Public Pension Problems.

[USGrant1962]

I had a typo, I meant wage base eroded over the last 40 years..... I corrected it.

Got it. I agree - real wages have been flat for a long time. More like 50 years according to Pew, though they have come back up slowly over the last 20 years. Hopefully the tight labor market will help with that if the Fed doesn't dump us into a recession first.

For most Americans, real wages have barely budged for decades | Pew Research Center

 

[Just_Steve]

Funny.... we didn't need "employee availability incentives" in private sector to get employees to show up for work. It was expected that if you weren't sick that you show up for work... and it was equally expected that if you were sick that you stay home and get better and not come in and get everyone else sick. It was a frame of mind... an integral part of corporate culture.

And then you wonder why some public sector employee groups aren't respected... abusing sick time and vacation time is cheating and cheaters don't get respected.... respect has to be earned.

And btw, I'm fine with employees donating to colleagues with legitimate need for sick time... that happens in the private sector too... in effect a backwards way for the company to help out an employee in a bad spot and create espirit de corps.

How does one abuse vacation?

 

[Chuckanut]

The constant 'beat down' of public employees continues..... Middle Class folks pitted against each other.... No mention of the eroding wage base of the last 40 years.............

+1

A race to the bottom doesn’t help many people.

 

[MissMolly]

But one of these things is not like the other.

I've seen numbers like $6 trillion for unfunded public pensions. KFF says total ACA tax credits are $4.6B/year. So the two or three percent of high net worth recipients that may be "gaming" might be worth $100M/year in subsidies. All things being equal, in 60,000 years the ACA gaming problem might match the public pension problem.

But they are both the same in that there some folks on both sides that are gaming the system. Pensions have been around for decades. ACA only 8 years. There are far, far more people collecting public pensions than there are people collecting subsidies, so I would expect it to have a larger dollar figure attached to it. But your argument here is that since the gaming of ACA is not as much money, it's OK. And how do you know it's only 2% - 3% of the total are high net-worth individuals? I can also claim that it's only 2% - 3% of pensioners that have gamed the system. Why should the other 97% be vilified for something that is entirely out of their control?

 

[Texas Proud]

But they are both the same in that there some folks on both sides that are gaming the system. Pensions have been around for decades. ACA only 8 years. There are far, far more people collecting public pensions than there are people collecting subsidies, so I would expect it to have a larger dollar figure attached to it. But your argument here is that since the gaming of ACA is not as much money, it's OK. And how do you know it's only 2% - 3% of the total are high net-worth individuals? I can also claim that it's only 2% - 3% of pensioners that have gamed the system. Why should the other 97% be vilified for something that is entirely out of their control?

The other 97% (your number) are not being vilified for spiking... but there are other things that they can be.... again, not at all locations...



The problem with the pensions is not spiking, even though it is happening... I think that it is too high of benefit for the time worked and other benefits received compared to the amount invested for these benefits... now, not all, but the ones that have very little from the employee is one area.... but even then I could live with that if the gvmt entities put aside the money they should put aside for the promise they made...



Why should LE and fire fighters retire in 20 years at full pension... for maybe 40 to 50 more years? Why should a gvmt employee be able to retire at 55 with full pension? Now, a lot of place have changed their formula and people cannot retire at 55 with full pension anymore... so things are slowly getting fixed...


As to you comparison with the ACA credit... it is not the same... if I have low income for one year I get one year of benefit... but if you spike a year or 3 then you can get up to 30 years or more of benefits... my mom is now on her 36th year of receiving a pension for working (IIRC) 12 or so years... not a big pension as Texas had a 2% per year factor and she does not get COLA (BTW, she did not spike)....

 

[Bestwifeever]

We also have something like that where I work. The city ran the numbers and would rather us save the time and add it to our years of service vs taking the day off payed sick then paying someone 1.5 overtime and adding that to their high years for pension calc.

That makes sense. Maybe that’s how the policy got started, but in my town the substitute teachers get paid less than half the average teacher’s salary, so the opposite is now true. Again, not blaming the teachers.

 

[gstillson]

Getting an ACA subsidy is about as much gaming the system as receiving compensation from your employer without paying tax on that compensation.

