Squeezy the Pension Python

[clifp]

I thought this was a joke, but those rocket scientists in Illinois government came up with a mascot to explain the pension problem "Squeezy the Pension Python" (about 2:30 in the video). The video isn't awful but a cute python isn't the solution to the pension problem.

Can I say that I am disappointed that none of you IL folks posted this (or I maybe I missed it.)

The Pension Squeeze - YouTube

 

[Jack_Pine]

Oh, it's for the children............................

I live in the peoples republic of IL and I missed that. We have no money in this state.

I work with a guy...his wife is a retired teacher from Chicago. Her pension is 98,500/year.

 

[pb4uski]

....I work with a guy...his wife is a retired teacher from Chicago. Her pension is 98,500/year.

That made my eyes open wide. Wow.

 

[cj]

Oh, it's for the children............................
I work with a guy...his wife is a retired teacher from Chicago. Her pension is 98,500/year.

I know all teachers don't get such a deal, but I do have a hard time hearing about how teachers have it so tough. Please don't throw stones, I DID say that I know not all teachers get such a great deal. But a lot of them do.

 

[Jack_Pine]

My sister and two nieces are teachers. I respect the work they do. My sister is retired and her package is no where near what the one from Chicago is getting. The 98.5 just seems a little high to me. I know they don't get SS but that would be a great base to build retirement on...........

 

[travelover]

I know all teachers don't get such a deal, but I do have a hard time hearing about how teachers have it so tough. Please don't throw stones, I DID say that I know not all teachers get such a great deal. But a lot of them do.

I think that it is a mistake to make a judgement on whether someone else "deserves" their pension. It is pretty hard to know how hard someone else's job was or how hard they worked. The fact is that an agreement was made, the work was delivered as promised over many years and there is an expectation that the agreement will be honored. The fact that the pension was not adequately funded falls on the governing body that refused to fund it properly and the voters who allowed them to get away with it.

 

[Chuckanut]

Oh, it's for the children............................ I live in the peoples republic of IL and I missed that. We have no money in this state. I work with a guy...his wife is a retired teacher from Chicago. Her pension is 98,500/year.

Obviously I taught in the wrong state. My apologies to this group for bringing its financial IQ down.

 

[Fermion]

As long as the money is in the pension fund to pay these pensions I don't care if they get $1,000,000 a year.

It is when they start to take from other sources like current taxpayers that I have a problem. The time to complain about pension funding was years ago when it was not being funded.

 

[imoldernu]

What a mixed bag of "facts" to deal with... Especially for Illinois.
One set of "facts" here:
http://www.ctpf.org/current_news/MYTHBUSTERS.pdf

High end...
After 28 years of teaching, average pension $42K, no SS.
Years of lower pay sacrificed with pension promises.
Those who are retiring now, started career at lower than average pay scale for similar education.
Average weekly work hours 55.

Low end... School year 170 days, 6 Instruction hours/day.

And the "pension problem" is not only teachers, but municipal workers... Police, Firemen, Maintainence, Government etc...

The big question is the same as for Detroit, and thousands of municipalities throughout the country.... "What happens when the well runs dry and no one will provide bottled water."

My guess is this will devolve, and become too political...
I feel quite badly for some very good friends, who have built their life and future, on these pension expectations, and who are now very worried.

 

[Fermion]

What a mixed bag of "facts" to deal with... Especially for Illinois.
One set of "facts" here:
http://www.ctpf.org/current_news/MYTHBUSTERS.pdf

High end...
After 28 years of teaching, average pension $42K, no SS.

It actually says 42% earn less than $42K per year, which means 58% earn more than $42K per year. It also doesn't really say if the people earning less than $42K per year have a full 25 or 30 years of service.

 

[MasterBlaster]

I work with a guy...his wife is a retired teacher from Chicago. Her pension is 98,500/year.

Some people think that government employees work for the public.

The reality is the reverse of that.

 

[clifp]

I recently meet an Orange County teacher who just retired I think he was 61.
He had been teaching for 38 year (right out of college) and in the same school for 33 years.

He didn't actually want to retire, but after meeting with the retirement specialist he realized that he was taking home > $500/month less in take home pay by teaching than he would get by retiring. After he calculated pension contributions, furlough days, and payroll tax. I am not sure but I am guessing he had capped out the max pension benefit. I am pretty sure he was making over 100k and I'm guessing his pension was probably close to 75-90K.

Anyway it is a perverse system where a teacher (and I am sure he is good he was an English teacher) who loves teach has to retire at 60 or a take a big pay cut.

 

[Sittingduck]

Can I say that I am disappointed that none of you IL folks posted this (or I maybe I missed it.)


We attempt to ignore our shame. Wish squeezy would embrace our governor. The current one - not the one in prison. Well - him too.

The problem was not created by the average joe earning a pension. It was created by pols promising the world in exchange for votes and then never appropriating the funds and an electorate that allowed them to get away with it for decades.

 

[Bestwifeever]

?... Wish squeezy would embrace our governor. The current one....

Not likely--the current governor's office created the video.

 

[clifp]

Can I say that I am disappointed that none of you IL folks posted this (or I maybe I missed it.)


We attempt to ignore our shame. Wish squeezy would embrace our governor. The current one - not the one in prison. Well - him too.

The problem was not created by the average joe earning a pension. It was created by pols promising the world in exchange for votes and then never appropriating the funds and an electorate that allowed them to get away with it for decades.

