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Thread: Super Sized Pensions

  1. #1
    Senior Member Gerry Clinchy's Avatar
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    Default Super Sized Pensions

    http://redtape.msnbc.com/2010/11/in-...oner-q.html#tp

    MSNBC

    In New York, a 44-year-old firefighter retires with a $101,000 a year pension, for life. Near Chicago, a parks commissioner quits and begins collecting a $166,000 pension – a sum sweetened by $50,000 thanks to a one-time retirement year windfall of $270,000. And in California, a former city manager pulls down $500,000 in retirement checks every year.
    The economic struggles of the past decade lit the fuse for the pension fund time bomb. In 2000, half of the 50 states had enough money socked away to cover future pension costs, according to Pew. By 2008, only four states -- Florida, New York, Washington and Wisconsin -- could make that claim. The other 46 are potentially on the road to insolvency.
    Joshua Rauh, associate professor of finance at at Northwestern University, estimates that 20 states will run out of pension money by 2025.

    The pension doomsday clocks in Illinois and New Jersey will strike even sooner, in 2018, he said.
    Another common pension abuse is “double-dipping” – a practice in which employees retire and start collecting their pension, then are rehired to perform their old job at their old salary. It’s a common practice for government workers around the country, despite many rules forbidding it. Workers often argue that they have earned their pension and their right to retire, and if they decide to work during retirement, they're entitled. But the logic there is deeply flawed, said Dean.

    "Pensions were designed to make sure government workers were allowed to grow old with dignity, not to make them rich," he said.
    The outrage, and the actuarial problem
    In this series on super-sized government pay, we’ve already met Phoenix police chief/public safety manager Jack Harris, who’s become the nation’s poster child for “double-dipping.” He retired as chief in 2007 and began collecting a $90,000 pension. Two weeks later, he was hired for essentially the same job, retitled “public safety manager,” and granted a salary of $193,000. Harris attracted nationwide attention after a lawsuit was filed by conservative interest group Judicial Watch. The lawsuit claims the public safety manager’s job was manufactured expressly to circumvent both pension rules and a state law aimed at curbing the practice.

    Peter Tom is a municipal compensation specialist who’s worked in New Jersey’s complicated government worker environment for three decades. New Jersey even has rules designed to enable double-dippers, he said. Yet, he’s seen all manner of pension-stuffing through the years.

    “This would not be allowed in the private sector because pension committees are third party administrators who have fiduciary responsibilities,” Tom said.

    While the outrage factor on six-figure pensions and lucrative loopholes is high, Tom also points to a more practical, actuarial problem: Pension recipients aren’t paying their fair share, creating unfunded liabilities. For example, he said, a worker who pays 5 percent of a $10,000 salary into the system for 24 years, then 5 percent of a $140,000 salary for one year, doesn’t cover the costs of a $70,000 pension.

    "These loopholes create unfunded liabilities that have helped damage the pension pool.”," he said. "Pensioners are never asked to make up the difference.”
    Dean’s website maintains a $100,000 club roster, listing pensioners who enjoy six-figure annual payouts. But life expectancy is forcing him to consider new list: the $1 million club, for retirees who will collect seven-figure pensions during their lifetime.

    ”We have a police chief who will pull in $5 million in California (before he dies),” he said.
    But in the end, pensions are about power. Elected officials from local and state governments maintain power by doling out favors and perks, and there is no perk like a pension.

    Next week, Tom will be our guide as we delve more deeply into particularly egregious forms of pension loopholes, such as a county sheriff who retired in 1999 but still holds his six-figure-salaried office, the judge with 11 state jobs and the convicted mayor with the $125,000 pension and multiple other sources of state income.
    Just cut and paste ... but the article speaks for itself, I think.
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  2. #2
    Senior Member YardleyLabs's Avatar
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    The politics of pensions, particularly for teachers and uniformed forces, has always been crazy. When dinosaurs roamed the earth and I was working in the budget office in NYC, our pension costs for these groups averaged more than 45% of compensation and the real number should have been higher. The pensions were never part of the negotiated collective bargaining agreements and they were not set by the City. Instead, the pensions were set by a Republican controlled legislature over the opposition of the City which was forced to pay the bill with no state assistance.

    Almost none of the teachers or uniformed workers actually lived in the City. They lived in the surrounding suburban counties. Those legislators allied with upstate legislators to impose pension agreements on the City that were far in excess of what was allowed anywhere else in the state. It was not unusual for uniformed forces to begin working with the City following high school, work for 25 years, and retire with a net annual paycheck exceeding the average of their final three years of employment. The actual calculation was based on the final year of pay including overtime, and those in their last year were given lots and lots of overtime. in addition to lifetime medical benefits. The average retiree was under 50. We had good people in thise jobs, but not that good.

