Posted on 01/06/2011 2:14:55 AM PST by Scanian
Unfunded state and city pension liability has been isolated by many analysts as the next big crisis on the horizon. But it looms in relative silence, largely because Americans simply do not want to talk about it.
Let's be honest; it's not exactly dinner table conversation. Many Americans have family and friends that work in public jobs and many of them expect a considerable pension that could be compromised if the system is altered. So the issue is far too personal for public pensioners to embrace any logic that could suggest the system is flawed, while non-pensioners usually want to avoid friction about a sensitive subject.
But despite our reluctance to talk about it, there is absolutely no question that lavish public pensions are a crippling problem for our country.
First, consider that broken and indebted pension funds across the country are quite regularly granting $45K or more annually for fifty to fifty-five year old "retirees" in lifetime pension payments, a payout that would rival or exceed a million dollar annuity settlement for any private sector employee. In some glaring cases, retirees much younger receive higher payouts. Take Glenn Goss, the Florida police officer who retired at 42 earning $65K in pension payments, which, with his projected life expectancy, makes him a $2 million liability to Florida taxpayers. Or perhaps take John McLaughlin, New York firefighter who at 48 retired with an $86K pension, which he collects tax-free on respiratory disability despite being a marathon runner.
(Excerpt) Read more at americanthinker.com ...
My small town of 15K people has a pension shortfall of $9MM. The teachers are working with a contract that allows them to retire at 52. So basically they can work 30 years and then live off a pension for about another 30 years. The new contract for next year is, however, changing this retirement age. It is going down to 50. Ouch.
“If something cannot go on forever, it will stop.” — Herb Stein
And, that pension probably includes “cost of living” increases every year, which, over time, can give the recipient more money than he/she made on the job. Private pensioners do not get that cost of living increase and it should be stopped for public employees.
I suppose no one remembers what the utilities used to do. After touting what a wonderful pension, benefits you would get by working for them; approximately 5 years before you were due to retire; they fired you and in some cases of death denied the beneficiaries payment.
These deals are crippling the states that made them; they can no longer compete with other states that don’t have this albatross around their necks. For this reason, the northeast & California have grim years ahead, as both businesses and individuals look for places without these “fixed costs” to deal with. The taxes to pay for the goodies are simply too much, and nobody wants to pay for services rendered 20 years before (on top of those same services performed by current employees, feathering their nest eggs with the same deals). As the current services are cut, a “third worldness” creeps in (unfilled potholes, less police/fire protection, garbage collection, etc.). Not a magnet for business (see Detroit)...
Part of the problem is the management of these funds. when the stock market was good the funds were fine. Now during tough times everyone is shocked and points to the worst case scenarios as being the average retiree.
If the government institutions would focus on productivity of employees, downsize by a large percentage, and rethink investment strategies of the funds, whether it be increased employee contributions, or longer times for retirement eligiblity things could return to something affordable to the fund.
yeah! let’s take out our frustration on a bunch of elderly, retired pensioneers. that ought to give us real good PR.
camle wrote: “yeah! let’s take out our frustration on a bunch of elderly, retired pensioneers. that ought to give us real good PR.”
Great idea. Let’s continue to ignore the problem; it has worked so far. After all, how bad could it get?
Yes and it wasn't just utility companies either but the operatives words are "used to do" pension plans are vested by law now after a certain number of years, it may be 7 years, I'm not certain about that.
About 10 years ago, I had an in-law's relative, who was permanently "laid off" from a private company after 29 years and 8 months on a 30 year pension plan and the company tried to deny his pension, he got a lawyer and got his pension rather quickly and the company was ordered to pay the expense of the lawyer too.
I tend to agree with you but also agree with the old adage about finding one's self in a hole. The first thing you do is stop digging.
A promise is a promise but government on all levels need to stop making said promises at the very least. All it is, is vote buying at the expense of future generations and now the chickens have come home to roost.
There is games in some areas where the pension is tax deductible due to disability. The example of the marathon running firefighter. This is corruption. Deal with these issues and don't paint the whole retiree group in the same vein.
Deal with the problems, define solutions, don't just ‘bomb’ throw.
bump
As a consequence of Dem mouthpieces talking up the need for "means testing" Social Security, to me this means that now EVERYTHING is on the table: public employee pensions, prohibitions on government bailouts of private sector pensions. Everything.
Some in congress have called for changes in Social Security pensions,,how bout a major overhaul of congress’s pay and benefits if times are so tough.
They would not be cut off - they would get the same thing that I get - Social Security.
There is zero compelling reason to suggest that a public employee should get more than than any private citizen will.
Other than the fact that the union votes were bought with the public’s money.
The money is going away now and current citizens still need the service that they pay taxes for right now, not to fund former employees pensions, and that is the reality of it.
When it all crashes down it all crashes down and there is nothing personal about it.
i have real heartburn when the government can abrigate it’s contractural obligations. if it can do this to retirees, it can do this to contractors, and everybody. then their contracts become worthless. it’s a slippery slope.
i have no problem with new contracts for new hires, but there is an agreement between the state and it’s employees, however good or bad it may be. if they can get out of this one, they can get of any contract. be careful.
Get used to it. It's Government. They can do whatever 51% of the Legislature decides to do. It's called "the monopoly on the use of force". Look it up.
if it can do this to retirees, it can do this to contractors, and everybody.
You do get it. Google up "Fleming v Nestor" and be educated.
L
I know about nestor. it’s just a shame that the state can get out of contracts when they hold others accountable for theirs...
Good comment. Government agencies should immediately bring benefits in line with the private sector for all new hires. They should also modify existing contracts to the extent possible. Same goes for Social Security. I say to the extent possible because WE can't afford promises made to government employees or to SS recipients, but promises have contractual implication.
As far as comments about not touching SS recipients now because "we will be throwing the old people out on the street", the promises to them are no different than the promises to government employees relative to pension.
Regarding comments that government employees should only get with the private sector gets, only SS, that is not true. Many private sector employees have some form of pension benefit. Choosing to work for a company, private or public, because of its pension plan has been an incentive to get educated and work hard, and choose employement wisely. If people didn't work for a company that has a retirement plan, it was their choice.
Bottom line, everything needs to be on the table if it is paid for with our tax dollars, and EVERYTHING needs to be cut back. What I read on FR for the most part is that everyone has their sacred cow and is selective about the demons. Our country will fail if this attitude does not change.
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