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Feds to bail out state pension funds?

Discussion in 'The Okie Corral' started by Mr981, Sep 30, 2012.

  1. devildog2067

    devildog2067

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    7% for 30 years is not unreasonable--to fund benefits which are not inflation adjusted and are based on this year's salary.

    But every pension system I've seen bases your pension on the last few years' salary--i.e., the highest possible ones--and gives increases in benefits for inflation.

    7% is not unreasonable--but 7% above inflation is.
     
    Last edited: Oct 4, 2012
  2. jpa

    jpa CLM

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    Even if the fund has a few underperforming years, the higher yield years will make up for them. The stock market has highs and lows. The 7% return will fund a 75% retirement with no adjustments for 31 years. Inflation adjustments start after 3 years of retirement. The pension amount is based on the top 3 consecutive years of salary and the contributions the employee and employer both make are always a percentage of the employee's salary (11.5% each).

    I don't know anyone who has retired for 31 years. As a matter of fact average life expectancy for a cop after retirement is about 5 years. So should his family get a refund of the rest of his contributions? It averages out and it's not without risk, but the pension has been very prudent about balancing their portfolio.

    Let me guess, all your money is socked away in gold ingots under your bed?
     

  3. sourdough44

    sourdough44

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    The USPS missed a 5 Bil $$ payment the other week. Do we need another reminder we are out of money? We can't continue to borrow 40 cents on every dollar spent. I realize few want to really cut anything, Europe here we come.
     
  4. jpa

    jpa CLM

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    The USPS is learning a hard lesson about not using funding for long-term liabilities to pay for operating costs. That's the same problem a lot of states are getting themselves into. Without the power of compounding returns on their investments, the bill that's going to come due is only going to get bigger and bigger. They need to suck it up, fund pensions fully and move forward. The politicians who used the pension contributions to pay for pet projects, new programs and random other bureaucratic nonsense need to go to jail.
     
  5. certifiedfunds

    certifiedfunds Tewwowist

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    What do we do with the politicians who negotiated unrealistic pension obligations in the first place?
     
  6. Brucev

    Brucev

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    Pensioners should be paid exactly what they are due. If a state has underfunded the pension, the state should be held liable for the full amount. Let the taxpayers of that state pay up. And... let the burden of paying be applied across the board to all persons... i.e., real people and even the faux corporate persons.
     
  7. CAcop

    CAcop

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    Research San Jose. They had one of the worst retirements in the state yet they somehow can't fund the pension. Orange county is another. They lot money in the 90s. Who lost money in the 90s? People committing fraud and got caught and sent to club fed. Morgan Hill is actually doing very well for employee pensions because they set up a secret account for rainy days. They actually have the best pension for non public safety in the area because of it.
     
  8. devildog2067

    devildog2067

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    And everyone should get a castle, and a unicorn, and free hugs for life.

    :upeyes:
     
  9. Clutch Cargo

    Clutch Cargo Amsterdam Haze

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    The Texas Municipal Retirement System has always been financially sound due to conservative investing. We have not had a year-end bonus in a few years, but we are on solid financial ground.
     
  10. Brucev

    Brucev

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    No one has the right to castles or unicorns or hugs. Pensioners who were promised their pension as a part of their compensation have every right to expect that pension to be paid by the state which made the agreement. If it cost the taxpayer money... tough. The pensioners are not obligated to sacrifice so that taxpayers can avoid paying. :wavey:
     
  11. devildog2067

    devildog2067

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    Pensioners entered a legally binding contract, which is something else entirely. It should have been very obvious that there was no possibility that the government would have the funds to pay the contracts at the time they were signed. That's part of the reason I left government service.

    Because the governments are broke, they pursue legal methods (like bankruptcy) which void a contract when one party is incapable of paying.

    The pensioners are at the mercy of whatever they get. That's the nature of depending on someone else to fund one's retirement. There simply isn't going to be enough revenue to fund pension systems, no matter how much you want to raise taxes. You can only squeeze the taxpayer so much.
     
  12. certifiedfunds

    certifiedfunds Tewwowist

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    lol !!
     
