I'm not a big fan of pensions to begin with and think that places that offer pensions should eventually move to a defined contribution plans.

That aside, I've just recently started learning about gov pensions. Why the hell are we the taxpayers forced to pay for such lucrative gov pension plans? Some of them sound pretty sweet if you ask me. Work 20 years, then retire at 40 and receive 80-90% of salary while you pick up another job. A more comperable private sector benefit would be 66% of final three year salary after 30 years of service.

2/25/2007 9:45:13 PM

Yeah it's bullshit.

But public employee unions have a lot of money and power. With a Dem-controlled congress, you can expect things to get worse, not better.

2/25/2007 9:48:10 PM

even more bs, I believe that all senators get their full salary for life. Not bad, esp if you dont get reelected.

2/25/2007 9:49:45 PM

i have no problem with government employees receiving pensions, i mean a career of service to the country i feel deserves a fitting rewards

2/25/2007 9:54:06 PM

The taxpayers aren't "forced" to pay anything. Often public organizations tend to favor pension/retirement systems over salary to attract and retain employees. Governments have to attract people too, or do you believe public employees couldn't do other things?

2/25/2007 9:59:20 PM

Quote :

"a career of service to the country i feel deserves a fitting rewards"

Since when is 20 years a career?

2/25/2007 10:05:52 PM

Quote :

"Governments have to attract people too, or do you believe public employees couldn't do other things?"

I've read your post several times now Mark and I still can't seem to understand the point which you are attempting to convey.

2/25/2007 10:21:29 PM

Quote :

"Work 20 years, then retire at 40 and receive 80-90% of salary while you pick up another job."

Wow, where is that? In NC, you can retire after 30 years of service and get ~55% of your highest salary.

Also, to say that taxpayers pay for them is misleading. Sure, taxpayer money is contributed to the plan, just like the employees contribution. But without the pension, they would have to pay out that money anyway as salary. As long as the pension plan is well funded and invested, it isn't too big of a liability to taxpayers.

Quote :

"I believe that all senators get their full salary for life. Not bad, esp if you dont get reelected."

http://www.c-span.org/questions/weekly68.htm

I assume you mean US Senators? The only scenario where that is true is if they are over 62.

Quote :

"Members who have participated in the congressional pension system are vested after 5 years of service. A full pension is available to Members 62 years of age with 5 years of service; 50 years or older with 20 years of service; or 25 years of service at any age. A reduced pension is available depending upon which of several different age/service options is chosen. If Members leave Congress before reaching retirement age, they may leave their contributions behind and receive a deferred pension later. How much they receive depends on a complicated formula based on when they joined Congress, how old they are at the time of retirement, how many years of service they had at the time of retirement (including previous military or other federal service), their salary, and which pension option they chose when they enrolled. In any case, a Member's pension amount may not exceed 80% of his/her salary upon retirement. "

[Edited on February 25, 2007 at 10:38 PM. Reason : ?]

2/25/2007 10:24:56 PM

^^My point is that basic economics dictates that public organizations offer salary and benefits for many of the same reasons private businesses do: to attract and retain employees

Also, most retirment plans I'm aware of provide reduced benefits at 20 years.

2/25/2007 10:34:07 PM

Quote :

"Wow, where is that?"

I believe most military pensions are similiar to this.

2/25/2007 10:34:21 PM

Quote :

"My point is that basic economics dictates that public organizations offer salary and benefits for many of the same reasons private businesses do: to attract and retain employees"

I'm not very attracted to a company with a pension. You still don't seem to be addressing the point in my original post, the difference between the two pensions.

2/25/2007 10:35:55 PM

Quote :

"I believe most military pensions are similiar to this."

Wait, so they should serve in the military until they are 65?

Quote :

"Officers may receive an immediate pension on discharge once they have completed 16 years’ reckonable service from the age of 21. Soldiers may receive an immediate pension on discharge once they have completed 22 years’ reckonable service from the age of 18. The level of pension in both cases would represent approximately 30% of the salary for the rank of the individual officer or soldier."

