Pension haters

[Mulligan]

Would it? They are simply getting the benefit they qualified for based on their salary and years of service prior to retirement. True, a double-dipper and the employer are no longer putting in their contribution and match, but unless the double-dipper's benefit is being revised upward based on their post-retirement earnings or additional service time while not contributing to the retirement fund, I don't immediately see how this would starve the system. Isn't the retirement system sending the same check to Retiree Smith whether Smith returns to work for the same employer, gets a job elsewhere or doesn't work at all?

If a retiree's benefits are being revised upward based on earnings/service time while not contributing, then I agree—it's an obvious source of underfunding that needs to be eliminated, just as spiking and other abuses need to go.

Yes, you are correct Kyoung. I was thinking specifically with my system which is 85% funded so it could use the cash flow to invest in. And yes, despite all actuarial evidence contrary to my paranoid thinking.... I can't help but think there isn't a bit of a Ponzi scheme in these systems, so the more cash in the till, the less likely I will be the one caught holding the bag. Especially if the 50 something's working part time not contributing, were replaced with the 20 something's contributing who can't draw until I am possibly dead already!

 

[ripper1]

I don't know if the percentage is as low as 1%, but I'm confident it's lower than many people think. My guess is that the mistaken impression is due to "what sells more newspapers" (or gets more page views)—that stories about public retirees who receive moderate pensions don't generate nearly as much interest as stories about those few who get more in pension than they ever did in salary, so stories about the former either don't get published, or go largely unnoticed if they do.

I would bet the top 1% of middle class earners in the private sector do much better.

 

[ripper1]

I thought this thread got a rather hostile about public sector pensions. I had commented about my federal pension but after reading the previous 2-3 pages, decided to delete my post. It seemed to be a sore spot for some. I agree with the OP. Decided at that point to keep my mouth shut.


http://www.early-retirement.org/forums/f28/prefer-one-two-or-three-legs-69963.html

+1.......I believe a lot of people are envious.

 

[Fermion]

+1.......I believe a lot of people are envious.

Is envious really the right word though?

If you were dining in a restaurant and when you received your bill it had an extra 20% tacked on because the previous patron at your table ordered a steak and lobster feast but couldn't pay for it, would that make you envious?

Ticked off, maybe, irate, but envious?

 

[donheff]

Is envious really the right word though?

If you were dining in a restaurant and when you received your bill it had an extra 20% tacked on because the previous patron at your table ordered a steak and lobster feast but couldn't pay for it, would that make you envious?

Ticked off, maybe, irate, but envious?

Shouldn't blame the patron. A better analogy would be the owner comped the patron but then added a little to the other patrons' bills to make it up.

 

[FIREd]

+1.......I believe a lot of people are envious.

As they might be envious of people who inherited their money, or won the lottery, or made out like bandits with stock options.

 

[ERD50]

I thought this thread got a rather hostile about public sector pensions. I had commented about my federal pension but after reading the previous 2-3 pages, decided to delete my post. It seemed to be a sore spot for some. I agree with the OP. Decided at that point to keep my mouth shut.


http://www.early-retirement.org/forums/f28/prefer-one-two-or-three-legs-69963.html

I took some time to read that thread. Maybe I missed it, but 'hostile'? Really??

There was some back-and-forth over some misconceptions or inaccuracies, but I think they listened and got corrected in a relatively respectful manner.

Where did it get 'hostile'?

-ERD50

 

[ABQ2015]

I took some time to read that thread. Maybe I missed it, but 'hostile'? Really??

There was some back-and-forth over some misconceptions or inaccuracies, but I think they listened and got corrected in a relatively respectful manner.

Where did it get 'hostile'?

-ERD50

It you were trying to chime in around posting #50 or so, it felt quite hostile and posting #95 would limit pensions to military only. I don't understand why there is so much discussion on public sector salaries and benefits while I don't remember reading any discussions and concerns about Defense Contractor salaries and benefits. Anyone who has worked for Dept of Defense, Energy, and I am guessing NASA at least in the past, knows that this is where the gravy is. For my small federal agency, the FY14 budget for contractor pensions is twice the amount allotted to the fed's total operating budget including salaries and benefits.

