Wow! Wild! OOfah

[dumpster56]

Today in Trenton NJ state senate hearings
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Lawmakers told public pension benefits protected by law
Pension benefits for public employees who have been on the job five years or longer cannot be reduced without violating the constitution, a lawyer in the non-partisan Office of Legislative Services told lawmakers today.

“Benefits are protected for employees with five years or more of service and also retired employees,” OLS attorney Peter Kelly told a legislative committee exploring ways of cutting property taxes by reforming pension and health benefits.

Kelly said a law passed in 1997 gave public employees with five years of service “a non-forfeitable right” to their pensions that can be lost only by dishonorable service.

That law created a contractual obligation on the part of the state that is protect by both the state and federal constitutions, Kelly said. He explained that even if the current legislature repealed the 1997 law, that “would not extinguish the rights” of public employees, who “have expectations protected by the law of contracts.”

The legal opinion by the Legislature’s research arm was welcomed by public employee union leaders.

Robert Pursell, area director of the Communications Workers of America, called Kelly’s opinion “a pleasant surprise” and “a reaffirmation of our faith in the independence of OLS.” While the opinion confirmed the CWA’s long-held position, Pursell said, “You always have to worry about how existing laws are going to be interpreted.”

Carla Katz, president of CWA Local 1034, said, “We’re not the cause of the property tax problem and they’re not going to be able to solve it on the backs of public employees. This hearing today went a long way to making that even more clear.”


I am still glad I made my decision to pack it in Jan 1. SWEET!

 

[2B]

Public pensions (Federal, state and municipal) will be the next big retirement scandal. Government at all levels have been very free with retirement plans to buy labor peace and electoral loyalty. Many of these plans will eventually crush the governments that set them up. This is particularly true in the Northeast where strong, aggressive unions have been the most successful.

When retiring, the future retirement benefits of the local workers should be considered. They will ultimately drive local taxes and available services. The private sector has a way to eventually get out of unsustainable pensions (bankruptcy) but governments don't.

 

[dumpster56]

Public pensions (Federal, state and municipal) will be the next big retirement scandal. Government at all levels have been very free with retirement plans to buy labor peace and electoral loyalty. Many of these plans will eventually crush the governments that set them up. This is particularly true in the Northeast where strong, aggressive unions have been the most successful.

When retiring, the future retirement benefits of the local workers should be considered. They will ultimately drive local taxes and available services. The private sector has a way to eventually get out of unsustainable pensions (bankruptcy) but governments don't.

Interesting points however the average pension for a public worker in NJ is only 18,000K a year.

My pension is only 33K a year sure there is a COLA but its set at 60%. Nothing that large. Seems to me that the pension system in NJ was full until a gov named Whitman did not make payments to the fund and surpize it becomes underfunded.

I never had that choice I ALWAYS HAD TO PAY MY 5% a year into the system with no options, I HAD TO JOIN!

So screw em they the government must pay.

If they want to change the rules FINE the new people must have the rules changed for them, we played by the rules for almost 30 years.

 

[2B]

So screw em they the government must pay.

If they want to change the rules FINE the new people must have the rules changed for them, we played by the rules for almost 30 years.

My intention was not to stir anyone up but it looks like I did.  Please take the comments as a reflection on the condition.  You say your COLA'd pension is only $33K but that overwhelms the pensions of the vast majority of the people expected to pay the taxes to fund your pension.  Even the $18K average would look pretty good to most of them.

There is no government without the taxpayers -- the taxpayers will pay.  At a certain point the taxpaying public and businesses will vote with their feet.  Does the population shift from the NE to the west and south have anything to do with taxes and cost of living? 

The people at Delta and GM have played by the rules too.  We know one group won't get what they were "promised."  I suspect it's only a matter of time until the other group gets the green weenie.

The purpose of my original post was to say that future retirement cost of living will include the taxes required to pay for their retirees.  Despite your feelings of your pension's insignificance, these government pensions are a growing cost on their "balance sheets."  It will grow as a political issue.

 

[astromeria]

It would be pretty crass of NJ taxpayers to cut newguy's pension after the taxpayers benefited by his years of work. Even those taxpayers who didn't have children in the public schools benefited by the education received by other peoples' kids. Attitudes like these make me nervous about my son--he ahs to put 11% of his paycheck into his teacher's pension and it's matched by only 2 or 3% from his school district. It would be even worse to deny him the equivalent of his own 401k in the future!

On the other hand, I feel a tad bit resentful about being taxed to shore up pensions of corporate workers. I have no pension--my company gave us stock options instead. Nobody's making up for my losses when our stock price plummeted and I lost over half my retirement. The corporate workers should seek redress from their grossly overpaid executives.

