Public Pension Problems.

[ripper1]

Another big problem with the pensions is that long ago some of the unions and other people got voters to agree that pensions could not be reduced put into their state constitution..... and nobody wants to be the person who tries to get the constitution changed...


Illinois is a great example from what I read.... they keep passing laws to change the pension but when taken to court they lose and have to go back to the old way... so, instead of passing a law change the constitution... but that will not happen since the politicians in place do not want to do it..

Instead of wasting their time trying to amend the constitution they can create new tiers of workers with less benefits.

 

[Teacher Terry]

Yes new employees with the state of Nevada have less retirement benefits than we do.

 

[joeea]

it isn't the tax cuts that are causing the problem. It's the spending.

Not quite.

This might help: https://www.politifact.com/truth-o-meter/article/2018/nov/02/five-charts-about-debt/

A portion of which reads:
"What produced this year’s deficit increase?

The two biggest drivers of the projected increase in the 2019 deficit were the Republican tax bill and the bipartisan agreement on federal spending."

 

[Chuckanut]

The tax cuts are certainly a problem, but so is the fact that the Deficit Hawks have gone the way of the Dodo bird.

 

[hopefullyoneday]

I am not blaming public sector people for this but I recently heard two retiring Illinois teachers talking about the 300 sick days each had accumulated over their careers. Per this article (https://www.illinoispolicy.org/reports/unpaid-sick-leave-spikes-illinois-teachers-pension-benefits/) an expensive policy:

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.

 

[Just_Steve]

Instead of wasting their time trying to amend the constitution they can create new tiers of workers with less benefits.

NY is now into tier 6, I retired under tier 4.

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.

I wish I could have added my sick as years of service, NY only let me cash out at 50% per day lump sum.

 

[Winemaker]

So I guess I shouldn't say that the interest rate hikes over the past two years had nothing to do with the increasing deficit either?

 

[brewer12345]

So I guess I shouldn't say that the interest rate hikes over the past two years had nothing to do with the increasing deficit either?

The way these funding ratios are calculated means that as long term rates rise, the funding ratio improves all else being equal. Part of the calculation involves discounting the future payouts to present value, so as longer term rates rise the present value of the liability falls.

 

[OldShooter]

Interesting Chicago Tribune editorial this morning concerning the number of people bailing out of Illinois due to its tax and public pension problems: https://www.chicagotribune.com/news...ation-loss-madigan-exodus-20181219-story.html

 

[ERD50]

Interesting Chicago Tribune editorial this morning concerning the number of people bailing out of Illinois due to its tax and public pension problems: https://www.chicagotribune.com/news...ation-loss-madigan-exodus-20181219-story.html

One thing I couldn't figure, were they using two different measures here, net and gross?

This year’s estimated net reduction of 45,116 residents is the worst of these five losing years.

....

And now in 2018, Illinois lost another 114,154 people.

We're staying for a number of reasons, but family ties will keep us here a while regardless. I've pretty much accepted that if/when we do move, we may be lucky to get our original purchase plus major improvements (done with a lot of not-accounted-for sweat equity) out of this place, after 26+ years. Not counting inflation and the higher taxes we pay.

It's OK. We have liked it here, and the school districts are considered good. And I didn't over-extend myself for the house, so it isn't as bad as it would be for some people whose house represents most of their net worth.

-ERD50

 

[pb4uski]

... I wish I could have added my sick as years of service, NY only let me cash out at 50% per day lump sum.

Just be thankful... in the private sector they have this silly idea that workers only get to use sick time when they are sick... so if you're healthy then you don't get to use your sick time... you actually lose it if you don't use it ..can you believe the audacity!

 

[athena53]

Just be thankful... in the private sector they have this silly idea that workers only get to use sick time when they are sick... so if you're healthy then you don't get to use your sick time... you actually lose it if you don't use it ..can you believe the audacity!

I know- since I don't think I ever took more than 5 sick days a year other than 6 weeks after the birth of my son (worked the day before), I could have retired a couple of years earlier.

 

[Cut-Throat]

Just be thankful... in the private sector they have this silly idea that workers only get to use sick time when they are sick... so if you're healthy then you don't get to use your sick time... you actually lose it if you don't use it ..can you believe the audacity!

The 'audacity' of these benefits comes from the public's unwilling to pay higher taxes to support public services. So, the solution has been to promise higher benefits down the road in exchange for lower wages today.


This is not unlike the Federal Debt, which has just 'kicked the can down the road' for future generations to deal with.