I realize that contractor pensions are being frozen to some extent or are not open to new employees but there are a huge number of older government contractors getting ready to retire. When someone describes themselves as working for a megacorp on this forum and describes their generous salary and retirement benefits, I often wonder if they work for Lockheed, Raytheon, Northrop Grumman, etc.

 

[timo2]

It you were trying to chime in around posting #50 or so, it felt quite hostile and posting #95 would limit pensions to military only. I don't understand why there is so much discussion on public sector salaries and benefits while I don't remember reading any discussions and concerns about Defense Contractor salaries and benefits. Anyone who has worked for Dept of Defense, Energy, and I am guessing NASA at least in the past, knows that this is where the gravy is. For my small federal agency, the FY14 budget for contractor pensions is twice the amount allotted to the fed's total operating budget including salaries and benefits.

I realize that contractor pensions are being frozen to some extent or are not open to new employees but there are a huge number of older government contractors getting ready to retire. When someone describes themselves as working for a megacorp on this forum and describes their generous salary and retirement benefits, I often wonder if they work for Lockheed, Raytheon, Northrop Grumman, etc.

Except that for the purposes of this site, past salaries are all 'water over the bridge'. That is our old lives. Given whatever environment we had to deal with for earning a living, how can we have a successful retirement as soon as possible. That's what I thought we were doing here. So not only should the 'pension haters' get over it, but those of us who didn't get the huge megacorp salaries and benefits need to get over it also.

That said, to reference your point for others to understand about government workers, here is a chart showing federal employee salary raises

The Incredible Shrinking Pay Raise in One Chart - Pay & Benefits - GovExec.com

 

[F4mandolin]

Ex Govt employee here.....made $63k the last couple of years. Pension gives me $962 a month in my pocket (after tax/health). Less than 30 years in. I "wish" I had one of those cushy jobs that had big bucks involved....certainly was around a goodly few in my last years of work (civ contractors working on satellite surveillance in the UK)....the pay IS more than they should be getting......but I sure don't blame them for taking it. The Govt is just paying them too much. Don't know how to stop it though...

 

[Fermion]

http://www.cbo.gov/sites/default/files/cbofiles/attachments/01-30-FedPay.pdf

Seems to show there is better compensation for public sector jobs over private sector until you get to the PHD level.

 

[ERD50]

RE - 'hostility in the other thread...

It you were trying to chime in around posting #50 or so, it felt quite hostile and posting #95 would limit pensions to military only. ....

I guess 'hostility' is in the eye of the beholder? Those posts didn't strike me as 'hostile', not even close.

I didn't think that post #95 was saying to pull already earned pensions from everyone but military. In fact, the poster didn't even say 'limit pensions to military only', the poster said "I don't feel exactly the same for the person who works at the IRS or water dept. and takes little risk."

And I'm in agreement that defined benefit pensions (public and private) should be eliminated. As I said earlier, it is a promise made now by people who won't be on the hook to keep that promise in the future. Not prudent, not wise.

There's no hostility in that, it is meant to help everybody.

...
That said, to reference your point for others to understand about government workers, here is a chart showing federal employee salary raises

The Incredible Shrinking Pay Raise in One Chart - Pay & Benefits - GovExec.com

I'm not sure what to take from that chart w/o a comparison to private sector raises (if one can even be made relatively apples-to-apples). But off-hand, those numbers look pretty similar to what we were doing at MegaCorp. Well, other than we had a period of salary freezes and layoffs in the 80's, and the MegaCorp we did a lot of business with took an across the board 10% pay cut at that time to limit layoffs.

-ERD50

 

[Tadpole]

I'm not sure what to take from that chart w/o a comparison to private sector raises (if one can even be made relatively apples-to-apples). But off-hand, those numbers look pretty similar to what we were doing at MegaCorp. Well, other than we had a period of salary freezes and layoffs in the 80's, and the MegaCorp we did a lot of business with took an across the board 10% pay cut at that time to limit layoffs.

