ERD50
Give me a museum and I'll fill it. (Picasso) Give me a forum ...
double post on edit deleted
Why sympathise with the taxpayers? They chose to live there, they voted in the miscreants, and they are as much to blame for their ignorance of the true situation as the civil servants. At least the taxpayers can move and avoid the consequences (high taxes). The pensioners are toast.
The taxpayers fullfilled their promise when they put the money into the fund. If the fund was too generous with benefits, mismanaged their funds etc then it is what it is.
People seem to be under some dillusion that government pension funds are backed by the government entity that funded them in the first place having the ability to levy future taxes. This is not the case.
Anyone going into any job should do their due diligence and know what they're entering. Hopefully things work out well with the pension for your daughter but if she gets $.50 on the dollar for her pension at retirement, she can't claim she didn't know what she was getting into.
It is what it is.
The people I know who live near Central Falls (but go out of their way not to drive through it) are surprised only that it took this long for the town to self-destruct.
Why sympathise with the taxpayers? They chose to live there, they voted in the miscreants, and they are as much to blame for their ignorance of the true situation as the civil servants. At least the taxpayers can move and avoid the consequences (high taxes). The pensioners are toast.
And I do plan on educating her on this in the near future. She's heard my grumblings at the dinner table, so it won't be a total surprise.
-ERD50
Why sympathise with the taxpayers? They chose to live there, they voted in the miscreants, and they are as much to blame for their ignorance of the true situation as the civil servants. At least the taxpayers can move and avoid the consequences (high taxes). The pensioners are toast.
Actually, I do sympathize with the taxpayers. But I am not so ready to blame the workers as many seem to be. All those factors you mentioned apply to workers as well. Too many people seem content to throw them under the bus even though they don't even have PBGC backing of their pensions. We are all justifiably frustrated with our politicians but I believe blaming the civil servants for our woes is misdirected. By the way, my comments here are aimed at the general tenor of the debate not at you.maybe because the taxpayers were sold a lie....
Have you taken a look at the budget of your local anything Including retirement funds along with capital budgets etc. etc... Like city, county, school district, water district, fire district, hospital district etc. etc.... (we have maybe 20 that I pays taxes to).... thought not...
And by the way... the budget was not that out of whack according to the receiver... just that they put revenue in the budget that just did not happen for a few years and spent it....
So, how do employees who expect to receive a pension value it as part of their compensation?
My expected FERS pension is a big part of my total compensation. If they told me right now that it wouldn't be there, or be greatly reduced I would have to seriously consider looking for another job.
I think this is an excellent question.
IMO a pension is too generous; if it allows someone to work for 25 years and retire at any age and collect more than 50% of their salary, or 30 years and collect more than 2/3 of their pay, get a COLA, while contributing less than 10% of their pay. (An obvious exception to this rule of thumb is military).
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The thinking on firefighter and law enforcement retirement is that these jobs are robust enough that employees often can't work as long as they could in other careers. They also have mandatory retirement ages from covered positions for the same reason. So you are paying for both the added risk and the shorter career life span. Similarly, these jobs have maximum entry level ages (usually around 35) based on the same reasoning about the rigors of the job. Us 50+ers are just too decrepit.OK, I'm sitting here reading and thinking. What do people who are asked to do high risk jobs deserve? A living wage is a given but what level of safety-net is fair value for the added risk over another government job at the same salary but with little risk? Does the public need to pay a premium for job related hazards?
The thinking on firefighter and law enforcement retirement is that these jobs are robust enough that employees often can't work as long as they could in other careers. They also have mandatory retirement ages from covered positions for the same reason. So you are paying for both the added risk and the shorter career life span. Similarly, these jobs have maximum entry level ages (usually around 35) based on the same reasoning about the rigors of the job. Us 50+ers are just too decrepit.
If a company plan goes belly up employees get some relief through ERISA which, IIRC, is backed up by us the taxpayers. Public pensions are not covered probably because it was assumed they are already backed up by the taxpayers. As long as these public employees get benefits commensurate with ERISA that would seem fair. In most cases they do better but when it comes to small municipalities it would seem public employee pensions are at greater risk than private since the taxpayer base is not sufficient to provide backup.
PBGC receives no funds from general tax revenues. Operations are financed by insurance premiums set by Congress and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed by PBGC, and recoveries from the companies formerly responsible for the plans.
Sure you could but people are not things that you can move around as you see fit. The idea behind the retirement system is to help make a career in the field attractive -- same with the military retirement system. If your options under say age 62 are find another position yourself when you get booted out or we will stick you where we want you, the whole package becomes less attractive. This is not to say that sh** can't happen. Police and firefighters get riff'ed like anybody else and they have to make do like anybody else. But designing a system that by its nature ends with a lot of uncertainty is not ideal.Couldn't they be assigned to other jobs that aren't that strenuous? I would think their experience would be valuable in all sorts of assignments (building inspection, safety reviews, etc). Or offer training for those positions.
-ERD50
Thanks Chemist. I was under the impression there is a Federal guarantee. I guess the tax on companies must simply go up when a lot of pension funds crash. In any event, covered employees are insured up to the PBGC limits. Government employees are not covered so no guarantee other than the full faith and credit of their fellow tax payers.You don't recall correctly, PBGC is funded by premiums paid by the pension funds covered by it.
The idea behind the retirement system is to help make a career in the field attractive -- same with the military retirement system. If your options under say age 62 are find another position yourself when you get booted out or we will stick you where we want you, the whole package becomes less attractive.
Sure you could but people are not things that you can move around as you see fit.
Red herring. As I mentioned in my post, sh** happens. Companies get stressed and Government agency funds get cut, posts get closed. I ran many a Christmas RIF that put my fellow Feds on the street or sent them packing to new locations and new jobs (the impact of funding cuts are such that it is important to get people off the Government rolls in the first quarter, Oct - Dec). But that is far different than designing the system to end in such an action. The perception that many companies do think of their employees as things feeds the frustration and anger that your comment expresses. Not something you want to plan into the system.Tell that to the people in the private sector who were downsized, or moved to other positions or locations, or merged and eliminated as 'redundant''. (referring to my people are not things comment)
-ERD50
Yes, the budget bite is big for FERS. The agency pays its match to the TSP, the employer half for SS, and the bulk of the FERS pension component. It is good for managers to have to wrestle with the full costs and beneficial to taxpayers (or their watchdogs) who can more readily see those costs if they choose.The FERS system also has the TSP. So the federal manager is matching the SS payroll tax and contributing up to 5% of contributions to the employee TSP. I recall that when budgets were being prepared, FERS employees were a bigger bite on the budget than CSRS. However CSRS employees get the larger pension and, consequently, are the most expensive on the tail end of the budgets.