  3. #3
    Senior Member Uncle Bill's Avatar
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    Your omniscience has no boundries.OF COURSE it was a REPUBLICAN legislature controlling NEW YORK STATE.

    "Instead, the pensions were set by a Republican controlled legislature over the opposition of the City which was forced to pay the bill with no state assistance."

    About the only shred of believability in this post would be that the elephants were in control during the dinosauer era.

    But beyond that, just read what you are wanting us to believe. You are railing against BIG government setting up unfunded mandates, and in the current era, you are supporting Obamacare.

    And you wonder why you come across hypocritical! Is there no end to your wishy-washy belief values?

    Just like Obama, eventually your ilk will come to realize you are just the epitome of the snake oil salesman, and they will become bored with your flowery prose, and recognize it as just another attempt to baffle them with your bullcrap.

    UB
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  4. #4
    Senior Member YardleyLabs's Avatar
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    Quote Originally Posted by Uncle Bill View Post
    Your omniscience has no boundries.OF COURSE it was a REPUBLICAN legislature controlling NEW YORK STATE.

    "Instead, the pensions were set by a Republican controlled legislature over the opposition of the City which was forced to pay the bill with no state assistance."

    About the only shred of believability in this post would be that the elephants were in control during the dinosauer era.

    But beyond that, just read what you are wanting us to believe. You are railing against BIG government setting up unfunded mandates, and in the current era, you are supporting Obamacare.

    And you wonder why you come across hypocritical! Is there no end to your wishy-washy belief values?

    Just like Obama, eventually your ilk will come to realize you are just the epitome of the snake oil salesman, and they will become bored with your flowery prose, and recognize it as just another attempt to baffle them with your bullcrap.

    UB
    The fact that the legislature was controlled by Republicans at that time was a statement of fact, not ideology, and it had a lot to do with why those actions were taken. At that time, NYC generated almost 80% of all state tax revenues and was a net subsidizer of the upstate regions. At least with Obamacare, the taxes and spending cuts needed to finance the program were made part of the bill.

    It seems you prefer the Republican approach of cutting taxes, increasing spending and borrowing the difference. That was the policy under Reagan and the policy under the younger Bush. The older Bush rejected that approach, made an effort to actually pay our bills, and was rejected by his own party as a result.

    I actually have no issue with spending cuts. My brief career in government was as part of the team that helped bring NYC out of bankruptcy. I directed thousands of layoffs, and did a large number of them face to face. I closed hospitals and met directly with the communities and workers affected. It is not pretty, it is not fun, and it has massive, life changing effects on everyone involved. Unfortunately, sometimes it is needed.

    However, the purveyors of bullcrap are those who pretend that there is somehow a free lunch and that all problems can be fixed without pain if only the unworthy are thrown off the free ride. The reality is that there will be lots of pain, and the primary job losses will be in the private sector and the military, because that is where most government money goes today.

    I believe that the government should not do anything that expands our deficit further, including over turning the Bush tax increases next year (remember, he was the one that demanded those increases), unless the full cost is paid simultaneously with spending cuts. No more cutting taxes now and complaining about spending later. That is how we got here to begin with.

  5. #5
    Senior Member Tim Thomas's Avatar
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    All this crap sets a tone that is not the standard Country wide. Certainly there may be pockets of departments that resemble the suggestion, but these type of extravagant #'s are not the rule. As an example, I work for Houston Fire Department whose pension is currently 95% funded and extremely sound. After 35 years (4 more until retirement) as an officer, I'll leave with @$5500 a month pension. That’s after putting 8+ % in for my entire career. If anyone thinks this is extreme for the time spent and job done, you're delusional....not to mention the average lifespan of a firefighter is 58 (last I heard).
    Also, the issues of pensions and benefits are typically voted in and supported by the Dem's....I should know, our Dept. always encourages us to vote that way....crazy!
    Last edited by Tim Thomas; 11-13-2010 at 01:19 PM.
    You cannot multiply wealth by dividing it

  6. #6
    Senior Member Uncle Bill's Avatar
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    "and the primary job losses will be in the private sector and the military, because that is where most government money goes today"

    Really??? The governmental unions are void from any responsibility in all this indebtedness? The pension programs of all the political yahoos don't have any responsibility?