LOL. I am wondering to they have a special wing in the Il prison system for governor and other elected official. Still at least your guys are reasonably clever in ripping off the public and go for the big bucks, in Hawaii our guys are just stupid and try penny ante like taking the family out to dinner on their expense accounts. If you are going to steal make it big, I say.

Yes I generally agree that it isn't the average Joes fault, although the lack of adequate contribution by most Illinois public employees until recently is something I do blame on the individual employees and their unions. I firmly believe that everybody should contribute to their retirement, if for no other reason if you are contributed your own money to a retirement fund, you have vested interested in paying attention to how it is managed.

 

[MichaelB]

Let's try to stay on topic.

 

[Cut-Throat]

I didn't think Political Conversations were allowed in this forum. This entire thread is about as Political as it gets.

 

[MichaelB]

I didn't think Political Conversations were allowed in this forum. This entire thread is about as Political as it gets.

Sounds like a conversation on pensions in the public sector. Still, a request was made to stay on topic, and for the most part it is. Lots of members here have public pensions, some from Illinois. This is an important discussion for them

 

[Cut-Throat]

OK, people will probably find this article informative.

Set the record straight on teachers pension fund problems | catalyst-chicago.org

 

[ERhoosier]

This issue is not unique to Illinois, nor to gov't workers. Whether promised retirement packages were excessive or not, reality is there is often no $$$ to fund these retirements for all who are/soon will be eligible. IMHO- This is a big reason that retiring folks given option of lump sum vs gov't/company pension should consider the lump sum if it is at all reasonable from actuarial & financial standpoint. The lump sum is (usu) all yours while the pension depends on the employer's ongoing ability/willingness to continue paying. A bird in the hand is worth 2 in the bush, and Squeezy the Python may be hiding amongst the branches

 

[Chuckanut]

OK, people will probably find this article informative.

Set the record straight on teachers pension fund problems | catalyst-chicago.org

I don't know that I agree with everything in the article but he is correct in one thing: Pensions were not the sole cause of the financial problem and shouldn't be treated as though they are.

I can't imagine that dishonest and foolish politicians were only dishonest and foolish when it came to public pensions, and otherwise were honest, frugal and exemplary public servants.

Oh, please keep Squeezy out of my state. He is an invasive non-native animal and not welcome.

 

[Fermion]

Have there actually been any cases to date though where a public pension was cut or eliminated? I mean a single case where someone was getting $40,000 per year or whatever and the government said we don't have enough money and are only paying you $20,000?

I haven't heard of one case, which makes me suspect the wisdom in taking lump sum.

Now the private sector is another story. Ford can't make someone driving a 2005 F150 pay another $1000 so it can fund promised pensions where a city can enact a levy or raise some taxes.

 

[Walt34]

Have there actually been any cases to date though where a public pension was cut or eliminated? I mean a single case where someone was getting $40,000 per year or whatever and the government said we don't have enough money and are only paying you $20,000?

Yes, Google "public pensions reducing benefits".

 

[clifp]

OK, people will probably find this article informative.

Set the record straight on teachers pension fund problems | catalyst-chicago.org

A good article even if there is fair amount of CYA.

But I still disagree that pensions aren't generous by comparison to private sector.

From I can tell prior to the 2011 pension change a Chicago teacher could retire at 55 (more realistically 56 if they started right out of college.) after 34 years and retire. They will be eligible for 75% of the 4 highest years pay.

Now according to this article in Slate the mean teacher salary in Chicago is $74,236, but of course somebody with 34 years is going to make well over the average. I'd guess it is 100K, but lets say it is only 90K. So the pension will be 75% of 90K or $5625 a month. An annuity for 56 year old female in IL will cost ~$1,167,000. But that is for a fixed annuity CPS teacher pension increase by 3% a year. I am not sure what the factor for a 3% pension increase should be over nearly 30 years. Life expectancy for a 56 year female is 28 years. I'll make a wild ass guess that $1.7-2 million would get you an annuity paying $5625 and increasing 3% a year.

Now a teacher starting off at 30K and after 30 years topping out at $90k salary and contribution 9% of their salary and earning 8% a year (per the historical CPS returns) will have saved $700K after 34 years. The shortfall $1.1 million to 1.3 million is the amount the state would have to match of the teacher pension. This implies a contribution of 14% to 16%. Now if we compare this to typical 401K match of 3-6% in the private sector, it is easy to reach the conclusion the pension are generous. My rule of thumb is that public service pension are equivalent to 10% salary increase.

Now this doesn't excuse the borderline criminal behavior the elected official in not contributing to the pension fund, but I think if the public knew how expensive pensions really were perhaps thinks may have been different.

 

[clifp]

Have there actually been any cases to date though where a public pension was cut or eliminated? I mean a single case where someone was getting $40,000 per year or whatever and the government said we don't have enough money and are only paying you $20,000?

I haven't heard of one case, which makes me suspect the wisdom in taking lump sum.

Now the private sector is another story. Ford can't make someone driving a 2005 F150 pay another $1000 so it can fund promised pensions where a city can enact a levy or raise some taxes.

Public employees in Cedar Falls Rhode Island took a big hair cut in their pension when the town went bankrupt as much as 75% for the top guys fire chief etc but even folks with modest 24K a year pension were cut almost in 1/2.

I'd be shocked if public employees in Detroit don't see a significant reduction in benefits. I also remember some states (Ohio) freezing cost of living pension increase during the crisis.