5 ms·

People need to understand, the value of a 100% of final-salary pension for people earning 100K retiring at 55-60 is likely millions. It's even worse with the ga

People need to understand, the value of a 100% of final-salary pension for people earning 100K retiring at 55-60 is likely millions. It's even worse with the games people play with PTO and other benefits (where they bump pay 20-30% in their last year to get that pension benefit for the rest of their lives). Look at the average retiree's 401(k) balance for comparison and it gets pretty clear how unfair this is. There's a huge political opportunity for someone to tell this story properly and get a restructuring done.

arebop 6y ago
It's one thing to "restructure" the comp package for future employees, and something else to change compensation arrangements retroactively after your employers have upheld their end of the deal.
- treis 6y ago
  I don't think it's quite that black and white. The deal that was struck was between the government workers and the voters at that time. That deal, more or less, said that future tax payers would pay for their pension. As a group, those then future and now present tax payers don't have much of a moral obligation to follow a deal that they never agreed to. And the workers don't get to act indignant that their pensions are in question. Their unions negotiated the agreement and chose to let the buck be passed instead of insisting on pensions being fully funded. The bargain was, at least in part, corrupt. The various public unions would campaign for and help elect those that would give them more money. An obvious conflict of interest that raises questions on why a shady deal should be upheld. The pensioners are, in general, gaming the system. They artificially inflate earnings at the end of their career to pump up their pension. Nepotism is rampant and there are plenty of positions with absurd salaries for what they do. They've sold out new entrants in their field to protect their own pensions. In general they're a bag of dicks. Fuck them.
SamReidHughes 6y ago
The thing is, this can only happen federally because of the Contracts Clause, and fixing certain states' problems isn't a national issue.
Gustomaximus 6y ago
> where they bump pay 20-30% in their last year to get that pension benefit for the rest of their lives I've heard this claim many times before. Is there data supporting this or did a handful of people do it and word spreads like it is far more common that actual.
- dantheman 6y ago
  This one is a bit old: Pension spiking could cost CalPERS nearly $800 million https://www.latimes.com/business/la-fi-pension-spiking-report-20140910-story.html https://www.latimes.com/business/la-fi-pension-spiking-repor...
clivestaples 6y ago
I saw that a hundred times at a small school district in Southern California. As retirement nears (age 55-59), take a promotion from the classroom to the district office, and a $50-75K pay raise. Three years later, that is the salary used to calculate your pension payments... For life. I live in a neighborhood with two firefighters who were captains, retired at 50, and make over $100K a year. It's totally unsustainable.
- dantheman 6y ago
  It's generational wealth transfer from the young and poor to the old and relatively rich. It should be called fraud and theft, because that's what it is.
  - clivestaples 6y ago
    It is absolutely fraud. The whole idea of public service is that you make sacrifices on the front-end, the public takes care of you through benefits and retirement. There were kindergarten teachers making $120K a year for 6.5 hours per day and ~180 days year. True, they had a masters and 15+ years of experience. EDIT: The often worked much more hours.
  - pbourke 6y ago
    While we're throwing rocks at teachers and firefighters, would you consider the trillions of dollars that the GOP made off with during the "Tax Cuts and Jobs Act" smash and grab job fraud and theft? What about the pensions of workers (many unionized) which were obliterated by corporate restructurings during the financial crisis?
    - clivestaples 6y ago
      Fraud is fraud. I'll throw rocks at any grifters stealing from me and my family.
      - eldavido 6y ago
        Me too man. Tired of this partisan bickering. Parent obviously doesn't like the GOP, fine, but call a spade a spade.
hiram112 6y ago
Yep. If they paid out the value of those pensions upon retirement at the cost of a similar annuity and an estimate for the health care costs, people would probably be more angry than they are now, as they don't realize just how generous these are. To buy an annuity at age 55 worth $100k / year with guaranteed health, dental, long term care, etc. for an employee who's estimated to live another 30 years would cost a few million dollars. A quick Google search shows that the media 401k balance at 55 - 65 in the US is under $75k. The amount of non-guaranteed dividends, cap gains, and withdrawals made to ensure it lasts 30 years would probably not even cover the cost of Obamacare from 55 to 65 when they're eligible for Medicare.