So where is this 90% of salary with 20 years pension?

2/25/2007 10:42:12 PM

The Congressional Pension formula is:

Avg3yrHighSalary * .017 * #yrsofservice(1st 20 yrs) + Avg3yrHighSalary * .01 * #yrsofservice(>20)

So a senator with 6 years that is over 62 years of age would get 10.2% of his salary.

http://www.senate.gov/reference/resources/pdf/RL30631.pdf

[Edited on February 25, 2007 at 10:52 PM. Reason : ?]

2/25/2007 10:51:04 PM

Quote :

"Wait, so they should serve in the military until they are 65?"

I specifically said 30 years in my original post. From where did you get 65?

Quote :

"But without the pension, they would have to pay out that money anyway as salary."

I never said get rid of their pension. I just said make them work 30 years for it like most other pensioned jobs.

The stat 80-90% was given to me by someone I was having a discussion with who was trying to tell me pensions are much better than defined contribution plans. Maybe he exhagurated. Like I said, I just recently started learning about gov pensions. Also, just add a new post next time since I missed your last edit.

2/25/2007 10:51:30 PM

You might want to learn more before posting. I don't think paying out 30% to a soldier who has served for 22 years is very "sweet."

I'm still waiting to see a pension plan that is an affront to tax payers.

[Edited on February 25, 2007 at 10:56 PM. Reason : ?]

2/25/2007 10:55:00 PM

I'll check tomorrow to see from where he got those #s.

Considering I'll get 0% after 22 years, 30% seems pretty "sweet" to me.

2/25/2007 10:57:08 PM

You don't think we have any responsibility for people who serve in our armed services? Or are we simply paying them the market rate for their lives? Surely recruitment wouldn't suffer? Surely they can find high paying jobs?

Don't act so put out. I'm sure the military will take you. Then you can get your sweet pension.

[Edited on February 25, 2007 at 11:05 PM. Reason : ?]

2/25/2007 11:00:33 PM

Quote :

"You don't think we have any responsibility for people who serve in our armed services?"

I work on computer programs the army uses. Where's my pension?

Quote :

"Surely recruitment wouldn't suffer?"

They'll always be naive high schoolers that will sign up or people looking for college money.

[Edited on February 25, 2007 at 11:11 PM. Reason : ]

2/25/2007 11:05:08 PM

Quote :

"Why the hell are we the taxpayers forced to pay for such lucrative gov pension plans? "

Because we are more interested in Anna Nicole Smith than what our politicians are up to. They can only get away with what we let them.


There should be no go'vt pension for any elected politician. We need to discourage people from becoming lifers in Congress. Go and serve a few years and then go back to real life.

2/25/2007 11:20:52 PM

Quote :

"Since when is 20 years a career?"

well i mean 20 years is a good chunk of someone's life, i think that can be considered a career. especially when it's spent in service to this country. i agree completely with defined contribution plans, but i just feel that since civilians receive so little pay in proportion to the time and service they put in, they deserve a strong pension for retirement

[Edited on February 26, 2007 at 12:57 AM. Reason : jank]

2/26/2007 12:57:08 AM

Quote :

" I'm not very attracted to a company with a pension. You still don't seem to be addressing the point in my original post, the difference between the two pensions."

Quote :

"Considering I'll get 0% after 22 years, 30% seems pretty "sweet" to me."

I see. You are just bitching because you chose a job with no pension plan. If you want to have a real debate, you need to convince me that you aren't whining out of ignorance, basic economics and business be damned. You can start by understanding that salary and benefits (including employer contribution) are both part of the cost of employee compensation. Whining about how "unjust" it is that one job contributes a bigger percentage to pension than your job is pretty silly.

You haven't cited any examples of public employees being grossly overcompensated. Until than, Patman wins this thread.