This has been going on for DECADES, way before ACA subsidies were a thing. It is called employee provided healthcare and the numbers were huge, dwarfing any subsidy figures.

There are other things, a person with millions of dollars getting a subsidy to buy a $90,000 electric supercar or put a massive amount of solar on their roof, or (insert 100 other examples if you dig around enough)

 

[pb4uski]

How does one abuse vacation?

I misspoke... I meant to write "abusing sick time [-]and[/-]as vacation time"

 

[Chuckanut]

May I suggest that we think of better ways to ensure that all workers have access to retirement systems that are ample and safe. DB pensions no longer work well for many workers both in private and public employment if they have one at all. IRA's and 401K's were not designed to replace DB pension, but to supplement them.

So, what we need is a system that allows all workers/employers to fund a solid retirement system that will provide ample benefits to the workers, not bankrupt the employer today or in the future, and can't be hacked by schemers at the expense of most of us.

Suggestions?

 

[scrabbler1]

Getting an ACA subsidy is about as much gaming the system as receiving compensation from your employer without paying tax on that compensation.

This has been going on for DECADES, way before ACA subsidies were a thing. It is called employee provided healthcare and the numbers were huge, dwarfing any subsidy figures.

And remember that the tax benefit from the employer health insurance subsidy rises as income rises, the opposite of how the ACA subsidy works.

Also, when an employee in an employer-sponsored group plan pays his share of the HI premiums, they can be paid for using a pretax deduction, something not usually available to those of us in the individual market. With the Standard Deduction increased for 2018, it lessens the chance we can deduct our medical expenses (which only apply if they exceed 7.5% or 10% of AGI, another restriction for those of us in the individual market). So, we are stuck using after-tax dollars to pay our HI premiums.

 

[OldShooter]

Well because 1 did not get lucky as all employees have the same opportunity to work overtime if they choose. So if one employee chooses to not work overtime that is on him. There is no way for my situation for the overtime to be given out unfairly as you are hired overtime based on the last overtime day worked. You talk about being rewarded for long service so why not be rewarded for working more than others.

If you worked on average more than others for your whole career then I don't see anything wrong with your being rewarded for that. If OTOH your "more than others" is just a recent spike then that should not increase your employer's pension obligation to you.

What is your position for people that have 401k accts as they can contribute more if they work overtime and get a employee match which raises their retirement acct.

Really that's apples and oranges. Receiving an increased payment for one's entire retired life just because of a near-the-end OT spike is basically IMO cheating the system and, for public employees where this occurs, cheating the taxpayers. An employer match in a retirement plan is available to everyone and does not involve any gamesmanship.

 

[Midpack]

May I suggest that we think of better ways to ensure that all workers have access to retirement systems that are ample and safe. DB pensions no longer work well for many workers both in private and public employment if they have one at all. IRA's and 401K's were not designed to replace DB pension, but to supplement them.

So, what we need is a system that allows all workers/employers to fund a solid retirement system that will provide ample benefits to the workers, not bankrupt the employer today or in the future, and can't be hacked by schemers at the expense of most of us.

Suggestions?

You won’t like what it would cost, and you will be paying for it like everyone else.

I’m not sure what’s wrong with IRA’s and 401k’s, too many people don’t use them, rob them periodically, or wait until it’s (way) too late. I’m not keen on helping fund retirement for the 2/3rds of folks who aren’t putting anything in a 401k for starters, or those who woefully underfund - keeping SS and Medicare solvent long term is challenging enough to me.

https://www.bloomberg.com/news/arti...americans-aren-t-putting-money-in-their-401-k

 

[pb4uski]

May I suggest that we think of better ways to ensure that all workers have access to retirement systems that are ample and safe. DB pensions no longer work well for many workers both in private and public employment if they have one at all. IRA's and 401K's were not designed to replace DB pension, but to supplement them.

So, what we need is a system that allows all workers/employers to fund a solid retirement system that will provide ample benefits to the workers, not bankrupt the employer today or in the future, and can't be hacked by schemers at the expense of most of us.

Suggestions?

Personal savings, preferable tax-deferred or tax-free personal savings of 5% of income from age 30 grading to 10% at age 40 and beyond... from both employee and employer.... invested in a balanced portfolio of stocks and bonds... 100/0 to age 45 and then grading to 60/40 at age 60.