 

[Gumby]

Much of the problem is a failure to properly fund the pensions NOW. Actuaries can figure out pretty accurately how much needs to be funded into the system to cover future benefits. Yet, year after year, state government fails to make the required contributions. The taxpayers of TODAY are not paying enough to fully fund public employee pensions, and they are just pushing the problem off to their children.

In Connecticut, teachers are not covered by social security. They pay 7% of their pay into the state teachers retirement system. If the state retirement system breaks down because it has been chronically underfunded, they will have no other source of retirement income (unless they have been heeding the advice on this board). Many of the people teaching our children could have and would have obtained a higher paying position in private industry. Part of what kept them in the schools was the promise of a pension.

It seems to me that if future taxpayers have a problem paying teacher pensions, they can and should blame their own parents, not the retirees.

 

[AFloat]

I think it is criminal that a mega-corp can declare bankruptcy and walk away from their pension obligations so the mega-corp can return to “profitability” after years of bad management. The executives and banks will make billions while pensioners lose and the tax payer picks up the tab. And our legislators rolled over and let the mega-corps do this in return for a few dollars in their campaign chests. In many cases the unions of these corps gave up wages on the promise of secure pensions. What a mistake that was. Same for a goverment pension. If the promise was made then it should be honored.

 

[2B]

This post has some interesting turns. I'm hearing "woulda and shoulda" but the problem remains political for pensions. It's great to give the workers better pensions but its even better to neglect to fund them so the money can fund pork to buy other votes. Most public pensions I've stumbled across are to be funded by "future tax revenues" either by design or as the result of severe underfunding. As the boomers retire out of government, the pension demands will swell. It's great to say that the "promises" to the workers have to be honored but the future taxpayers will have a voice in what happens when they elect their government.

Private pension defaults seem to be heavily concentrated in "big" industries that bought labor peace with unsustainable pay and benefits. Steel died a horrible death. Airlines were run like regulated utilities for decades which allowed a swelling of the pay and pensions for the workers. Auto companies were similar but the regulation was based on financial ability for other nations to compete until the 1970's. Automotive hourly pay and benefits for assembly line workers are substantially out of line with other comparable positions. The only question is how long will the UAW allow Ford and GM to survive.

The shock to many when their pensions are taken over by the federal "pension insurance" is the cap placed on the pension amounts. Also, niceties like heath coverage go away.

 

[Texas Proud]

Newguy.. I told you I thought you would be safe no matter what they wanted to do...

My thoughts on the other... yes, public pension are 'to high' in some ways... I was talking to my friend who works for the city... he will get 2.2% per year of his highest 3 years salary... so, if he gets a big raise at the end of his career it acts as if this was his salary his whole career... seems strange...

AND, he said they had a plan 'A'.. I think it was that.. where the employee could put in a little more money and get 3.X... I do not remember what it was... but that has now been taken away from new employees...

AND, he said that management (don't know what level, but at least director) gets TWO years credit for each year of work!!! What is up with THAT

Finally, and this is from memory so it could be off a bit.. and it happened a number of years ago... the mayor decided to give the police chief a 'raise' just before he retired... he got ONE, yes ONE check at this higher rate... and his pension went up by many 10s of thousands of dollars a year.. the city counsel repealed his raise as quickly as possible, but it was too late.. he had gotten that ONE check and he now quailified for the higher amount...

THESE are the things that need to be fixed.. the abuse... the retire at 55 yo with 'full benefit'.. the last few years being the base... the COLA also if you will... maybe it will require higher wages, but I doubt it... but if it does, then at least we KNOW how much gvmt is costing us NOW... and we can adjust..

 

[LRS]

What abuse? If I sign a contract with a government or company, and they tell me that in lieu of wage increases, I am going to receive a nice pension, started at age 55, cola'd, etc., then that is the agreement. If the government or company mismanages the money I invest in my pension for 30 years and reneges on their contract, they are criminals. If they blame me for their problems and turn the customer base/taxpayers against me to divert attention from their own incompetence, they are ******* criminals.

 

[youbet]

If they blame me for their problems and turn the customer base/taxpayers against me to divert attention from their own incompetence, they are ******* criminals.

While that may be true, the fact still remains that if pension and retiree health care obligations from the past drag the company into bankruptcy today, you are up the proverbial creek.

Only legislation that mandates current period full funding of pension obligations and retiree health benefits can solve the problem going forward.

If you're still working (everyone, not just Tawny Dangle) and counting on a pension or retiree health benefits, do you understand the state of funding for your pension and benefits?  Is the money there or is the plan counting on future taxes or company profits?   

 

[LRS]

The money is supposed to be there, but who knows if it really is, or will be in five years? I guess if you are saying that states or corporations might find ways to get out of paying their obligations to retirees, that is always possible. It is not the retiree's fault if the state or corporation decide to use the pension money for pork or padding CEO's benefit packages. The cause of these defaults is fraud on the part of the company or state government, not the "greedy" desire of the worker to collect his or her pension.

