Let's Get the Facts Straight About Public Employee Pensions

[proud2BlibKansan]

<skip>

But before we get too far into the debate, it is important that we establish a threshold of truth—a foundation of facts that will help guide us toward smart and productive solutions.

There's a big lie being told. Public employees do not earn more than their private sector counterparts, according the Manhattan Institute, a conservative think tank. And public employees are not fat cats or members of the privileged class, as some argue. They are teachers, nurses, sanitation workers, janitors, cops and firemen. These are people who deliver essential public services—the very services that taxpayers expect to receive in return for their tax dollars. Of the 7.7 million retired state and local government workers in 2008, the average retirement benefit was $22,653. (http://www.census.gov/govs/retire)

Public employees are contributing substantial amounts to their pension funds. In 2008, the 14 million state and local government workers contributed $37 billion to their pension funds. The average contribution was $2,512 per active employee. It is worth noting that taxpayers are directly responsible for only about 14 percent of public retirement benefits. (http://www.census.gov/govs/qpr/)

Public pensions mean that households with retired public workers use less public assistance than other retirees' households, saving the nation $7.9 billion per year in healthcare spending. Many public employees are not covered by Social Security and so rely even more on their pensions. (AFT calculation using Table 6 http://www.nirsonline.org/storage/nirs/documents/pension_factor_web.pdf and http://www.census.gov/govs/retire/2008ret05a.html)

The irony should be lost on no one that the very people who seek to deprive public employees of their federally protected right to organize, and to deny them a portion of their health and pension benefits, are the ones who have championed giving tax cuts to millionaires, further exacerbating the fiscal crisis. Requiring sacrifices from working people but not from the very wealthy is not a viable solution.

more . . . http://www.aft.org/newspubs/news/2011/011411pensions.cfm

[HereSince1628]

1. Thanks for that. n/t

[Starry Messenger]

2. k & r

[NOLALady]

3. Thanks for the post.

Hubby and I are both retired public employees. We get no SSI, but we pay over 400$ a month for our health insurance.

[WCGreen]

4. One of the biggest lies from the opponents of Public Employees..

is that most of the money owed to the pension funds was used by the entities to cover shortfalls in budgets that by law are required to be in balance.

The money owed to the funds by the government entities is the major reason that there are short falls and so budget problems for those same entities.

[proud2BlibKansan]

6. They also leave out the fact the the employees make sizable contributions

I rarely see that mentioned.

[ProgressiveProfessor]

15. CA governors of both parties used to raid the retirement funds until barred by an initiative

from doing do.

[WCGreen]

31. Yep. they sure did...

And the GOP is making the public workers the enemy and the media is going with it...

Who do they think is going to buy shit if no one is making a livable living

[AngryAmish]

5. Fireman is a pretty cushy job around here

[proud2BlibKansan]

8. I'm hoping you forgot the sarcasm smiley

[AngryAmish]

16. No. I know a lot of firemen.

In Chicago it is 24 on, 48 off. Every fifth working day day is a Daley Day, a day off.

In order to move up you need to know how to fight fires. Thus there is a lot of competition to get into firehouses in bad neighborhoods (who have more house fires). But if you are content to have an easy job you go to what is known as a "country club", an affluent area with few fires. One guy I know has been on the job for 2.5 years and has fought exactly one fire.

The firemen my age did not have to work as paramedics (which is a much worse job). But they were required to train as paramedics. Then when the city wanted to put them on ambulances hundreds of them refused to recertify, barring them from the ambulances. (But nowadays new guys on the job have to work as paramedics).

If asked privately firemen will tell you it is pretty cushy.

[proud2BlibKansan]

21. Yes let's ask these guys:

Two firefighters killed; dozens injured in Chicago fire
http://abclocal.go.com/wabc/story?section=news/local&id=7858316

[seaglass]

23. Yeah, I know a lot of firefighters. My husband is one.

In my small town we do not have a lot of building fires though we do provide mutual aide to the surrounding towns and cities, however all firefighters are required to be EMTs. They are first to arrive to car accidents, heart attacks, suicides - you name it. Not cushy at all.

[hedgehog]

26. I was thinking about this since reading this thread - firemen, ambulance

personnel, police officers and ER workers see the worst things that can happen to people day after day. There has to be a lot of burn out.

[we can do it]

33. Right Cushy- Give Me a Fucking Break

[hedgehog]

9. You can say that again......

http://archive.chicagobreakingnews.com/2010/12/wake-today-for-2nd-fireman-killed-in-blaze.html

[hedgehog]

7. Not to mention, why is a signed contract considered null and void

when it involves a large company or a government entity and a person who has worked for them in good faith of receiving deferred payment?

[LiberalFighter]

19. That is an important key item. The pension is the result of deferred income.

Deferred income is income that a worker agrees to accept at a later date. Under law income must be paid within so many days of the hours performed. One of the few exceptions to that law is for pensions.

If governments or companies are going to cancel the pensions then they should be required to immediately return the wages used to fund the pensions to the workers. Including the portion that was provided by the government or company.

[gratuitous]

24. Yes, let us not neglect the "negotiated contract" concept

The reason public employees get these contracts is because they have decided to band together in a union and negotiate their pay and benefits. They hire attorneys and labor law specialists to work out the terms of their employment. The concept of workers uniting to negotiate for themselves is anathema to certain segments of our population, and they do their level best to keep workers compartmentalized, isolated, and away from each other when it comes to contracting for the labor they provide and how much of the wealth created by their labor is due them.

