10:02 AM   #139
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Not a question of fault, its a question of public policy. If the return on a degree is high the cost should be paid by the student.
So are we saying that philosophy degrees should be almost entirely taxpayer-subsidized while degrees in science, engineering, business and pre-professional studies should have no subsidy at all (and perhaps charged more than cost in order to subsidize history majors)?

[Edit to add: If some majors are charged more because of the need to pay higher salaries to compete with private industry in that field, that's one thing and I can see that. But I don't think taxpayer subsidies should vary.]
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Old 06-29-2010, 10:07 AM   #140
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Not a question of fault, its a question of public policy. If the return on a degree is high the cost should be paid by the student.
The system is set up that way already..........

So, the pre-med undegrad student should pay more than the philosophy undergrad for their tuition? Good luck with that one!
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