Quote :

"Don't act so put out. I'm sure the military will take you. Then you can get your sweet pension."

2/26/2007 6:37:03 AM

Quote :

"You are just bitching because you chose a job with no pension plan."

I'm not sure why you'd post this directly after quoting me saying I dislike pension plans. I do however like the idea of retireing after putting in 20 years.

Quote :

"If you want to have a real debate, you need to convince me that you aren't whining out of ignorance, basic economics and business be damned."

I don't have a pension, so I don't really give a damn. But imagine if you have to work 30 years for a pension while this other group of gov employees have to work 20 years. Kind of unfair, don't you think?

Quote :

"Whining about how "unjust" it is that one job contributes a bigger percentage to pension than your job is pretty silly."

I was whining about how I think the 20 year pensions are too lucrative. My job compensates me just fine, but I hate to think about all the taxes taken out given to guys who retired after a mere 20 years of service.

Quote :

"You haven't cited any examples of public employees being grossly overcompensated. Until than, Patman wins this thread."

This is soap box. The thread was made to discuss the issue. You can't "win" the thread. Sorry if the other guy I was debating gave me false information. I guess I'll go back to that thread and tell him "I win" since he lied about his #s.

2/26/2007 6:45:00 AM

Quote :

"but I hate to think about all the taxes taken out given to guys who retired after a mere 20 years of service."

1) Military guys pay taxes, too.

2) You've obviously never been in the military.

3) I couldn't give you specific numbers, but I'd venture to guess that the number of military retirees is fairly small compared to the number of people who serve.

4) Who the fuck pissed in your cereal?

2/26/2007 7:30:56 AM

1) Military guys pay taxes, too.
Don't many of they get tax breaks or receive some type of non taxable income?

2) You've obviously never been in the military.
Duh.

3) I couldn't give you specific numbers, but I'd venture to guess that the number of military retirees is fairly small compared to the number of people who serve.
Good point.

4) Who the fuck pissed in your cereal?
I'm having yogurt for breakfast.

2/26/2007 8:12:34 AM

Quote :

"I'm still waiting to see a pension plan that is an affront to tax payers."

These government pensions are underfunded just like private pensions. Who do you think is going to pick up the tab?

The 80-90% was gotten from a guy with a pension through the state of CA, but it wasn't calpers.

[Edited on February 26, 2007 at 8:22 AM. Reason : ]

2/26/2007 8:18:10 AM

Quote :

"But imagine if you have to work 30 years for a pension while this other group of gov employees have to work 20 years. Kind of unfair, don't you think?"

Certainly. But the only example brought forth so far is for military personnel, which is a much different situation.

Quote :

"but I hate to think about all the taxes taken out given to guys who retired after a mere 20 years of service."

Again, this is misleading. You act like they are paying pension benefits out of the general fund. The taxpayers contributions to pensions isn't much much different than a 401k. If we replaced the pension with a 401k, the taxpayers contribution to the pension would end up going into 401k matches. Additional tax payer money would be necessary to raise pay to compete with the private sector.

In the end, pensions probably save the tax payers money.

2/26/2007 8:30:47 AM

Quote :

"These government pensions are underfunded just like private pensions. Who do you think is going to pick up the tab? "

Don't make such sweeping statements. Some are, some aren't. I've seen estimates that the federal pensions are underfunded by $4T. That's infuriating, but is just a symptom of a larger problem in our federal gov't. The liability is created by underfunding, not by the pension. Write your Congressmen and tell them to quit spending money they don't have.

Here in NC, where our gov't is forced to pay as it goes, the pensions are well funded.

Quote :

" The 80-90% was gotten from a guy with a pension through the state of CA, but it wasn't calpers. "

That sounds like an exaggeration, even for CA. Regardless, I'll leave CA's pensions to her tax payers.

[Edited on February 26, 2007 at 8:40 AM. Reason : ?]