arebop 6y ago

It's one thing to "restructure" the comp package for future employees, and something else to change compensation arrangements retroactively after your employers have upheld their end of the deal.

treis 6y ago
I don't think it's quite that black and white. The deal that was struck was between the government workers and the voters at that time. That deal, more or less, said that future tax payers would pay for their pension. As a group, those then future and now present tax payers don't have much of a moral obligation to follow a deal that they never agreed to. And the workers don't get to act indignant that their pensions are in question. Their unions negotiated the agreement and chose to let the buck be passed instead of insisting on pensions being fully funded. The bargain was, at least in part, corrupt. The various public unions would campaign for and help elect those that would give them more money. An obvious conflict of interest that raises questions on why a shady deal should be upheld. The pensioners are, in general, gaming the system. They artificially inflate earnings at the end of their career to pump up their pension. Nepotism is rampant and there are plenty of positions with absurd salaries for what they do. They've sold out new entrants in their field to protect their own pensions. In general they're a bag of dicks. Fuck them.

SamReidHughes 6y ago

The thing is, this can only happen federally because of the Contracts Clause, and fixing certain states' problems isn't a national issue.

Gustomaximus 6y ago

> where they bump pay 20-30% in their last year to get that pension benefit for the rest of their lives I've heard this claim many times before. Is there data supporting this or did a handful of people do it and word spreads like it is far more common that actual.

dantheman 6y ago
This one is a bit old: Pension spiking could cost CalPERS nearly $800 million https://www.latimes.com/business/la-fi-pension-spiking-report-20140910-story.html https://www.latimes.com/business/la-fi-pension-spiking-repor...

clivestaples 6y ago

I saw that a hundred times at a small school district in Southern California. As retirement nears (age 55-59), take a promotion from the classroom to the district office, and a $50-75K pay raise. Three years later, that is the salary used to calculate your pension payments... For life. I live in a neighborhood with two firefighters who were captains, retired at 50, and make over $100K a year. It's totally unsustainable.

dantheman 6y ago
It's generational wealth transfer from the young and poor to the old and relatively rich. It should be called fraud and theft, because that's what it is.
- clivestaples 6y ago
  It is absolutely fraud. The whole idea of public service is that you make sacrifices on the front-end, the public takes care of you through benefits and retirement. There were kindergarten teachers making $120K a year for 6.5 hours per day and ~180 days year. True, they had a masters and 15+ years of experience. EDIT: The often worked much more hours.
- pbourke 6y ago
  While we're throwing rocks at teachers and firefighters, would you consider the trillions of dollars that the GOP made off with during the "Tax Cuts and Jobs Act" smash and grab job fraud and theft? What about the pensions of workers (many unionized) which were obliterated by corporate restructurings during the financial crisis?
  - clivestaples 6y ago
    Fraud is fraud. I'll throw rocks at any grifters stealing from me and my family.
    - eldavido 6y ago
      Me too man. Tired of this partisan bickering. Parent obviously doesn't like the GOP, fine, but call a spade a spade.

hiram112 6y ago

Yep. If they paid out the value of those pensions upon retirement at the cost of a similar annuity and an estimate for the health care costs, people would probably be more angry than they are now, as they don't realize just how generous these are. To buy an annuity at age 55 worth $100k / year with guaranteed health, dental, long term care, etc. for an employee who's estimated to live another 30 years would cost a few million dollars. A quick Google search shows that the media 401k balance at 55 - 65 in the US is under $75k. The amount of non-guaranteed dividends, cap gains, and withdrawals made to ensure it lasts 30 years would probably not even cover the cost of Obamacare from 55 to 65 when they're eligible for Medicare.