I'm going to bet my pension will be there in 5 years. I am going to collect it and not lose one night of sleep over it, nor will I feel one iota of shame for taking it. If the state defaults, I have other means to live on. Other workers will simply get the shaft. It's a disgrace.

Every state government in the country and every major corporation knew well ahead of time that the baby boomer generation would retire in time. Why didn't they prepare for this event? I can only guess that part of their plan was to allow the pension plans to be overwhelmed and go into default. In the meantime, the pension funds served as a giant slush fund to be plundered over and over again. Blaming state workers for the taxpayers' woes simply deflects attention from mismanagement and graft in government. Same for corporations.

 

[2B]

There's a lot of "right" and "wrong" but that's not the issue. The key words are "legal" and "expedient." It's easy for government to "payoff" employees with juicy pensions unavailable in the private sector. It's easy for management to buy labor peace with pension plans and benefits they know will eventually crush the company when they know they'll be long gone with their cushy pension (not heavily tied to the company's health in most cases if you watch the deals.)

Say what you will about contracts and what you deserve. The coming reality is more defaults and the spill over into the public sector. When people hear what airline pilots "lost" and still receive after the default, there isn't much sympathy from most people. The same will happen when the typical American is staring at their shrinking SS check and meager 401k when their former chief of police is getting his pension whacked.

The new pension law will probably end the traditional, fixed payment pension plan as we know it in the private sector. Companies will not want the undefined liability and market risk. After that, taxpayer revolts will impact the pubic sector.

 

[dumpster56]

What abuse? If I sign a contract with a government or company, and they tell me that in lieu of wage increases, I am going to receive a nice pension, started at age 55, cola'd, etc., then that is the agreement. If the government or company mismanages the money I invest in my pension for 30 years and reneges on their contract, they are criminals. If they blame me for their problems and turn the customer base/taxpayers against me to divert attention from their own incompetence, they are ******* criminals.

Your darn right!

 

[dumpster56]

Yea everyone gets to have their own 401K

wasn't that an old way to additionally compensate the big wigs in companies in addition to their pensions 30 years back??

 

[LRS]

The taxpayers are going to revolt and do what? Lynch public retirees? This is not a matter that can be put to a vote. If voters decided public employee wages, we would all make the minimum wage.

The legislators at the behest of voters have already implemented a multi-tier pension system that ensures that new hires are reamed up the butt from the onset. They know they are the lowest of the low and their benefits package reflects that. Good luck at the DMV next time you need to renew your DL, by the way. Smart people are not working in government anymore.

Our state has suffered from a spate of lame anti-tax/anti-government referenda in the last several years. Many of these ultimately proved unconstitutional and have been reversed, costing taxpayers millions of dollars. They are often promoted by large business concerns who profit behind the scenes. So much for "tax revolts."

 

[2B]

Anymore? Based on my exposure to DMV, they never did.

 

[Leonidas]

If voters decided public employee wages, we would all make the minimum wage.

...Smart people are not working in government anymore.

As they take away money from the back side (pensions) they will just have to give it up front on the salary. My former employer is desperate for qualified new hires - they are offering $10,000 signing bonuses.

 

[2B]

As they take away money from the back side (pensions) they will just have to give it up front on the salary.  My former employer is desperate for qualified new hires - they are offering $10,000 signing bonuses. 

The job market has really shifted. I was laid off in early 2002 and did next to nothing for almost 2 years. I'm now making 15% more than I did in 2002 and could change jobs for 10% more with a phone call.

 

[Texas Proud]

Tawney...

I have NO problem with you getting a pension that 'matches' what you should get... I do have a problem with politicians that keep making it 'better' just to get by the latest problem... or they say, we have it good today, so lets make the retirement better for ALL people who EVER worked here..

And why should 'we' pay a benefit based on only three years work If you worked part time for 25 years making say $15K per year and then got a great job making $75K the last three years... your pension is based on the $75K... YOU never paid anything close to this amount... your pension should be based on all those low years and the few high years... that is what my SS will be...

And why should 'we' be expected to work until 65, but 'you' can start a full pension at 55 that we have to pay for NOW, if they did not use ONE CENT of general tax money for your retirement.. I do not have a problem with whatever you got... but that is not the case... you are getting a LOT more than you put into the system..

And yes, the ones that are getting 'screwed' are the young... but in reality, they are probably getting what thier contributions can support, no more, no less..

 

[dumpster56]

Tawney...

I have NO problem with you getting a pension that 'matches' what you should get... I do have a problem with politicians that keep making it 'better' just to get by the latest problem... or they say, we have it good today, so lets make the retirement better for ALL people who EVER worked here..

And why should 'we' pay a benefit based on only three years work If you worked part time for 25 years making say $15K per year and then got a great job making $75K the last three years... your pension is based on the $75K... YOU never paid anything close to this amount... your pension should be based on all those low years and the few high years... that is what my SS will be...