-ERD50

I'm not sure what you are asking for but the closest summary I know of is in Table 1 toward the end of this link:

http://assets.opencrs.com/rpts/94-971_20101207.pdf

It has numbers for [FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]
[FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]

Table 1. Annual Adjustments to Social Security Benefits, Federal Civilian Pensions, Federal Pay, Congressional Pay, National​

Average Wages, and Consumer Prices, 1969 to 2010

​

​

[/FONT]​

[/FONT]​

Social Security Benefits​

Civilian (CSRS) Retirement​

[/FONT]​

[/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]​

[/FONT][/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]

Federal Civil Service Pay Adjustments​

[/FONT]​

[/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]​

[/FONT][/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]

Congressional Pay Adjustments​

[/FONT]​

[/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]​

[/FONT][/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]

Average Annual Wages/Salaries​

[/FONT]​

[/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]​

[/FONT][/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]

Consumer Prices (CPI-W)​

[/FONT]​

[/FONT][FONT=GillSansMT,Bold][FONT=GillSansMT,Bold]​

[/FONT][/FONT]
These records were updated through 2010 and, since 2010, I haven't seen an update so this may be the last and most recent. The document itself tries to explain what the numbers are and aren't. (See also table footnotes.)

 

[keegs]

nasty posters ..or folks who make nasty comments?

....politics, ideology, human nature, economics, advances in technology, globalization...... all play a role in one's views of public employee pensions or the auto worker's pensions, steel worker's, coal miner's, aircraft mechanic's ....etc. etc.

I think we'd all wish everyone a secure retirement.

 

[travelover]

.........I think we'd all wish everyone a secure retirement.

No, just our political allies.

 

[beowulf]

This brings us back to the question of free choice. The only job that forced people to take it was the military when we had a draft. Now we don't and the military, federal civil service, state and local governments and the private sector are all on equal footing as far as our ability to choose who to work for. If your choice was poor, then it's no ones fault but your own and there should be no animosity towards those whose choice may have turned out better.

I stand by what I have said on previous threads - it's one thing to say that we should no longer have expensive defined benefit plans in the future (which is the way it pretty much is now) and quite another to say that people who earned their pensions after a full career should have them cut so the burden on them, as taxpayers, shouldn't increased. It's just as unfair as saying many of the people who work for government are just hanging on for the retirement or they are incapable of finding "real" jobs.

I'm sure you have all heard the old saying "Those who can, do. Those who can't teach." Do you really think that's true? And, yes, many teachers do have decent pensions. And many worked for wages that were far lower than what they could get in regular government jobs or industry. I find it particularly offensive when the drumbeat of "it's unfair, we should not have to pay for their pensions," keeps being brought up. During the 80's and 90's nearly all of my friends who worked for private companies chided me continuously for staying with the government, with relatively low pay compared to them, and with far fewer benefits. Of course, in the 2000's, many of them discovered that their portfolios had been devastated and their jobs were either shaky or gone. Now they wanted to know how they could get a government job. One friend went from a $250k a year job to a $125k a year GS-15 one and his complaint was that he was now working harder for a lot less money (he had been a VP type and was now a worker bee). Also, he was shocked by the fact that he actually had to pay for his own health insurance.

I don't think anyone on ER is being overtly nasty in what they are saying, but what some clearly want is a retroactive change to rules that awarded pensions they believe are unreasonable. And my opinion is that they are unreasonable in their opinions and envious of those who made different choices than them.

 

[ERD50]

bold mine...

This brings us back to the question of free choice.

...

I don't think anyone on ER is being overtly nasty in what they are saying, but what some clearly want is a retroactive change to rules that awarded pensions they believe are unreasonable. And my opinion is that they are unreasonable in their opinions and envious of those who made different choices than them.

I understand much of where you are coming from, but can you show me where posters here 'clearly' wanted the section I bolded? Sometimes I think people read their preconceived ideas into the posts (we all do from time to time).

What I have called for is some recognition that private pensions have some limited protections (non-COLA'd limits, set by the PBGC - you can go there for current details), and question why public pensions should be granted protections above and beyond those of the private sector (who will mostly be paying). After all, the private sector actually paid insurance premiums to the PBGC for that protection.

I can recall earlier discussions where, much like your post above, posters would say, 'hey, you coulda had a public pension, the jobs were out there, then you would have this X%/year COLA'd pension'. Yes, but when the tables are turned, I think they would consider it poor form (or say I'm 'nasty' or a 'hater') if I said 'hey, you coulda taken a job with an insured pension, then you wouldn't have so much worry about it being cut'.