  13. CAcop

    CAcop

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    The interesting thing about cities going bankrupt is that it makes things better for the employees because the books are now opened. No more "behind closed doors" awarding of contracts or funding pet rograms.

    Vallejo employees are essentially being paid the prevailing wage for the area with similar benefits. If they didn't they would have no one wanting to work for them. See San Jose for details on that. They are trying to retroactively nogotiate without bankruptcy and it is going badly.
     
  14. sourdough44

    sourdough44

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    There is no $$$, the Federal Gov't is borrowing 40 cents for every dollar spent. A painful adjustment is in store.
     
  15. certifiedfunds

    certifiedfunds Tewwowist

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    Prevailing wage isn't necessary for gov employees. There will always be plenty of people without better options to take those jobs. Performance will remain static.
     
  16. CAcop

    CAcop

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    There is always a prevailing wage, even for government workers. Maybe my view is colored by living and working in and near the Silicon Valley for nearly 20 years.

    An IT worker for a governement needs to be paid and compensated somewhat similarly to a private sector work. If not he will leave for the private sector. The city of San Jose is about to learn that lesson the hard way. I suspect within a few years their IT department will consist of new grads looking for experience and then moving on quickly. There will of course be a cost to this turnover.

    Now for my job. Sure their is no direct equivalent for my job in the private sector. However their are dozens of governement agencies within easy commute times of where I live. Take San Jose for example. Thier pay used to be consistently #3 for the county they are in. Their benefits was probably last but at least they had plenty of assignments. They laid off over 100 cops. They then tried to hire them back when a bunch started leaving for other agencies. They could see the writing on the wall. Now they are dead last in terms of pay and benefits, possibly for the entire Bay Area. An area of 7.7 million people. They have gone from 1400 officers to just under 1000. For 1 million people in the city. Each one of those officers retired or left for other departments. During good economic times they have a 6% hire rate from app to hire. For the planned academy class they have coming up they are going to have to interview 1,000 people minimum to get what they want. I suspect they will not fill their academy spots because they are dead last in pay and benefits.

    Maybe it is because you are from the South that you think the way you do. Traditionally the South has had the worst pay and training for officers. Maybe you guys in the South just don't care about the quality of officers you have protecting you. I guess CA here in the West, which has paid the best and has given new officers the most training, cares more about who is going to come when they dial 911.
     
  17. certifiedfunds

    certifiedfunds Tewwowist

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    No, not really. Not every IT worker is a good IT worker. They may lack skills, certs or even the desire to be productive. If they do, government work is perfect for them at whatever wage it pays because they aren't cut out for the private industry.

    Government shouldn't compete for the best talent. We need the best talent out producing......to pay for government.
     
  18. CAcop

    CAcop

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    Apparently you missed "somewhat similarly."

    Unless of course your motto for government worker's pay is "pay ****, get ****."

    Which is perfect for you since you live in the South.
     
  19. Clutch Cargo

    Clutch Cargo Amsterdam Haze

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    Texas Municipal Retirement System does NOT base pension on the last few years salary. If they did, my pension would more than double.
     
    Last edited: Oct 6, 2012
  20. certifiedfunds

    certifiedfunds Tewwowist

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    So is it a "prevailing" wage or a "somewhat similarly" wage?

    I don't have a motto about government workers pay. Generally speaking I think "pay ****, get ****" is a pretty good one though. Lets face it, if you're willing to accept government work that pretty much means you're going to "give ****" or you'd be in the productive sector in the first place. So, yeah, pay **** get ****.

    Also, like I said (perhaps you missed it) it isn't good for the country to have government competing with industry for talent. Like anything else government does, it will make for an inefficient use of resources. So "pay ****, get ****" is actually pretty good, yeah.

    Then reduce taxes on the productive sector.

    Government workers should aspire to move into the productive sector, like a promotion. They should dream of it and want to get out of government ASAP. Working for the government shouldn't be pleasant.

    Then, miraculously, public pension obligations go down.

    Amazing how that works.
     
    Last edited: Oct 6, 2012