Currently available to everyone.

I'm guessing that would provide a very good income starting at age 60.

 

[hopefullyoneday]

Why should LE and fire fighters retire in 20 years at full pension... for maybe 40 to 50 more years? Why should a gvmt employee be able to retire at 55 with full pension? Now, a lot of place have changed their formula and people cannot retire at 55 with full pension anymore... so things are slowly getting fixed...

Not sure what you do for a living but maybe put yourself in OUR shoes. Do you put your life on the line dodging bullets or going into a burning building to save lives, Probably not. Do you go home every night with flashbacks of what you saw during your workday, burned up babies, family shot and killed for no reason, again probably not. LE and FF's bodies are broken and battered even b4 we get a chance to retire but we still come to work and do our jobs saving YOU the taxpayer. A LE and FF admittedly most of the time we come charging into the scene without regards to our self to help others. I have arrived on scene of fires that i have gone inside without proper equipment on to save a life that i see from the street that needs saving. Putting myself at risk of burns and cancer because i know their chance of survival will be gone if i take the time to fully bunk out and grab a hose line b4 going in. Don't worry its proven that FF and LE don't live as long as most people who retire so we wont be getting those benefits as long as you would.

 

[hopefullyoneday]

If you worked on average more than others for your whole career then I don't see anything wrong with your being rewarded for that. If OTOH your "more than others" is just a recent spike then that should not increase your employer's pension obligation to you.
The employer is the one making the rules not me i am just using them to my advantage. I bet you take advantage of all the write offs when it comes tax time even though you may not need the money. I work as much overtime as i can because of the benefit promise they TOOK AWAY from me. I have to work the overtime because of the pay cut i took because of the PROMISED benefits just so i can contribute to a 457 and IRA. And that 20 years i payed into SS b4 I got onto the fire dept i wont see a dime because of my pension so i also gave that up for my PROMISED benefits.

Really that's apples and oranges. Receiving an increased payment for one's entire retired life just because of a near-the-end OT spike is basically IMO cheating the system and, for public employees where this occurs, cheating the taxpayers. An employer match in a retirement plan is available to everyone and does not involve any gamesmanship.

Like i said earlier in my employment their is no gamesmanship everyone has the same opportunity to work overtime if they choose. As far as end of career spike on paper it will look as though i did that. But if you were to look at my career overtime worked it wont be anymore hours it will be because of the couple percent raise i get each year.

 

[OldShooter]

Not sure what you do for a living but maybe put yourself in OUR shoes. Do you put your life on the line dodging bullets or going into a burning building to save lives, Probably not. Do you go home every night with flashbacks of what you saw during your workday, burned up babies, family shot and killed for no reason, again probably not. LE and FF's bodies are broken and battered even b4 we get a chance to retire but we still come to work and do our jobs saving YOU the taxpayer. A LE and FF admittedly most of the time we come charging into the scene without regards to our self to help others. I have arrived on scene of fires that i have gone inside without proper equipment on to save a life that i see from the street that needs saving. Putting myself at risk of burns and cancer because i know their chance of survival will be gone if i take the time to fully bunk out and grab a hose line b4 going in. Don't worry its proven that FF and LE don't live as long as most people who retire so we wont be getting those benefits as long as you would.

I would be interested in some data to back up these claims. Firefighters are not even listed in the 25 most dangerous occupations (https://www.usatoday.com/story/mone...es-25-most-dangerous-jobs-america/1002500001/) and at leas one report says firefighters' jobs are actually safer than the average job. (https://calwatchdog.com/2013/01/23/firefighter-one-of-nations-safest-jobs/)

Cops appear to face more danger than firefighters (https://www.bls.gov/iif/oshwc/cfoi/police-officers-2014.htm) but they are still #14 in high risk occupations, just below construction laborers (#13) and below grounds maintenance workers (#11).

The early death claim appears suspect, too. Here (Do police and firefighters die young? - Encore - MarketWatch) we find "The results show very little difference at age 60 in the life expectancy of police and fire as compared with other public employees."

 

[MichaelB]

Thanks for an interesting discussion