And why should 'we' be expected to work until 65, but 'you' can start a full pension at 55 that we have to pay for NOW, if they did not use ONE CENT of general tax money for your retirement.. I do not have a problem with whatever you got... but that is not the case... you are getting a LOT more than you put into the system..

And yes, the ones that are getting 'screwed' are the young... but in reality, they are probably getting what thier contributions can support, no more, no less..

Then throw the g=d darn bums out of office!!

$hit the american public are dumber than anything I can see. Keep re electing the same jerks we all hated in high school.

 

[honobob]

 
And why should 'we' pay a benefit based on only three years work  If you worked part time for 25 years making say $15K per year and then got a great job making $75K the last three years... your pension is based on the $75K... YOU never paid anything close to this amount...  your pension should be based on all those low years and the few high years... that is what my SS will be...

  NOW, if they did not use ONE CENT of general tax money for your retirement.. I do not have a problem with whatever you got... but that is not the case... 

Texas Proud
I can't imagine how a person works part time at 15K for 25 years and then goes to the boss and says "give me one of them full time $75K jobs so I can retire in 3 years" . 

More likely the 15K librarian/school teacher/emergency medical tech who couldn't get the full time hours because of the voters electing the same old same old or a new flash in the pan who gives the taxpayers money to developers/Walmart/brother-in-law so they end up only getting partial credit for their parttime work that is multiplied by their age times their usually lower than private industry wages.  Thanks for your 28 years of service here's your $1100 monthly pension!

I don't know of many public sector pensions that are 100% employer funded.

Do you think dragging all the workers down to the lowest level is the solution?

 

[Leonidas]

The mess that government pensions are in is only a symptom of the bigger problem with government in general. Increasingly, we have demanded expanded and better services from our governments while not facing the reality that those improvements cost money. We’ve elected politicians who are willing to act like magicians who can pull rabbits out of their hats by giving us what we ask for while distracting us from the real costs of things.

Government pensions are an example of shorting the cost of employing all of the firefighter, cops, teachers, soldiers, garbage collectors, etc. by paying salaries that are lower than those jobs would really be worth. But since it’s hard to get people to fight fires, arrest bad guys, teach our brats, fight our wars and pick up our trash on the cheap; the costs get pushed off into the future when those people all retire. The employees accept the deal, the politicians pull the rabbit out of the hat, and all the taxpayers say “ooooohhh” and applaud.

We’re in a crisis with pensions because demographics and the markets have conspired to come together and unravel the cloth that the magic was made of. All the baby boomers that spent decades going into burning buildings, getting shot at by crooks, cursed at by teenage students, shot at by guerillas around the world and hauling off our nasty trash are retiring and they expect to get paid what they were promised. When the dance is over somebody has to pay the piper.

We’ve exacerbated the problem by voting for the man or woman who is the biggest whore for our vote. In what strange world would it make sense to pay millions to get a job that pays a few hundred grand? But it routinely happens in elections. Face it, from dogcatcher on up to the president, somebody is footing the bill and they want something in return. The people that get elected to public office are experienced whores by the time they get their hands on our tax dollars, and the inefficiency, waste and outright theft that takes place should not take any of us by surprise.

We need to heed the advice that most of our parents gave us: There is no such thing as a free lunch.

 

[Texas Proud]

Then throw the g=d darn bums out of office!!

$hit the american public are dumber than anything I can see. Keep re electing the same jerks we all hated in high school.

I wish I could... almost all the republicans who said they were for less gvmt are spending money on THEIR favorite pork projects.. and they have increased the obligation of the US by trillions (Not billions) with this drug plan.. someone is going to have to pay it and I wish it was not my nephews and nieces and their kids...

I am not against paying money for things that are needed, but come on... we are just wasting money

But like you say.. the people get the current bum that promises them what they want in charge and nothing changes..

 

[Texas Proud]

Texas Proud
I can't imagine how a person works part time at 15K for 25 years and then goes to the boss and says "give me one of them full time $75K jobs so I can retire in 3 years" .


I don't know of many public sector pensions that are 100% employer funded.

Do you think dragging all the workers down to the lowest level is the solution?

I know of one person who is doing just that.. but their part time was more like $25K.. now full time at $75 so they can retire in a few years..

My sister did 41 years of teaching... and I suggested that she 'game' the system buy doing everything she could do to get extra pay the last three years... she taught summer school.. she tutored through the school.. she took classes that were paid days... and she got a higher pension...

So, yes, it does happen. And as I said, the worst one I read about was the Chief of Police for Houston a few years back.. he got ONE paycheck at a much higher pay and it bumped his pension up a LOT (I remember 10s of thousand a year)..

Yes, there are not many who are doing the part time gaming, but there were a lot doing the extra pay like my sister did..