The fact is, most municipal pensions are promises with no backing other than that promise. Even something like the Constitutional requirement in IL could be overturned by a Constitutional amendment. One could rightly say (though it would not be showing empathy, or sympathy, or basic human decency), 'hey, you took the job, so deal with it'.

But I'm still struggling with why public pensions should be held up to a higher standard than private pensions (PBGC limits), especially when the private pensioners paid into an insurance policy to help protect against these kinds of issues.

-ERD50

 

[ERD50]

While this may have been said in another thread, I have not seen it in this one. The fact that many state and local pensions were underfunded raises the question of funding then and funding now. By that I mean the government in question would have had to raise taxes in the past to adequately fund pensions due now. So taxpayers were not required to pay these taxes when they should have. ... the taxes that should have been paid by the public for services received in the past are simply coming due now as public servants retire. ...

I've addressed this before in earlier threads. I cannot accept what you say. Let's turn the tables:

Imagine that 10 years ago, you bought a large screen TV. You priced it out, and went for the best deal you could find for the features/quality you wanted. Fast forward to today, the company that made your TV is struggling, and they show up on your doorstep and tell you that you got a deal back then, because they were not investing in R&D and infrastructure for the future. So they now demand an extra $1,000 today, for the TV you bought 10 years ago. I'm certain you would tell them something 'nasty'. Had you known of the extra $1,000, it would have been factored into your purchase decision at the time. The company can't come back later and cry 'foul'.

This is why I'm against pensions and future promises. The decision makers push the payments onto people who might not even be of voting age now. Keep it in real time, and let today's voters vote on today's expenditures.

...I can say that the recent attempted cut to retirement benefits was frustrating from the standpoint that there is so much other wasteful government spending going on ...

So while I may not be a "public pensioner" yet, I do believe that my benefits should be sacred as I entered into a commitment under certain expectations. That said, I do NOT expect YOU to pay for it necessarily. I expect the government to be good stewards of the money they already have, rather than simply seeking out more from the taxpayer.

And they're not. Plenty of things to fix before raising taxes becomes the correct answer.

I understand, but what do you think the UAL pilots who had their pensions cut would say? I bet they would tell you that management screwed up, the pilots did their job, so why should pilots pay the price?

And if we parse this and apply some logic, the waste is a separate issue from paying pensions. Everyone wants to see waste cut. And if waste was cut (all other things being equal), taxes could be cut. So if you now say 'I want to apply the waste savings to pensions', you are still taking away that money that would have gone back to the taxpayers.

And I'm not saying that to try to justify any changes in the Military pensions, I don't even know the details, and if I did I might feel the cuts were improper. I'm just saying that your logic doesn't necessarily follow.


-ERD50

 

[youbet]

there are nasty folks that have to weigh in.

Why yes, yes there are...........

 

[M Paquette]

This is why I'm against pensions and future promises. The decision makers push the payments onto people who might not even be of voting age now.

You must really love Single Payment Immediate Annuites and Long Term Care Insurance, which are built on very similar actuarial models to pension plans.

Here's the thing. Most of us live in what is called a 'society', a large social grouping sharing the same geographical or cultural territory, usually with a shared government, and a dominant set of cultural expectations. As a human society, we can enable the members of the society to benefit in ways that would not be possible on an individual basis. The sharing of risk and reward via actuarial means is one such mechanism.

When we as a society, through our shared institutions agree to provide such a benefit from an actuarial pool, we trust that these shared institutions will properly manage such a benefit as has been agreed to be provided. When such institutions fail to properly manage such benefits, failing to perform their actuarial duty, it is not the fault of the intended recipients of the benefit, but rather, first, the fault of the shared institutions that we as a society have appointed to manage these benefits, and second, the fault of society for failing to properly oversee, note, and correct such problems.

In the case of a regional public entity failing to properly allocate reserves for it's pension, the fault lies first with the public entity, and second with the fault of the public for failing to demand visibility and accountability of said entity. If the public decides to ignore any possible issue and blindly accepts the word of those operating the public entity, then they set themselves up to be taken advantage of by any criminal subculture that becomes established in the public entity.



“The price of freedom is eternal vigilance.”




― John Philpot Curran