2/26/2007 8:40:19 AM

Here's the article I mentioned earlier.

http://www.signonsandiego.com/uniontrib/20070211/news_lz1ed11top.html

2/26/2007 8:45:14 AM

I missed where you mentioned it, but that wasn't really a case of absurd pensions, it was double dipping and they've closed the loophole.

2/26/2007 8:50:42 AM

It was mainly about double dipping, but it also mentioned that 90% I referred to earlier and someone requested a source, so here it is.

2/26/2007 8:52:32 AM

This site describes how the military pensions work:

http://www.dod.mil/militarypay/retirement/ad/01_whichsystem.html

So get that 90% stuff out. The max percentage one can get is 75%, but that is only after 30 years on active duty. Which is a hell of a lot of service.

2/26/2007 9:14:31 AM

Did you read the link I posted above?

Besides, the thread is about gov pensions, not specifically military pensions.

2/26/2007 9:25:52 AM

To the original post:

What they get in retirement they would get in salary at a private place of work. So, if we eliminate these benefits, we'll have to pay the employees more, and there will be no incentive for employees to stick around.

2/26/2007 9:29:11 AM

Quote :

"It was mainly about double dipping, but it also mentioned that 90% I referred to earlier and someone requested a source, so here it is."

Yeah, it did mention 90%...in the context of double dipping...double dipping that they are doing away with.

I get it now.

Well, it must be difficult for them to find public employees in San Diego.

Maybe San Diego is a place that's particularly expensive for retired people? LOL

[Edited on February 26, 2007 at 9:39 AM. Reason : You should move there and get the hook-up!]

2/26/2007 9:33:42 AM

Quote :

"So, if we eliminate these benefits"

I never said eliminate these benefits. Just make them equal to similiar positions in the private sector.

2/26/2007 9:42:21 AM

^And make salary equal as well?

Cause salary is the problem.

(Also, I didn't realize there were that many people in the private sector doing 30 years at the same employer.)

2/26/2007 9:57:38 AM

A lot of the baby boomers with pensions worked 30 years with the same employer.

2/26/2007 10:12:13 AM

Pensions work out poorly for everyone.

Better to push for a higher salary sans-pension, invest your own damn money.

2/26/2007 11:02:09 AM

I don't know enough about California government to comment specifically about the pension of local firefighters in San Diego, but I can think of some general reasons why one would offer generous pensions. Perhaps there is fierce competition for the particular job skill in that region, forcing the city to make a more generous compensation package. This is true in particular for cities surrounded by large numbers of smaller suburban governments, where the number of skilled is small to begin with, and the best police and firefighters are being poached all the time. Think of it this way: you may be pissed that they're getting paid so much in theory, but if its your fire district that is only staffed at 50% because not enough people want to become firefighters and the few who do are going to work for your neighboring suburb, then you may start understanding how this situation could come about. Sometimes the unions may have a lockdown and can force the government into giving it compensations. Plenty of other possibilities as well.

With the Federal government, you need to offer a good pension and strong job security to help recruit the best talent for civil service. At the national level, the government is not able to offer the sort of lavish salaries that private industry is going to be able to provide, particularly for the highly skilled and highly educated fields such as medicine, law, and engineering, and they can't simply rely upon the altruism and nobility of service to fill 100% of their manpower needs. So the government does what it can to leverage the advantages they do have to counter a raw salary and posh offices: long term security. You also need to provide incentives to stick around and endure the neverending suffering known as the Federal bureaucracy.

2/26/2007 11:13:42 AM

Quote :

"Pensions work out poorly for everyone."

I would argue that the one exception is the government, particular state and Federal government pensions. If the government is in a position where it can no longer pay for your pension, then you and every other citizen probably has greater things to worry about than whether your check is in the mail.