    It's sad for me that I won't be around here long enough to gloat after you Soros/Obama apologists have run this nation into the ground. But I am hoping to hold out for the elimination of your pathetic man-child from the POTUS. By whom you ask? Any conservative with a heartbeat would do better than what you enablers have allowed to run the country.

    The next two years will be quite a barometer of things to come. If you are blind to the facts that the tax cutting WAS the reason for the high employment, which brought in far more tax money than a tax hike ever would, then for your sake, I hope all the idiots in congress continue along the path of high taxes, that will send the country into a complete depression, and will doom the entire Democrat party to what your simple-minded liberals in the press were contemplating was about to happen to the Republicans a couple years ago.

    Why would any business want to hire on lots of employees with the cloud of impossible costs for all those government mandates staring them in the face? How stupid must the believers in this Obama idea that $250,000 is the benchmark over which draconian taxes will be levied, and those companys will bend over and grab their ankles? Are you all nuts???

    Since I'm not part of that equation anymore, I hope you succeed. Then, like so many voters in this recent election realized, they had been sold a bill of goods with zero value. Only after you have shot down every chance for a recovery, will you begin to see the folly of your ignorance. At that time, I hope there are enough real Americans still standing that will force all the liberal/socialists to eat crow, or move in with Reid and Pelosi. That part of the USA is beyond redemption.

    UB
    When the one you love becomes a memory, that memory becomes a treasure.

  7. #7
    Senior Member helencalif's Avatar
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    "Double Dipping". About 12 years ago an acquaintance of mine took early retirement and "retired" from the sheriff's department with a pension.

    Within a week, he was back working as a vacation or sick-time fill in at the county jail being paid at the same salary level.

    Helen

  8. #8
    Senior Member Tim Thomas's Avatar
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    Quote:
    Another common pension abuse is “double-dipping” – a practice in which employees retire and start collecting their pension, then are rehired to perform their old job at their old salary. It’s a common practice for government workers around the country, despite many rules forbidding it. Workers often argue that they have earned their pension and their right to retire, and if they decide to work during retirement, they're entitled. But the logic there is deeply flawed, said Dean.

    "Pensions were designed to make sure government workers were allowed to grow old with dignity, not to make them rich," he said.


    This is just another example of twisting the truth....the fact is, when one enters this type of deferred retirement program they no longer increase their % of salary determining the monthly pension check.....(their pension check amount ceases to increase, with the exception of cola's) The city also no longer deposits their contribution into the fund. In reality the city gets (in my case) the expertise from an employee necessary to train/guide younger employees in what are typically dangerous circumstances while not incurring the contribution costs. This reduces the number of employees cities must contribute for to the fund. The negative to this is two fold...one issue pertaining to our department, typically the firefighter attempts to remain longer than they normally would, alot of the time not living to enjoy his/her efforts. The other (not a problem with Houston) is pensions underfunded needing bailouts from the city.
    You cannot multiply wealth by dividing it

  9. #9
    Senior Member Tim Thomas's Avatar
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    Quote Originally Posted by helencalif View Post
    "Double Dipping". About 12 years ago an acquaintance of mine took early retirement and "retired" from the sheriff's department with a pension.

    Within a week, he was back working as a vacation or sick-time fill in at the county jail being paid at the same salary level.

    Helen
    There are loads of instances where one retires from one job and goes to work for someone else....what you're leaving out is I'd bet (as with my circumstances) he no longer increases his pension nor can he start another with his department. Your suggestion would seem to be that anyone that retires from a career should go sit on a porch or load up a travel trailer and cease to contribute to the workforce. I don't know about your circumstances, but what I've seen from this generations work ethic...quoting Jack Nicholson, " you need me on that wall ".
    You cannot multiply wealth by dividing it

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    Senior Member dnf777's Avatar
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    The Pittsburgh Post Gazette ran an expose (don't know how to put the accent over the e) on abuse of pensions. Pittsburgh, like many cities, is facing a looming pension crisis, with no real solution in sight.

    The article showed how Port Authority (the bus service) employees would preferentially give extra routes and overtime to drivers in their last year of employment, to boost their salary, and hence, their pension calculations. Several retired with pensions greater than any annual salary they ever earned, excepting for that last year. They were well into 100,000+ range.

    Unfortunately, you can't take away ex post facto, so all we can hope to do is curtail this behavior in the future. The ones who got away with it, are still getting away.

    BTW, Jeff, you're sounding like a fiscally responsible conservative, with that cut-tax and spend liberal, UB arguing your budget actions, wanting to drive up deficits more and more just like his heroes, Reagan and Bush II.
    God Bless PFC Jamie Harkness. The US Army's newest PFC, but still our neighbor's little girl!

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