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A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

nytimes.com

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Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#71

Post by ubernostrum »

rayiner wrote: post #22
rootusrootus wrote: post #3

My mom is a PERS retiree. Not one of the rich ones, though she did retire at the perfect moment and she has a livable retirement income. One thing a lot of people (who do not work in gov't) don't recall is that while the economy was roaring back then, Oregonians working for the gov't went for years without so much as a cost of living adjustment. Some of the perks they got from PERS were in lieu of getting a raise. So…

For the most part, government work does not pay poorly.[1] For example federal employees without advanced degrees earn a lot more in government than in the private sector: https://www.google.com/amp/s/www.washingtonpost.com/amphtml/... [1] I’m willing to entertain the idea our economic system as a whole undercompensates secretaries and overcompensates executives. That’s a different issue.

Mentioning federal employees in a discussion of state/local employees is an apples-to-oranges comparison.

Please provide sources to counter the assertion that state/local employees often get large pensions in lieu of salary.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#73

Post by ubernostrum »

travoc wrote: post #24
toomuchtodo wrote: post #13

Earlier quoted context omitted.

It should be noted that Illinois’ republican govenor ran on pension reform, then to everyone’s shagrin, attempted to break unions. He made no headway on either issue, and is now running against a billionaire Democratic challenger who is expected to win.

It’s impossible to reform pensions without reducing government union power in states like California and Illinois.

It's impossible to reform pensions without paying private-sector market rate to state and local employees.

"Unsustainable" pensions are a politician's way of punting the issue -- rather than hit the budget today by paying market rate, they promise far above market rate later on when some other sucker is in office. And everybody -- including the people whose taxes will end up paying for it -- falls for this over and over and over.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#75

Post by dominotw »

ubernostrum wrote: post #71
rayiner wrote: post #22

Earlier quoted context omitted.

For the most part, government work does not pay poorly.[1] For example federal employees without advanced degrees earn a lot more in government than in the private sector: https://www.google.com/amp/s/www.washingtonpost.com/amphtml/... [1] I’m willing to entertain the idea our economic system as a whole undercompensates secretaries and overcompensates executives. That’s a different issue.

Mentioning federal employees in a discussion of state/local employees is an apples-to-oranges comparison. Please provide sources to counter the assertion that state/local employees often get large pensions in lieu of salary.

That assertion makes sense if quality of candidates drops when pension is removed. We don't know exactly why ppl are choosing govt jobs. My wife choose it because it offers 9-5, no overtime.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#76

Post by rayiner »

jaggederest wrote: post #58

I mean, the obvious solution is to move to purely defined-contribution plans and haircut the existing people down to actual returns on invested balance for them. But I have to imagine in a lot of cases that would lead to people being impoverished later in life, which is not especially humane.

Lots of people are in tough financial circumstances. Preserving public pensions means keeping formerly middle class people from facing hardship at the expense of the people who were always impoverished.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#77

Post by cc439 »

rdl wrote: post #48
tantalor wrote: post #18

Earlier quoted context omitted.

Borrowing from the future is not a good strategy.

Borrowing from the future is an excellent strategy in a lot of cases, you just need to explicit that you're doing so and make sure it makes sense.

It's an excellent strategy (when executed correctly) in times of unparalleled stability and economic predictability like those of 1948 to ~1976 and ~1982-2008 but it's a terrible strategy when returns on pension fund investments are virtually guaranteed. Even in those times it didn't make logical sense to assume everything over the next 30 years would play out exactly how everyone assumed it would. That and the "stickiness" problem of new pensions being based off the terms of old pensions (negotiated when retirees didn't live into their mid 80's on average) is what will doom most state governments over the next 10-15 years,

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#78

Post by ubernostrum »

dominotw wrote: post #75
ubernostrum wrote: post #71

Earlier quoted context omitted.

Mentioning federal employees in a discussion of state/local employees is an apples-to-oranges comparison. Please provide sources to counter the assertion that state/local employees often get large pensions in lieu of salary.

That assertion makes sense if quality of candidates drops when pension is removed. We don't know exactly why ppl are choosing govt jobs. My wife choose it because it offers 9-5, no overtime.

If your wife was a sole earner without a spouse's income to supplement her household, would she be as willing to accept low wages now in exchange for a high pension later?

Or would she look for a job that pays enough to cover her cost of living today, since that's a prerequisite to reaching the pension age?

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#79

Post by saosebastiao »

rdl wrote: post #48
tantalor wrote: post #18

Earlier quoted context omitted.

Borrowing from the future is not a good strategy.

Borrowing from the future is an excellent strategy in a lot of cases, you just need to explicit that you're doing so and make sure it makes sense.

No, it's never a good strategy when the person paying the bill isn't even close to the same generation of the person receiving the benefit. That's a recipe for disaster, for every party involved.

Re: A $76,000 Monthly Pension: Why States and Cities Are Short on Cash

#80

Post by adventured »

qmalzp wrote: post #7
megaman22 wrote: post #5

Well, cutting the top out of this seems like the obvious solution. Pants-on-head to give an Oregon coach who's been funded by Nike to collect a multimillion pension.

It does seem reasonable that there would be a cap, but I wonder how much cutting the pensions of a few thousand highly paid retirees will impact the budget.

There is another key point to fixing the absurd top N% of pensions that are receiving large payouts: maybe it won't save the budget, however those funds can go toward paying for more pensions (eg in the bottom 50%) with the same capital outlay. The $100,000 you shave off a spiked pension at the top, might pay for four lower level pensions. In these types of scenarios, 5% and 10% optimizations are a big deal over the long-haul.
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