2/26/2007 11:15:31 AM

Ah, California. Are you aware that California has such attractive pension systems because many years ago (coincidentally when many baby boomers were starting their careers), many California state and local governments (elected representatives of their taxpayers) didn't want to fork out the increased salary needed to keep up with the fast-rising cost of living...and chose to provide attractive pension plans instead? A classic choice of don't pay now, pay later. Those obligations are now becoming due.

I will not argue that California has an attractive pension system. My point is that you can't eliminate the pension systems, provide the same (lower) salaries, and expect to attract and retain qualified employees. You can't have it both ways.

2/26/2007 11:33:15 AM

Quote :

"You also need to provide incentives to stick around and endure the neverending suffering known as the Federal bureaucracy. "

If no one stuck around then there would not be a Federal bureaucracy

2/26/2007 11:47:42 AM

^^Exactly. Work for the government is inherently unattractive; it almost always pays lower than comparable work in the private sector. The only reason it attracts anyone is that it compensates for low pay with high benefits, like good pensions.

Which one do you think is going to cost you more: high pensions for the employees that work 20 or 30 years (which is certainly not all of them), or higher salaries for all of the employees?

[Edited on February 26, 2007 at 11:52 AM. Reason : ]

2/26/2007 11:52:13 AM

Quote :

"even more bs, I believe that all senators get their full salary for life. Not bad, esp if you dont get reelected."

I'll decline that if/when I get elected to the Senate.

Quote :

"I never said get rid of their pension. I just said make them work 30 years for it like most other pensioned jobs."

force structuring. don't need that many people who are that senior, especially in the more physical jobs that would be tough to do for 30 years. you could transition them to another job, but you'd be better off letting someone more junior and up & coming do it for less money (and with a greater future in it).

Quote :

"Don't many of they get tax breaks or receive some type of non taxable income?"

Your pay in the military is composed of several components. I'd say that, on average, about 3/4 of it is taxable. The only tax breaks I'm aware of are the ability to shop at the PX/commissary and stuff, and a lot of times that's not really cheaper than Wal-Mart/online ordering (well, your pay is tax free when you're deployed).

Quote :

" The max percentage one can get is 75%, but that is only after 30 years on active duty."

and that's only 75% of your base pay (not housing allowance, subsistance allowance, or flight/submarine/etc pay).

2/26/2007 1:35:17 PM

Quote :

"Which one do you think is going to cost you more: high pensions for the employees that work 20 or 30 years (which is certainly not all of them), or higher salaries for all of the employees?"

Ha ha ha. In the long run high salaries cost less.

Look at what the politicians are doing; instead of taxing or borrowing the cash now to pay competitive wages they promise to tax or borrow the money from future generations to pay a pension. This way, they can provide more government services (whatever those are) and cut taxes at the same time. Sure, after 20 or so years taxes will need to go up to cover the promised pensions, but by then the politicians in question will have retired, so it won't be their problem.

Well then, why do many private sector employers provide pensions? Well, there it made some sense. In the age before tax-free retirement accounts pensions were used as a form of income tax avoidance. I could pay you $10,000 more a year now and you'll lose 40% to income taxes, or I could give it to you after you retire; and since it will be your total income you'll only pay 20%. Plus, this cash not paid in salary is funnelled into the company hopefully earning a return.

2/26/2007 2:20:29 PM

Quote :

"Look at what the politicians are doing; instead of taxing or borrowing the cash now to pay competitive wages they promise to tax or borrow the money from future generations to pay a pension. This way, they can provide more government services (whatever those are) and cut taxes at the same time. Sure, after 20 or so years taxes will need to go up to cover the promised pensions, but by then the politicians in question will have retired, so it won't be their problem."

Obviously, underfunded pensions are expensive to future generations. But if you properly fund the pension, you don't have those problems, and you have a powerful recruiting and retention tool that allows you to pay below market wages.

This is a symptom of bad administration and policy, not pensions.

[Edited on February 26, 2007 at 2:53 PM. Reason : ?]

2/26/2007 2:51:40 PM