The Pundit Guy linked to this piece over on Bloomberg. You already know the story: States and municipalities lose billions due to the boneheaded moves made by the people running the pension plans, now these government leaders are begging Washington for a bailout.
Give me one good reason why the rest of us should bail out public pensions. Lots of people in the "private" (i.e., those paying the bills) sector lost money last year in their IRA's and 401K's. They get no bailout. Why should government workers be a protected class, forever shielded from the boneheaded decisions made by the very people they appointed to manage their retirement assets?
You make less money from your pension? Tough! Suck it up, Mary. Most of us today don't get any pension. We're on our own and there are no bailouts coming our way.
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13 comments:
John Edwards had it right about "Two Americas".
There are those of us that work for a living in the private sector, and those that "work" for the government.
There are also producers and takers.
It's self evident who is in control.
I wrote about this on my blog. The spoiled-brat entitlement mentality is killing America. You can't touch these entitlements or the public employee unions scream for your head on a platter.
The real eye-popping quote from the article:
"Excluding Social Security, public employers’ pension costs are three times the retirement costs of their private counterparts, according to a June 2008 report by the Washington- based Employee Benefit Research Institute. "
3 fucking times the cost, unreal. And public employees wonder why they take a lot of flak.
You work, they golf.
Get used to it.
Maybe I'm naive but I think there will be a backlash against these bloated pensions. Especially when Social Security and Medicare start running into the red in a few years. I stumbled onto a good site about the pension disaster that is brewing.
Why should a young person aspire to own a business or go work for a company? If you want to retire early you need to work for the government. That's the message I am getting.
I understand why we don't want cops and firemen working in the field when they are 60. The physical demands are too great. But when they turn 45 or 50 they can be given the support jobs that are currently filled by civilians. I know many former HPD officers who retire in their mid-40s, draw a pension, then go start a new career (many of them become teachers) to draw two pensions and full medical when they hit 59 or 60. We can't afford this!
I have family members who work for the CA Dept of Correction (CCPOA members) who "retire" on Friday at 50 y.o. with $95,000/yr full medical lifetime pensions and return to work on Monday as $100,000/yr "consultants".
It's a dirty, third world corrupt racket.
I agree with you about bail outs in general. But, don't forget that teachers also do not get the safety net of social security. They won't even get full widows benefit from ssi if they retire from teaching. They also do not really get a "401K" like retirement pay out and must pay incredibly high health insurance. Most retired teachers that I know must work in order to survive. Please do not lump teachers in with "state employees" because they do not get the same benefits.
If you are new to this issue, are you aware that beginning in the mid-1990s the unions and polticians pushed through deal after deal to massively enrich public employee pensions AND cut the amount of money state and local governments put into them?
Your share of this deal has already been spent in the form of lower taxes and more spending in the short run. Their share goes on forever. The bill is massive, the deals irrevocable.
And the solution? Cut the pay and benefits of NEW public employees until no decent worker will work for a public agency, gutting services.
We've been through three rounds of this in NY. The Mayor of NY, who just pushed through allowing teachers to retire at age 55 instead of 62, now proposes drastic cuts in benefits and wages for future NYC employees. He had previously cut the starting pay of new NYC police officers to $25,000.
As the public pension funds get further behind in their funding, my taxes increase to pay the difference. Since my "retirement" isn't protected, I have less money to pay the taxes.
Who will be left to fund this Ponzi scheme when businesses and individuals have gone broke in a never ending downward spiral of public sector greed.
they can be given the support jobs that are currently filled by civilians.
Most of those civilains ARE retired cops.
The key word here is "retired". IF they didn't retire, their pay would go down and the incentive is retire when pay is at its highest otherwise the average pay on which the pension is based would go down.
Wotta country!
Buffy,
"must pay incredibly high health insurance."
I agree with you about this. Teachers get a raw deal when it comes to medical insurance and private retirement accounts separate from their pensions. They are easy marks. The unions don't care, and the teachers are naive. These companies come in and pitch whole life policies which are complete and utter scams. I wonder if the school boards and union officials are getting kickbacks.
"Maybe I'm naive but I think there will be a backlash against these bloated pensions. "
There will be a tax revolt in this country because the math is just overwhelming. Policy makers know that taxes will have to be about doubled just to pay for SS and Medicare. I am not aware of anyone calculating the same for state and local pensions, but it is probably similar. What do you think will happen when the policy makers actually start implementing the new tax rates necessary to fund these pensions in their entirety? Revolt!!
Of course, the other possibility is the federal government will just create money from thin air and bail the local governments out. That will destroy our currency via inflation (which is just another hidden tax anyway).
These will be issues in the next 10-15 years this country will have to face.
Lou, I've read much of what you've written over the years and I know how this might be a sensitive subject but let me enlighten you from the other side of the equation.
I work for HPD and will retire with ~55% of my pay. I vest at 10 years (other municipal employees vest in 5) and can work additional years while my pension benefit is paid into a deferred account.
I know the system is underfunded and there are plenty of reasons for that beside boneheaded investments; our HPOPS system typically gets substantially better returns than average (while we reap 3% to 7% for all those years it made 23% or more).
The officers hired on since 2004 were stuck with a far worse deal too-impacting recruiting since Dallas, Austin, San Antonio, and just about every other Metropolitan area pays better and has significantly better pension benefits (than old timers or new hires). Most of the guys that joined when I did were in their late 20's so they will start hitting their "20" around 50 years of age. While that sounds lucrative to you, the hidden statistic is that HPD officers have an average life expectancy of 60. We do not get free medical either while we are actively employed or when we retire, and we must pay for our own guns, ammo, holsters (most of us anyway), and other items used in our line of work.
Back during Bob Lanier's reign, we were given an increase in our pension instead of a pay raise, at the time finding ourselves having gone ten years without a raise while the country was booming. The city is lawfully obligated to fund at 100% of the actuarial cost yet they do not, and have not, done so EVER in an effort to keep taxes artificially low as an election point.
All the paper shuffles and sleights of hand aside, this just means that taxpayers elected a series of folks that pushed the costs off until later so I don't think the Chapter 9 statutes would work in court, nor do I think it is fair to bag on those of us that have dedicated our lives to protecting the public (an increasingly hostile public) over our earned benefits.
If you want to discuss this in more depth, email me at hppu @ hotmail.com
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