Public Employee Pensions

I will never, never, ever understand how people could look at a defined benefit plan (of any stripe, including social security) and say "Oh, yeah, we can make that work."

It will be a great day when the last defined benefit plan is replaced by a defined contribution plan and we can all go on our merry way. 

Here is a pretty good discussion about some of the problems with funding public pensions:  http://www.cato.org/multimedia/daily-podcast/getting-grip-public-pensions

It's nothing more than a sanctioned Ponzi scheme.  Most people who create illegal Ponzi schemes think they can either out live it, or keep it going by getting enough new people to throw money in.

Unfortunately there's this thing called reality that will ultimately crush every one of these.  I chalk it up to the generational theft mindset that our politicians at every level have been living by the last 30-40 years.  From top to bottom it's give me more now, and we'll let somebody later figure out how to pay for it.  Well, later is here.

Except that at least in Illinois, unlike the private sector worker, these public sector workers are excluded from Social Security.  So without the pension, they got nothing coming.

They paid their part into the pension system.  The state fell behind on paying it's share and now wants to walk away.

Two groups whose pensions are not affected?  Lawmakers who caused the state shortfall, and judges.  The last group is excluded from the pension cuts because of the coming legal challenges.  Yes, we are that cynical here.  

Didn't you get the memo?  Everything is supposed to be fair.  

Hello there... poor planner public employee leach chiming in. I happen to live in a city that I do not want to move from. I suppose if I had to, I would.. but I don't. For what I do, the only game in this city is municipal. My utility is cheaper that it's competitors in the state the largest being Exel.... we maintain a rough 10% savings. We happen to have one of the highest customer satisfactions of utilities our size and out competitors in our state, and our reliability beats them too. Cheaper, better, and more reliable... not bad.

So, I pay into Public Employee Retirement Account. PERA does a relatively good job of managing. They have pushed back retirement, increased employee and employer contributions, and cut COLAs. I pay 8%, the city pays 12%.

Now, just down the road, I can do the exact same thing for Exel, and get a pay raise. At least 10-15% for my job. I would pay SS at 6%, and have 12-17% more to put towards a retirement? But that is the trade off, get paid less for a better retirement, or get paid more and do it your self. Just how exactly am I not earning what I have, or not properly planning my future? I planned for the future when I accepted my job that pays less and it's put towards my retirement. Oh, and no we are not union.

I understand that. From what I can see, my pension fund is pretty reasonable and funded. I have seen the worst examples of a much greater benefits and worse funding. In that respect even I do not get how you can expect to get everything by giving nothing. An easy target is UAW... it's just an assembly line job that pays awesome and has killer bennies and retirement... how?

And yes, your retirement is no more guaranteed than mine. When everything is based on sand, and the bottom falls out, we are all done. I don't really have any illusion that I am guaranteed anything if the SHTF. If the fund or State goes broke... then so am I. And no, I do not think the State should go broke over me.

What I think is that the fund should be managed properly. Meaning proper retirement age, proper projections, proper contributions. Even though people are living longer, not everyone retires. People do die. They do leave. There is an attrition.  Even with my fund.. the old timers were guaranteed a 2.5% COLA... well, you earned 2.5% every year over retirement... it did not pay to work... they all retired for the guaranteed 2.5% and just double dipped. That's not right... and the COLA was eliminated for new, and cut for old.

I do not know where the equilibrium is. I do not know where the contract should lie, and where it should be every man for himself. What I do know is that I paid in, and my employer paid in. And my employer didn't pay out of their pocket, they paid out of mine in the form of depressed wages. 20% is coming out of my pocket. I have now SS, and if the fund is improperly managed, then I get squat. Same thing for you if you improperly manage your fund, or if your fund manager does. The only difference is that my fund is managed by the government through regulation. So my government takes on some responsibility for that. You, well, you have to find another fund.

I really am torn on the subject, because you know where I stand when it comes to government. Less is better. There are no guarantees in life. But I also get tired of hearing how unreasonable, selfish, and expect something for nothing I am... not by you guys, but in media in general over the subject. Right now our new Mayor is on a war path to abolish PERA for city workers. And it's all great when we are talking about the UAW, but now this is me... I don't know what to say. All I know is that I'm OK with it... just cash me out and give me what is in my account, and that will have to do... and yes, you will then have to pay me fair market value instead of what I get now.... or I will have to move.... and I will. I;f I am no longer tied to a pension and have a 401.... then I will go where I can make the most money.

It took a hit in the recession. And yes, some of the same tricks were being pulled where I am at. Padding the last few years of work with overtime to recieve a higher pay. It's BS as far as I'm concerned... theft. They also increased that from 3 to 5 years.

Any retirement account should be basically the same. You need so much to put towards retirement, you grow it, and you get so much as you draw out. Any perks guaranteed by the government or favors given just don't pay. If a pool of employees can get together and weather a ups and downs better then great, but it will not turn lead into gold.

I hate waste and fraud as much as anyone... because what it does is steal from those that it should go to. In the case of the retirement pensions... the ones already retied drawing more than they ever put in during good times are now stealing from those paying in... which will never get it because it will go broke. Greed does not only happen from rich people.

You're right, I guess I was being a little broad in my statement.

When I refer to the Ponzi scheme's I'm talking about the Government entities that push for benefits so largess that there's no way they can be paid for down the road.

I don't remember the specifics, but here in Omaha it was so crazy that 20 year retired police officers could work things to make upwards of 6 figures in retirement which was more than they made while fully employed.  They're still trying to fix it. 

I'll be surprised if they do end up reducing them. 

I read the title just above this one about what song represents your Political beliefs and thought of this song when I read your thread title. Won't happen!