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Public-employee pensions:

 1 Wicked 223, Mon, 18th Jun '12 10:23:00 AM from Death Star in the forest
Recently, I stumbled across this article by Fareed Zakaria, which argues that the ballooning costs of public pensions are, in Warren Buffet's words, "the single biggest threat to the U.S.'s fiscal health." I also stumbled across this article by Dean Baker.

The arithmetic behind the numbers, is a little beyond me, but I know that public-employee pension reform was a big reason for the recall election called against Walker, and I know that Andrew Cuomo's pension reform attempts are rather unpopular with the public-employee unions in my state.

So, what do you think? do public-employee pensions need reform?
You can't even write racist abuse in excrement on somebody's car without the politically correct brigade jumping down your throat!
 2 Barkey, Mon, 18th Jun '12 11:47:13 AM from Bunker 051 Relationship Status: [TOP SECRET]
War Profiteer
I wouldn't mind reform if they grandfathered all existing public employees, eroding benefits already promised to people is wrong. It's one reason why when someone even breathes a word about touching military pensions we kick, scream, and allude to a possible coup. We were promised those things when we came in.
The AR-15 is responsible for 95% of all deaths each year. The rest of the deaths are from obesity and drone strikes.
 3 Fighteer, Mon, 18th Jun '12 11:51:27 AM from the Time Vortex Relationship Status: Dancing with Captain Jack Harkness
The problem with public employee pensions, as it says in the article, is not that the concept is fundamentally flawed, but that in many cases they are being administered fraudulently. Pensions are supposed to be a "pay in now, get paid later" arrangement, but when the salaries are gamed in such a way as to make the employee pay in far less than they stand to get in benefits — such as by padding their final year's salary to an astronomical level — the system collapses.

There are also cases of people retiring to a pension and then taking a "contractor" or other position to earn extra money, often by doing nothing. This is called "double-dipping", and is illegal, but people have found ways to evade it.

This is the sort of thing that drives Tea Party style hatred towards governments.

We must reform the system, and I'm afraid that some of those reforms will have to be made retroactively. For example, keying an employee's pension benefits to the net amount paid in over the life of the plan rather than their final year's salary.

It also doesn't help that public and private sector jobs have such radically different benefit structures. Ideally they would be equivalent.

edited 18th Jun '12 11:53:17 AM by Fighteer

Ironically, the pursuit of the definition of happiness does not appear to be a happiness-maximizing behavior.
 4 Inverurie Jones, Mon, 18th Jun '12 11:51:58 AM from Station 78 Relationship Status: And they all lived happily ever after <3
'80s TV Action Hero
The press love to bleat about 'gold-plated civil service pensions'. The reality, of course, being that most civil service pensions have been rendered next to worthless by inflation by the time they are claimed. I could make more than what mine will be by buying a bike and delivering newspapers, for crying out load.
'Our hope's with you, rider in the blue.'

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 5 Enkufka, Mon, 18th Jun '12 11:51:59 AM from Bay of White fish
Wandering Student ಠ_ಠ
The thing with Walker was that he basically had people contribute (more?) to their pensions out of their own pockets, so people had less take-home money for getting the exact same thing as before.

But I'm not certain about that.

edited 18th Jun '12 11:53:04 AM by Enkufka

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 6 Wicked 223, Mon, 18th Jun '12 12:32:01 PM from Death Star in the forest
The press love to bleat about 'gold-plated civil service pensions'

oh god, don't even remind me. The New York Post has been running a bunch of inane exposèe's about public employees who get pensions they think are too big for months now, and it's just aaaagh
You can't even write racist abuse in excrement on somebody's car without the politically correct brigade jumping down your throat!
 7 Fighteer, Mon, 18th Jun '12 12:36:53 PM from the Time Vortex Relationship Status: Dancing with Captain Jack Harkness
While their CEO's get multi-million dollar salary packages. That is hypocritical.

[down] That, too.

edited 18th Jun '12 12:49:44 PM by Fighteer

Ironically, the pursuit of the definition of happiness does not appear to be a happiness-maximizing behavior.
[up][up] what I love is how they leap on public pensions instead of people realizing maybe private pensions need to suck less.
Going Forth!
There's still private pensions? ;)

 10 Fighteer, Mon, 18th Jun '12 1:24:37 PM from the Time Vortex Relationship Status: Dancing with Captain Jack Harkness
My company had them as recently as... 2008? 2009? Something like that. I still get the part that I paid into while the program was active.
Ironically, the pursuit of the definition of happiness does not appear to be a happiness-maximizing behavior.
 11 Barkey, Mon, 18th Jun '12 1:58:58 PM from Bunker 051 Relationship Status: [TOP SECRET]
War Profiteer
There are also cases of people retiring to a pension and then taking a "contractor" or other position to earn extra money, often by doing nothing. This is called "double-dipping", and is illegal, but people have found ways to evade it.

