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Battle Looms Over Huge Costs of Public Pensions

Discussion in 'Political Discussion' started by PatriotsReign, Aug 9, 2010.

  1. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    From the NY Times....

    http://www.nytimes.com/2010/08/07/your-money/07money.html?_r=1

    "There’s a class war coming to the world of government pensions.

    The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide.

    The have-nots are taxpayers who don’t have generous pensions. Their 401(k)s or individual retirement accounts have taken a real beating in recent years and are not guaranteed. And soon, many of those people will be paying higher taxes or getting fewer state services as their states put more money aside to cover those pension checks.

    At stake is at least $1 trillion. That’s trillion, with a “t,” as in titanic and terrifying."


    My personal opinion is that tax payers should not have to bail out ANYONE'S pension unless my 401k is going to get bailed out. We can't have selective income re-distribution between people of the same economic class....that just makes no sense.

    Thoughts?
     
  2. Real World

    Real World Moderator Staff Member

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    I don't think enough people realize how unsustainable all these pensions are. Especially when you begin to calculate the actual dollars that are to be paid out, with benefits, and increases, over the life expectancy of a 20, 25, or 30 year serviced retiree. These workers retire younger than those in the private sector, and their benefits have been bloated to the absurd, after years and years of built up yield from sweetheart union deals. I've made this point before in here, that monies and increases paid out today, over say a 5 year deal, become the starting point, 5 years from now. So every bad deal that signed, guarantees a worse deal moving forward. Look no further than the 19% raise the fire fighters were getting here in Boston. When that deal is up, the year 5 figure will be where the starting point. It's simply unsustainable. Look at the MBTA, and it's 23 years full pension BS. Who's going to be stuck with that bill? As it stand right now, the T is over $5 billion in actual debt, which moves $8 billion when debt service is factored in. The T requires a 20% bailout each year from the MA sales tax, just to operate at a loss. Does anyone think that the T will go out of business? Of course not. So who picks up the cost in the end? You and I do. Now multiply this scenario by the different agencies that are in similar predicaments, be it by way of their operational costs, or their pension payouts down the road. It's not pretty.
     
  3. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Man, looks like you've done your homework on this topic RW. You just got me more depressed!:mad:

    Someone needs to gather the gonads to speak openly about this and how Americans WON'T bail them out. I'm dead serious when I say I will not accept any tax increase that's purpose is bail out these pensions. I realize I'm just one person, but everyone should feel this way!

    It's just unacceptable. All gov't workers should have to work until 65-70 to get a full pension....no exceptions. When you think about it, we must have a lot stupid people in gov't to sign deals like this.

    And why are just starting to realize how unsustainable all this is?
     
  4. Mrs.PatsFanInVa

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    #24 Jersey

    Cops and firefighters included?

    I don't know about you, but I'm pretty sure I don't want some 68 year old firefighter with bad lungs being the dude opening the hole in my second story roof in order to vent the smoke and save my house. I also don't want the 64 year old grandma firefighter being the one to carry my own unconscious 12 year old, 140 pound son down the ladder to safety.

    Nor do I want a 69 year old policeman being the guy chasing down the 16 year old dude that just ripped off my purse or stole my wallet.
     
    Last edited: Aug 9, 2010
  5. Real World

    Real World Moderator Staff Member

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    Well, I hate to break it to you buddy, but we will be paying. First of all, there won't be enough fat to trim by way of restructuring these deals to self-sustaining levels. The math, in most cases, just won't work. Generally speaking of course. Second, it's not like the pols care that you or I pay. They're not going to let a pension fund disolve, nor are they going to tell you how, or when, they funnel money to a dying balance sheet. How many people even know that the MBTA gets 20% of the MA Sales Tax revenue? Assuming however that they do undertake some form pension restructuring directly, it will most likely be some form of temporary gimmick fix, that only postpones the inevitable. Public employee unions will not allow massive changes, and politicians will never have the majorities needed, nor the stones to confront them head on.
     
  6. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    You're getting off-topic by picking on details MrsP. Maybe you're right regarding the age of retirement for such workers, but what about the

    19% raise

    Boston firefighters are getting?

    What about the unsustainability of public pensions as a whole?

    What about average Americans being FORCED to bail out these pensions when they have no safety net themselves.

    Let's stay on the main topic!:p
     
  7. chicowalker

    chicowalker Pro Bowl Player

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    All valid points, but I wonder if there are other roles they can perform.
     
  8. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    Considering the vast majority of Americans DON'T work for gov't agencies, I see a HUGE revolt brewing. We need to use our elected officials by way of the ballot box to discuss these issues openly and honestly.

    If the average American had a significant increase in taxes to bail out pensions, I guarantee you the poop will hit the fan.

    Don't you agree?
     
  9. Real World

    Real World Moderator Staff Member

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    For accuracy's sake, I think the 19% was later reduced by a percentage or two, but the jist of the figure's point, is still the same.