[hedgehog]

10. My daughter works for a county sewer district. Did it ever occur to anyone here

that some people spend their working lives literally stepping in our shit? If a person is working in a sanitary sewer and gets a cut or scrape, if they don't take care of it at once, they are apt to lose a limb or even their life to massive infection.

[badtoworse]

11. Edwina Norton?

[hedgehog]

12. My daughter is lucky enough to be an engineer, so she generally stays outside.

OTOH, she never wears her work boots home!

[badtoworse]

14. I'll bet!

[ProgressiveProfessor]

13. Several facts that were not brought up are also important

By any reasonable actuarial standard, most public pension plans are seriously underfunded. Reasons vary depending on the plan.

Without substantive increases in taxes/public revenue, there is not enough $$$ to raise the funding in the plan purely from the employer side without substantive cuts in current services. The alternative is the non-payment or radical reductions in benefits to retirees. Both have happened recently in the US.

[hedgehog]

17. Ya know, I just maxed out my credit cards on a trip to the Bermudas,

and my husband took the mortgage money and blew it on the ponies. Do you suppose the bank will agree that since I don't have the money, I shouldn't have to pay them back?

[Skidmore]

18. I wanted to post something about public employee pensions too

because I have been one in the past, and my current husband is one now. I have worked on federal research grants and for the state, and at one point many years ago, for the county. I worked hard, as does he. He holds onto his job so we can have insurance and was retirement age several years ago. I lost my job at the same time I was diagnosed with cancer, and have remained unemployed. No one wants to hire old broads. We both have been careful stewards of the taxpayers money that was allocated to us to use for the public, and we are taxpayers too (contrary to popular belief that public employees do not pay taxes). I managed grants, followed the guidelines as outlined by the regulations, and always costed goods and services we purchased from the private sector to get the most bang for the buck.

Now when we were both employed it wasn't in management positions but in merit staff jobs, and we were REQUIRED to participate in the state pension plan. You could not opt out. Then we were denied access to our own funds after 5 years. My retirement plan has been VESTED for a couple of decades, even though I have not been employed as a public employee for a number of years now. The monies that went into this plan were a portion of MY SALARY. As an employee, I received a salary, which included cost of living wages periodically. There were a number of years that there were no raises of any kind. There are no bonuses in this type of work. Quite often I worked 10 and 12 hour days, and there was no overtime compensation. If the work was to be done to meet the obligation of the ocntract or service, we were there to do it.

Now the states are looking for ways to walk away from these plans. This morning I heard one of the stuffed shirts on Morning Joe blathering on in outrage about some state employees (probably in NY) who walked away at age 45 with annual retirement payments in the six digit area. I don't know anyone like this. My piddly bit of money that I can't even access for another 5 years even should we lose everything now would only provide me with barely $1000/month upon retirement. Our combined retirement funds would allow us to keep our home and live as we do now, and we live fairly frugally. We meet our bills for the basics and replace essentials as needed. We have no debt beyond the house payment. Now if they are successful in removing this and then strip SS away, that leaves those of us who did our best to serve the nation with no income in our old age.

We do not have much and we certainly do not have retirement funds to allow us to live for decades in comfort or to survive a medical crisis. Because of this, our future plans now include a contingency plan for homelessness.

[LiberalFighter]

22. How many upper level government types negotiate and receive outrageous pensions?

They really need to focus more on the high leveled government employees that make more than 95% of their average highest 5 years. Maybe it should be less. But anything over 95% needs to be seriously audited and exposed to public review.

And the same thing for corporate executives. Except, there should be a max they can receive such as 95% if their average highest 5 years is $100k and 65% above $100k with a max total of $500k.

[xchrom]

20. recommend

[Spike89]

25. Yeah, and at least here (Oregon) pensions were bargaining chips

Especially in the 80s and 90s during economic downturns when the state was literally having trouble making payroll, they negotiated over and over again with the unions, always substituting cost of living raises with retirement benefits. For instance, if cost of living went up 3% and the contracts called for cola adjustments for workers, the state would avoid paying the higher rates in return for boosting or guaranteeing pension returns. Of course, those same politicians then began crying about how unfair the pension plans were when it came time to pay them.

[Still a Democrat]

27. You think $2512 per year is a big contribution?

Could a private sector employee could drop that in a 401k and then retire after 30 years with enough to buy health care and a good pension for life?

Nope. Nowhere close.

[badtoworse]

28. Assuming he averaged a 5% annual return, he'd have about $167,000 after 30 years

It's a nice chunk of money, but it won't fund a big retirement. A good question to ask is what is the expected Present Value of the pension benefits that the retiree will receive at the time he starts receiving benefits, after 30 years of service. Comparing that number to the future value of the pension contributions (i.e. the $2512 yer year contribution for 30 years) will give an indication of what portion of the retriement benefit costs were actually paid by the employee.

Edited for clarity

[Still a Democrat]

29. Exactly, and it's a lot bigger number than two grand a year

n/t

[hfojvt]

30. that's pretty good money for retirement

lots of people do not make $22,000 a year for working. I don't. And those people are likely getting $1,000 a month from social security too, many of them. And paying lower taxes than working people. In the obvious example, they don't lose 7.65% of their check to FICA nor do they lose 4% to some retirement fund, nor are they making IRA contributions.

I wonder about an average though - the higher paid people bring the average up. How many are making less than that average? I know that I will, assuming I ever get to retire. Actually though, I sorta retired in 2006. By dropping down to part-time then, that means I will probably work longer, but I am taking my retirement now, in the form of half-weeks.

[maryf]

32. K&Rnt