It isn't illegal in the US, it's an extremely common practice in the public sector.

Go to any military base and look for all the civilian oontractors who have technical jobs. Almost all of them retired from the military and then got in as a civil servant or contractor. Though given, it isn't necessarily their choice. There's a limit for how long you can stay in. So if you do 25 years in the military and have no choice but to retire as an E-9 or something, why not let them get hired for a contracting position? They have the skills.
The AR-15 is responsible for 95% of all deaths each year. The rest of the deaths are from obesity and drone strikes.
 12 Greenmantle, Mon, 18th Jun '12 2:42:59 PM from Albion Relationship Status: [TOP SECRET]
It isn't illegal in the US, it's an extremely common practice in the public sector.

And in the Private Sector too — where do you think ex-Managers go after they've retired or moved on?

Anyhow, should Pension Schemes be taxed? Gordon Brown introduced a tax soon after he arrived as Chancellor — back then there were a lot of "Final Salary" Pension schemes, but now there are vitually none in the Private Sector, and they're disappearing in the Public Sector too. That is of course, if one will actually get a Pension, or even if they do have a Pension, they'll have to work 'till they die*.
I don't see why it must be so complicated.

How about we make a law that says pensions must actually be run like pensions? Woo done.

 14 Greenmantle, Mon, 18th Jun '12 3:05:59 PM from Albion Relationship Status: [TOP SECRET]
[up]

How about we make a law that says pensions must actually be run like pensions?

I don't know if anyone has realised this, but guess what some of the largest Corporate Investors are?

Pension Funds.
 15 Inverurie Jones, Mon, 18th Jun '12 3:20:52 PM from Station 78 Relationship Status: And they all lived happily ever after <3
'80s TV Action Hero
To be honest, sticking your money in a savings account (with a credit union, not a fucking bank) makes more sense than a pension.
'Our hope's with you, rider in the blue.'

'...Day and night, they're always firemen.
 16 Morven, Mon, 18th Jun '12 4:28:24 PM from Seattle, WA, USA
Nemesis
A problem with pensions in general is that they're very vulnerable to financial shenanigans. The payouts are generally far in the future when promised, and management and politicians are essentially short-termist; they won't be around when the promises come due, so the temptations to promise more than can be delivered, and to under-prepare for the eventual obligations, are both strong.

There have been numerous instances in the private sector of companies looting their pension funds in secret to prop up their books. This is generally illegal, but it still happens. Public-sector pensions are generally (and shockingly) less-regulated than private ones, and politicians tend to be a little more corrupt when it comes to these things as well. Thus, the problems of over-promising and under-provisioning are rife in public sector pension schemes.

This is made worse of late by the fact that so many places assumed that their investments would yield a guaranteed 8% return on average over the medium term. Evidence has piled up that this is not possible in the current economy, and in fact the pressure to obtain such results placed on money managers have a lot to do with the financial problems of the last twenty years.

They're largely responsible for the technology stocks boom in the 1990s and the 2000-ish crash, and they're also responsible in general for the financial industry taking more and more risks from the 1990s onward, with a huge rush of pension and retirement savings income chasing returns that they could no longer get safely — but the financial sector is great at convincing itself it's found new ways to get outsize returns without increasing risk. There is no such thing. Thus, the tendency towards derivatives and other exotic financial instruments, and the boom of mortgage-backed securities etc. And we all know where THAT ended up.
A brighter future for a darker age.
 17 Greenmantle, Mon, 18th Jun '12 11:17:55 PM from Albion Relationship Status: [TOP SECRET]
[up]

This is made worse of late by the fact that so many places assumed that their investments would yield a guaranteed 8% return on average over the medium term. Evidence has piled up that this is not possible in the current economy, and in fact the pressure to obtain such results placed on money managers have a lot to do with the financial problems of the last twenty years.

The situation isn't helped by the large numbers of "Baby Boomers" due to retire within the next twenty-thirty years and fewer people to contribute to their Pensions. It certainly increased the pressure on Fund Managers to increase returns, whatever it took to get the returns that were guaranteed.
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Total posts: 17
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