Public Pension McCarthyism

[Kenny]

I couldn't decide if I should put this in the Public Pensions thread or not, I'll et xomeone else link there is they want.

http://www.plansponsor.com/OpinionsArticle.aspx?id=6442480472

[Baron Von Raschke]

Well those accusations without any supporting facts have me convinced.

[limabeanactuary]

sure, i'll put it in the thread.

[BadBeatMe]

I didn't click on the link, but I agree with Mary Pat.

[nonlnear]

Well those accusations without any supporting facts have me convinced.
:iatp:

[Duffer]

Pity about the rant from this ex-GRS employee.

Maybe he lied about the true costs of govt pensions, or maybe he was just a tool. Most likely, he believes in their system of funding benefits.

But the problem is systematic: govt pension groups don't follow the rules that everyone else must use. They can underfund the pension, they can discriminate at will, they can exceed all private pension limits, and they don't get fired or jailed if their statements don't work out.

They are the first class citizens trying to make all of us second class citizens feel bad for them. Yeah, right!:viola:

[exactuary]

Pity about the rant from this ex-GRS President.

Maybe he lied about the true costs of govt pensions, or maybe he was just a tool. Most likely, he believes in their system of funding benefits.

But the problem is systematic: govt pension groups don't follow the rules that everyone else must use. They can underfund the pension, they can discriminate at will, they can exceed all private pension limits, and they don't get fired or jailed if their statements don't work out.

They are the first class citizens trying to make all of us second class citizens feel bad for them. Yeah, right!:viola:IFYP

[Duffer]

If I understood the emotional content of the editorial, the headline should have been "Why is everybody always pickin' on me?"

My answer: because he is part of the problem.

[mr coffee]

Pity about the rant from this ex-GRS employee.

Maybe he lied about the true costs of govt pensions, or maybe he was just a tool. Most likely, he believes in their system of funding benefits.

But the problem is systematic: govt pension groups don't follow the rules that everyone else must use. They can underfund the pension, they can discriminate at will, they can exceed all private pension limits, and they don't get fired or jailed if their statements don't work out.

They are the first class citizens trying to make all of us second class citizens feel bad for them. Yeah, right!:viola:

They aren't the first class citizens. They don't have big 401Ks with matches and sweet deferred comp plans. Picking up garbage, writing tickets, fighting fires, with limited growth opportunities, salary increases, and mobility.

We made promises to pay them a modest pension. And now some of us are too cheap to pay what we owe. Some of us suddenly say their pensions are rich because the funds we stupidly invested our 401Ks in tanked. That's not second class. That's no class.

[Mr. Micro]

They aren't the first class citizens. They don't have big 401Ks with matches and sweet deferred comp plans. Picking up garbage, writing tickets, fighting fires, with limited growth opportunities, salary increases, and mobility.

We made promises to pay them a modest pension. And now some of us are too cheap to pay what we owe. Some of us suddenly say their pensions are rich because the funds we stupidly invested our 401Ks in tanked. That's not second class. That's no class.

I don't see why the bolded is important at all. If someone is willing to be a firefighter for $xxx a year, should we be paying him $xxx+40,000 because there is limited growth, salary, and mobility? Why does the garbage man need to make $60K+ if someone else will do the job for less? If he needs a living wage he can do something that pays more.

In private industry, I don't really care what they get paid. When someone gets paid from our $$$$, taken from us without choice or competition, I have a problem.

Also, I think many have VERY "sweet deferred comp plans". Far, far better than private industry with fun rules like: your pension is based on your total income in your last year of work. Of course you can work 20 hours/week overtime in your last year and easily game the system costing US tons of money, but nobody cares.

[Arthur Kade]

They don't have big 401Ks with matches and sweet deferred comp plans.
Who does?

We made promises to pay them a modest pension.
:rofl:

Quiz for the reader: Identify the public pension actuary.

[nonlnear]

We made promises to pay them a modest pension. And now some of us are too cheap to pay what we owe. Some of us suddenly say their pensions are rich because the funds we stupidly invested our 401Ks in tanked. That's not second class. That's no class.
How do you feel about parents being able to oblige their children for military service at birth? If the kid decides they don't want to go to war when they turn 18, they're just selfish, right? Hey, their parents promised. Who do these upstart kids think they are to renege on their parents' promises?

[EA4ME]

Who does?


:rofl:

Quiz for the reader: Identify the public pension actuary.

What proof do you have that public pensions are not modest? Please spare us any links to articles that point out a few (< 1%) of retirees in a plan making more than $100,000.

Here's some info from 2008, I would say modest definitely describes the average pension.

http://www.empirecenter.org/DataBank/FileData.cfm?FileID=224

[Will Durant]

What proof do you have that public pensions are not modest? Please spare us any links to articles that point out a few (< 1%) of retirees in a plan making more than $100,000.
Two words: Guaranteed COLAs

In addition, based on final year of pay.

[MountainHawk]

It's pretty simple. Public pensions should be illegal. Now, that means public employees need to be paid more in salary, but that's fine. Taxpayers should be the ones to pay for the services they receive, they shouldn't be able to pass the buck to future taxpayers who didn't have a say in the negotiation of the pension.

[wooHoo]

It's pretty simple. Public pensions should be illegal. Now, that means public employees need to be paid more in salary, but that's fine. Taxpayers should be the ones to pay for the services they receive, they shouldn't be able to pass the buck to future taxpayers who didn't have a say in the negotiation of the pension.

Public employers need to compete with private employers. Of course, now many private employers do not offer traditional pensions for new employees.

[EA4ME]

Two words: Guaranteed COLAs

In addition, based on final year of pay.