    I don't think people want 65 year old cops chasing down dead beats in the streets of Chelsea, but there are ways to deal with such issues. Older employees can do different jobs that don't require as much physical stress, or they can cap the age of entrance, or the pension given if older individuals are hired. The bottom line is that no one should recieve a full pension after 20 years of service. We've got people who retire in their 40's with full pensions. Heck, some retire prior to 40, if they were fortunate enough to get in after HS. That's flat out propostrous, nevermind unsustainable with respect to the pension fund.

    I've long maintained that no public employee should recieve a six figure pension. Pensions should be tiered, and capped. The notion that you get the average of your top 3 earning years is outrageous. If you've earned $100k or more, then you should have enough money that $60k by way of a pension, is more than enough.



    I think the poop is closer to hitting the fan than enough people realize. There are a handfull of issues that will/could cause some significant problems for parts of the voting public. The problem here, is that something like 40+% of income earners, don't pay income taxes. So it's going to be a particular segment of the pop that gets upset over the pension problem they'll be expected to subsidize. Interestingly enough, I started watching the John Adams series (HBO) via Netflix last night, and this conversation is reminding me of the tar and feather scene on the Boston docks, where John Han**** refuses to unload a ship, and a British customs agent is barbarously tarred and feathered by a riled up mob. Watching it I was pissed by the mobs actions, while feeling sympathetic to their root point. Anyhow, this thread just reminded me of that series.
     
    Last edited: Aug 9, 2010
  10. Mrs.PatsFanInVa

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    #24 Jersey

    Sorry, you brought it up, I thought it was safe to talk about it since it was one of your own points I was addressing.

    :)
     
  11. Stokes

    Stokes In the Starting Line-Up

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    Clearly Mrs PF you have not watched enough action/cop/firefighter movies. If you had you would know that these fields are full of "desk jobs" that our hero is loathe to accept after being shot twice in the chest, gunning down a bus full of nuns and children, or getting the chief's daughter pregnant. There are TONS of jobs in both fields that do not require vigorous physical exertion.

    Also, I don't know what the cops in your town look like, but in mine I would question the physical fitness of many of them, and most are not even in their 40's forget about 60's!

    If you want to say pensions are deserved for these folks because they perform high risk jobs that not all of us can do I can understand that, but these pensions are handed out after 20-25 years, whereas we (I) will be working 40-45 years before I can retire, and even then it will depend on my own personal savings, not a guaranteed government pension. Its an example of a nice idea running wild and being abused/costing too much money to be viable long-term.
     
  12. Mrs.PatsFanInVa

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    #24 Jersey

    Forgive me, you're right. I must have been too busy actually being a firefighter/medic to watch enough television.

    Just FYI - while there are "desk jobs" in a PD there aren't any in The FD. There's not much need for it. 911 operators, maybe, but most firefighters aren't qualified to be dispatchers without special training. Fire Inspectors, of course, but there are only a handful of them and they, too, require either a college degree or highly specialized training. Plus, they spend a good deal of time climbing around "on-site" which can be quite physically taxing.

    But, I'll tell you what, since you obviously DO watch enough television/action movies to know - what exactly are the "tons" of jobs available in a fire department which do not require vigorous physical exertion?
     
  13. PatriotsReign

    PatriotsReign Hall of Fame Poster

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    #18 Jersey

    I think the bottom-line here is that we're going to have figure out something because we can't afford their pensions now and raising taxes doesn't deal with resolving what is wrong with the system.

    What would YOU propose?
     
  14. BelichickFan

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    #24 Jersey

    It's very simple, you don't get a pension until the appropriate age of 65 or 67. If you "retire" at 45 then you can get a "desk job" elsewhere for 20 years until your pension kicks in.
     
  15. Real World

    Real World Moderator Staff Member

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    Interesting idea. That's the first time I've heard something like that. Hmm...
     
  16. Mrs.PatsFanInVa

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    #24 Jersey

    I think it's a moot point for those who have already retired.

    You can't just change the rules in midstream and make them retroactive. People took those jobs with an understanding that pension benefits were a condition of the job - much like the actual job duties were. Most government employees made a smaller salary than private sector folks did simply because they opted to defer the money and wait until they retired to collect it. It would be grossly unfair, after 20 or 30 or 40 years to tell them "Too bad, so sad." They've reached the point where they're most likely not going to find another job because of their age and they surely don't have enough time to start a 401K which will support them in their dotage.

    Cities and towns signed contracts with these people - contracts are binding (or they should be.) If the employee lived up to their end of the contract then it is the government's responsibility to live up to their's. If they negotiated (or allowed themselves to be talked int) a bad deal, that's on them.

    As for current employees with, say less than 15 years on the job, or new hires, I do believe that the laws are changing and the contracts do NOT allow for early retirements or huge pensions. The off-sides of that is, of course, they are now having to pay more in salary to recruit responsible employees.

    I've got some experience with government pensions - my father worked for the federal government, as did my father-in-law and my uncle, as does my husband. I worked for a town government at one time. My eldest son and his wife both currently work for the City of Chicago.

    I've got to tell you, based on personal experience, it's not necessarily the sweet deal everyone seems to think it is. My father, my uncle and my father-in law all worked for over 30 years for the government. They are all dead now, survived by their widows. My mother gets a government pension check for $1,102.00 a month. My aunt received the same while she was alive. My mother in law gets a few hundred less each month because my father-in-law did not work in the government as long as my dad and uncle. Hardly the "big bucks" or the 6 figures everyone keeps harping about.