The inability to understand this problem, is what has led to the problems at the state and Federal level... Blaming these problems on government or the people that work there are pretty short sighted. It is the voters hoping for impossible miracle solutions that elect charlatans that promise them.

 

[pb4uski]

The 'audacity' of these benefits comes from the public's unwilling to pay higher taxes to support public services. So, the solution has been to promise higher benefits down the road in exchange for lower wages today.....

I don't have any problem with the promise of a pension in exchange for lower salaries. It is the perversion of benefits... like paying for sick time when an employee isn't sick or, worst of all, goosing their pension by giving them gobs of OT in the year before they retire and basing their lifetime pension on that last year of pay... spiking their pension IIRC.. that make us taxpayers want to puke.

That's just cheating.

 

[Cut-Throat]

I don't have any problem with the promise of a pension in exchange for lower salaries. It is the perversion of benefits... like paying for sick time when an employee isn't sick or, worst of all, goosing their pension by giving them gobs of OT in the year before they retire and basing their lifetime pension on that last year of pay... spiking their pension IIRC.. that make us taxpayers want to puke.

That's just cheating.

There is no difference.... It is benefits in total .... Not just the Pension. --- It's just kicking the can down the road to avoid the taxes today...


People can do the math... You may not like it, but that's the system that was created. Again the fault lies with the majority of voters believing in Unicorns.

 

[pb4uski]

I think I would blame the politicians and administrators that agreed to these benefits not knowing for sure if they could be paid for and the union bosses who I pressed for these benefits knowing that the money might not be there long before I would blame taxpayers and voters.

 

[Cut-Throat]

I think I would blame the politicians and administrators that agreed to these benefits..................

And of course the Politicians were elected by the voters...... Blaming government is part of the problem....



You have to understand how government officials got into office..... The VOTERS that believe in stuff that just isn't real.

 

[gstillson]

And of course the Politicians were elected by the voters...... Blaming government is part of the problem....



You have to understand how government officials got into office..... The VOTERS that believe in stuff that just isn't real.

Then again, the workers also were believing in fairy tale returns that their pension plans were telling them.

In the private sector I had a company give me a rosy projection of stock options and what they could be worth in 5 years. Four years into it the company went under. It was my fault for believing the company and taking a lower salary because of the stock options but there was no taxpayer to bail me out.

I think we can spread the blame around to a lot of corners.

 

[jazz4cash]

Just be thankful... in the private sector they have this silly idea that workers only get to use sick time when they are sick... so if you're healthy then you don't get to use your sick time... you actually lose it if you don't use it ..can you believe the audacity!

Yes, be thankful. My private sector job came with no sick time. We did get sick leave with pay but after 5 days it turned into disability. If you took 4 days more than once, it was like a Federal offense. I do recall some state workers that could apply sick leave towards their pension calculation. In the Federal Gov't you can donate sick leave to other employees who have squandered their benefit.

 

[Sunset]

.......

We're staying for a number of reasons, but family ties will keep us here a while regardless. I've pretty much accepted that if/when we do move, we may be lucky to get our original purchase plus major improvements (done with a lot of not-accounted-for sweat equity) out of this place, after 26+ years. Not counting inflation and the higher taxes we pay.

...... I didn't over-extend myself for the house, so it isn't as bad as it would be for some people whose house represents most of their net worth.

-ERD50

+1
Exactly, what you said.

 

[Just_Steve]

Yes, be thankful. My private sector job came with no sick time. We did get sick leave with pay but after 5 days it turned into disability. If you took 4 days more than once, it was like a Federal offense. I do recall some state workers that could apply sick leave towards their pension calculation. In the Federal Gov't you can donate sick leave to other employees who have squandered their benefit.

Or to the person that has a major illness.
We could do that also but you knew who was really sick and who was a malingerir.

 

[Cut-Throat]

Then again, the workers also were believing in fairy tale returns that their pension plans were telling them.

Most of the workers had a contract, so it was not about their 'belief'. And the ones 'believing' in the fairy tale returns were the administrators of the pension programs.


So, if the workers are to blame, it was their belief that their contracts would be honored under the law.

 

[Just_Steve]

Just be thankful... in the private sector they have this silly idea that workers only get to use sick time when they are sick... so if you're healthy then you don't get to use your sick time... you actually lose it if you don't use it ..can you believe the audacity!

Just a little employee availability incentive.

 

[Helena]

.

When I retired I had the choice to cash out my pension. I chose to take the money and run.

 

[pb4uski]

Just a little employee availability incentive.

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.