Average based on final year of pay is the exception, not the rule.

Not all plans offer guaranteed COLAs, and those that do are often modest. For example, in NY the COLA is equal to half of the increase in CPI (not greater than 3%) but only on the first $18,000 of benefit. That's extremely modest. MA has similar. In other states (CO, SD) where the COLAs are a little high, they have temporarily stopped paying them. There's room for change and adjustment to public plans, but they are in no way as bad a shape as the media likes to point out. I don't think we can deny that the media is about the sensational. A modest public plan that is just ticking along, paying benefits and accumulating assets is not a head turner. You don't hear about those.

[MountainHawk]

Public employers need to compete with private employers. Of course, now many private employers do not offer traditional pensions for new employees.
So pay a higher salary. All costs for government should be borne by the governed, not future taxpayers.

[WellThen]

It's pretty simple. Public pensions should be illegal. Now, that means public employees need to be paid more in salary, but that's fine. Taxpayers should be the ones to pay for the services they receive, they shouldn't be able to pass the buck to future taxpayers who didn't have a say in the negotiation of the pension.

Not to mention that it removes a way for corrupt (and stupid) politicians and union officials with which they can screw taxpayers. I'm all for paying government officials cash salaries which reflect current market conditions, and releasing taxpayers from as many long term obligations as possible.

[echo]

So pay a higher salary. All costs for government should be borne by the governed, not future taxpayers.

A Defined Contribution plan should be able to meet this objective. It seems to be the defined benefit plans that run into issues.

[Duffer]

Average based on final year of pay is the exception, not the rule.

Not all plans offer guaranteed COLAs, and those that do are often modest. For example, in NY the COLA is equal to half of the increase in CPI (not greater than 3%) but only on the first $18,000 of benefit. That's extremely modest. MA has similar. In other states (CO, SD) where the COLAs are a little high, they have temporarily stopped paying them. There's room for change and adjustment to public plans, but they are in no way as bad a shape as the media likes to point out. I don't think we can deny that the media is about the sensational. A modest public plan that is just ticking along, paying benefits and accumulating assets is not a head turner. You don't hear about those.

If funding ratios were better, if plans were managed more for safety, and if costs were matched against the services provided, there would be no headlines. If a public employer gives a spiked benefit worth $1/2 million (rare but it happened), and if they put that contribution into the plan in the same year, then there would be no headline. The trouble we have is that none of those responsibilities were met by the responsible parties.

[Steve Grondin]

Average based on final year of pay is the exception, not the rule.
Final year vs final 3 year might make a somewhat of a difference in spiking, but it does still provide much more inflation protection than career average. What do you think the most prevalent public pension comp base is?
A modest public plan that is just ticking along, paying benefits and accumulating assets, maintaining funding ratios close to 100% with relatively level % of payroll contributions.... You don't hear about those.
Because they are as common as unicorns.

[FashionableFedora]

It's pretty simple. Public pensions should be illegal. Now, that means public employees need to be paid more in salary, but that's fine. Taxpayers should be the ones to pay for the services they receive, they shouldn't be able to pass the buck to future taxpayers who didn't have a say in the negotiation of the pension.

Is it really necessary to eliminate them? Couldn't the goal of avoiding generational theft be accomplished by fully funding the plans and investing assets conservatively?

[The Obese Dog]

Is it really necessary to eliminate them? Couldn't the goal of avoiding generational theft be accomplished by fully funding the plans and investing assets conservatively?

Theoretically, yes. Practically, probably not.

[Duffer]

Is it really necessary to eliminate them? Couldn't the goal of avoiding generational theft be accomplished by fully funding the plans and investing assets conservatively?

That would make good sense, if you do not have the moral hazard of self-dealing involved. But the immediate problem of improving GASB rules, followed by tough actions to actually pay for the pensions promised, along with the self-serving court protections for future years.... all of these are reasons some of the public has just given up on these plans.

[nonlnear]

Is it really necessary to eliminate them? Couldn't the goal of avoiding generational theft be accomplished by fully funding the plans and investing assets conservatively?
Yes, but the systemic problem is that governments get to write their own accounting rules. They have a knack for writing rules which free up revenues for projects which have short term benefits for the electorate, and underfunding projects which are less visible, or have longer horizons. Can a government write an accounting rule so unbreakable that it can't break change it? No. When you write the rules, there are no rules. Are the people clamoring for more bread and circuses? Just bump the discount rate on your pension fund up a notch and it'll free up some more gravy for a while. Screw the grandkids. We'll have plenty of stooges like mr coffee around in forty years to lay guilt trips on the victims.

If public pensions were managed by a third party trustee who was forbidden from having any government guarantee, and had its funding based on the current payroll rather than the liabilities of the fund, I would have no problem with public pensions of any kind.

[mr coffee]

Is it really necessary to eliminate them? Couldn't the goal of avoiding generational theft be accomplished by fully funding the plans and investing assets conservatively?

That would be a huge step forward. And by fully funding, use a financial econ based discount rate instead of dreaming up madoff-type returns. People might behave better when they everyone knows how much things cost.

[exactuary]

That would be a huge step forward. And by fully funding, use a financial econ based discount rate instead of dreaming up madoff-type returns. People might behave better when they everyone knows how much things cost.In a word, PEPTA: http://nunes.house.gov/UploadedFiles/HR567_-_Final_Bill_Text.pdf

http://www.nctr.org/pdf/BurrjtltrSenateS347.pdf

http://nctrfederalenews.blogspot.com/2011/07/ways-and-means-holds-hearing-on-nunes.html