    I get no pension from the town I worked for. They used a pay-on-call system for their fire and EMS and offered nothing to any of their employees, even the full timers. We had the option of putting our own funds into the Volunteer fire-fighters Union (who constantly fought to keep us out because we were technically not volunteers due to the fact that we were paid when we worked) but who could afford the dues?

    My son and his wife are responsible for their own pension plans. They can contribute to a 401K but the city is phasing out any matching funding. IT won't matter if they retire after 20 years or 50 years. What they get in retirement will be only what they put into retirement. The city is also in the process of phasing out health insurance for their employees. I believe they will be on their own within the next 5 years. (Although Obamacare may change that.) My son has mandatory days off without pay. My daughter-in-law has seen her class size increase each year due to lay-offs of teachers with less seniority than she has. Both he and she live in constant fear of being laid-off themselves.

    I don't think there are any easy answers - but I also don't think that just suddenly refusing to pay anyone's promised, contracted pension is the answer, either.

    Private pensions which go belly-up turn to PBGC. I'm unsure where government employees would turn to if federal pension plans go bankrupt but it would seem grossly unfair to all of their retirees if there was not some relief offered from somewhere - just as it is offered to those who lost their private pensions.

    If that happens, there will be a whole lot of old people suddenly standing in line at the welfare department - and the taxpayer will still end up paying for them - the only difference is that they'll lose their dignity along with their money that way.
     
  17. DarrylS

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    These are essentially legacy costs, how come no one ever questions the legacy costs of federal employees??.. or better still of our Armed Forces??... consider that a soldier can retire at age 38 and be entitled to free medical care for him and his family until he dies along with a pension.. it is not a huge pension, but it is not bad to collect for the next 45 years...

    Not every military person sees combat..

    Firefighters and Police have had a very sweet deal for a long time, and are really spoiled..
     
  18. Mrs.PatsFanInVa

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    #24 Jersey

    That'll work for some....but it's not really going to work for firefighters or cops. Many of them are physical and emotional wrecks by the age of 50 or 55. You can't expect a person to do such draining work day after day for 20 or 30 years without having it take it's toll.

    There's a reason why so many firemen and policemen are on disability - and it's not that the majority of them are whining malingerers. They are honestly (and sometimes brutally) finished with their productivity.

    Many fire department still have mandatory retirement at 55 or 57 for their firefighters. Once again, there's a reason for that - the reason being that the job is a physically demanding one - and it's not safe for anyone who is not in absolutally prime condition.

    Even SS allows people to retire early. Granted, they don't give you full benefits, but no one says "get a job elsewhere until 65 or 67." I don't see why it can't be the same for other pension plans.
     
  19. Stokes

    Stokes In the Starting Line-Up

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    Sooo, either my attempt at humor fell flat, you missed it, or you are as miserable as you seem from your posts. Maybe a bit of all three, I do usually find myself much more amusing than others do...

    At any rate, you are right, desk jobs are much more common for police than firefighters, and even many non-desk jobs in the PD are commonly not physically taxing. The point is that even for a job where physical rigor would limit service time it is untenable to have someone work only into their late 40's-early 50's and then receive a guaranteed gov't check for the next 30-40 years.

    I do agree with your later post that we can't change the rules now for contracts already signed, but going forward we have to reform the pension system to make it more financially viable. Here in MA some of the worst abuses of the pension system were from people not performing these dangerous services (PD, FD, etc), but career hacks in the turnpike authority and other bureaucracies filling meaningless positions and holding on for a few more years to get the service time for a 100% pension. Some of these loopholes have been closed recently but it doesn't change the problem that we're spending too much on guaranteed pensions for people that could take more responsibility for their own retirement.
     
  20. Mrs.PatsFanInVa

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    #24 Jersey

    That's not exactly true, Darryl. Their coverage changes and they do pay a portion - although it is a small one.

    Covered Services

    TRICARE will continue to provide comprehensive coverage to you and your family, including prescription drug coverage, however, some services will no longer be covered:

    Eye exams only covered if you re-enroll in TRICARE Prime
    Hearing aids not covered
    TRICARE Extended Care Health Option services not covered for family members
    Chiropractic care not covered
    Dental care available through the TRICARE Retiree Dental Program
    Costs

    While on active duty, you paid nothing out of pocket and your family's costs were minimal. Now, as a retiree, you'll see an increase in costs:

    Annual TRICARE Prime enrollment fees ($230/individual or $460 per family)
    TRICARE Prime network copayments
    TRICARE Standard and Extra costs increase by five percent
    Catastrophic cap increases from $1,000 to $3,000 annually per family
    No change in prescription costs


    Retirement

    Plus, once they turn 65 they are required to pay for Medicare just like everyone else does and TriCare becomes secondary.

    I know you don't like it, but I personally have no problem whatsoever with whatever benefits the military offers upon retirement.

    I just thank God there are people willing to do it and I am more than willing to pay them for it.
     

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