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

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

#221

Post by charleslmunger » Sun, Apr 15, 2018, 3:24 PM UTC

ethbro wrote: post #137

charleslmunger wrote: post #39

Earlier quoted context omitted.

In addition, it's not necessarily salary of the last year - it's income from the state. Which, until a few years ago, included overtime and unused sick/vacation days. The incentives were totally crazy - cities and counties paid salaries up front, but the state generally paid pensions. So it was common practice to divert all overtime to employees who were going to retire that year, to spike their income and get them a…

Public sector pensions should be run by a Federal Reserve-like "appointed but not elected" system. As you've stated, actuarial calculations + short term politics don't mix.

Even then, the risk of overly rosy prediction of returns by bureaucrats is high. A defined contribution system, plus a social safety net (medicare, social security, etc) is a better system.

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

#222

Post by jacquesc » Sun, Apr 15, 2018, 3:27 PM UTC

mythrwy wrote: post #179

home_boi wrote: post #151

What's the chances of retroactively lowering pensions? 1. Progressively lower pensions. Skim off the top earners. 2. Create projects for the community and declare that the saved money will be used for those projects for better optics. This won't lower trust in government pensions by that much because this is just correcting what is seen as "unfairly high" pensions.

Here's the other option. Pay the promised pensions and inflate them away. Since this is a growing national problem, I'm guessing that solution has at least been considered.

Not politically feasible. Older citizens tend to both have a lot of savings, and vote. They would not allow this to happen.

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

#223

Post by tostitos1979 » Sun, Apr 15, 2018, 3:28 PM UTC

ddjfaegjhc wrote: post #128

bob_theslob646 wrote: post #21

Earlier quoted context omitted.

How is it possible that they can retire on 90% of their peak pay? It seems that it's based off of years of service instead of quality of service... Since the longer you work I assume the higher you get paid.

Even worse, it includes overtime comp, so they can do a year of crazy OT, earn a lot extra that year, then retire with that year as a basis.

How is this not a scam?

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

#224

Post by whb07 » Sun, Apr 15, 2018, 3:33 PM UTC

danmaz74 wrote: post #165

DoreenMichele wrote: post #148

Earlier quoted context omitted.

I'm not aware of one and your question touches on some of the hidden forms of compensation that can be hard to measure (and can vary over time for the same person -- for example, we were sometimes in housing on base and sometimes not). The below examples are off the top of my head from memory as a military spouse and may be very out of date. The military will cover 75% of tuition for active duty members. Most states…

> military spouses have high unemployment rates because locals don't want to hire them May I ask why? Because they know you're going to move soon, or any other reasons?

From my point of view is that they are also well maintained. Imagine being a young spouse and your military spouse is earning more than enough to keep Both of you happy. Why pursue something outside of Netflix and chill? That and if a deployment comes around, you can just go back home to your parents house while saving all that money for rent.

source: was AD Marine.

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

#225

Post by DoreenMichele » Sun, Apr 15, 2018, 3:56 PM UTC

danmaz74 wrote: post #189

DoreenMichele wrote: post #167

Earlier quoted context omitted.

Yes, they know you are highly likely to move again soon. But really it should say in part because... The benefits package makes living on one income viable. This contributes to spouses being less motivated to job hunt. Another factor is that frequent moves make it nigh impossible to develop a real career. If you have a serious education and want a professional career, this is largely out of reach for most military sp…

Got it, thanks. I suppose that the kinds of online jobs digital nomads do would be an interesting alternative, but those aren't for everybody.

Digital nomads were not a thing 30 years ago when I was a young military wife.

However, I do digital nomad type work currently. It fits in nicely with the kinds of expectations I have for my life that are rooted in having been a military wife.

There are also times when I wish a regular job was a viable option for me because there are certainly downsides to what I do.

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

#226

Post by DoreenMichele » Sun, Apr 15, 2018, 4:02 PM UTC

scarface74 wrote: post #202

DoreenMichele wrote: post #109

Re the ongoing debate here about government pay (and whether it's high or low): I'm not super familiar with city and state government jobs, but I do know something about military and federal compensation. They frequently pay less in salary, but have better benefits. This makes it an apples to oranges comparison when trying to talk about what they pay in comparison to non government jobs. I was a military wife for a l…

My problem is that the pensions give the government a way of paying employees low and kicking the can down the road where later taxpayers bare the brunt of obligations that they had no say in. Just pay government employees more so taxpayers, the government, and potential employees can all go in knowing the trade offs and let the employees manage their own retirement like everyone else. Of course I don't have a proble…

I don't think you understand why military benefits are the way they are.

And I am not up for writing an opus on it in comments here. Suffice it to say that raising your right hand and swearing to give your life for your country is a little different from your standard job.

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

#227

Post by saosebastiao » Sun, Apr 15, 2018, 4:11 PM UTC

closeparen wrote: post #156

cc439 wrote: post #92

Earlier quoted context omitted.

A dollar can only change hands so many times before it's worthless unless it's going towards actual value-adding goods/services. Considering how deprived the general population is for funds to spend on value-added goods, I don't think taking $6,250 from every person in the state just to support a tiny, tiny fraction of the population is doing much good. That and a large portion of pensioners flee to states without an…

>I don't think taking $6,250 from every person in the state just to support a tiny, tiny fraction of the population is doing much good. The government paying its debts and not committing wage theft is a public good. It's a pivotal decision point in whether we are a functioning civilization with a rule of law or a third-world regime on its way down. It may be convenient in this one isolated instance to renege, but the…

The rule of law should also have something to say about making promises on other people's backs. Why should my generation have to pay just because some previous generation made a promise against my generation's earnings without my generation's consent?

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

#228

Post by conanbatt » Sun, Apr 15, 2018, 4:27 PM UTC

ethbro wrote: post #137

charleslmunger wrote: post #39

Earlier quoted context omitted.

In addition, it's not necessarily salary of the last year - it's income from the state. Which, until a few years ago, included overtime and unused sick/vacation days. The incentives were totally crazy - cities and counties paid salaries up front, but the state generally paid pensions. So it was common practice to divert all overtime to employees who were going to retire that year, to spike their income and get them a…

Public sector pensions should be run by a Federal Reserve-like "appointed but not elected" system. As you've stated, actuarial calculations + short term politics don't mix.

I think the economical argument that is most fundamental is that public benefits are a promise of the states future revenue. It is like a bond with no adjustment to risk.

If people like public pensions let them have it, but let only people in their sector pay for it. It is absolutely immoral for someone to pay a tax to fulfill the promise of a decade old decision on someone else. Few things show how clearly people forget the State doesnt have money of its own than thinking that the state can fulfill an obligation without taking more from the innocent bystanders.

Defined benefit plans should have a defined tax scope, and if they fail, they go bankrupt and thats it.

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

#229

Post by conanbatt » Sun, Apr 15, 2018, 4:28 PM UTC

tostitos1979 wrote: post #223

ddjfaegjhc wrote: post #128

Earlier quoted context omitted.

Even worse, it includes overtime comp, so they can do a year of crazy OT, earn a lot extra that year, then retire with that year as a basis.

How is this not a scam?

Public benefits in general are a scam. They are not funded by the workers tax, its funded by everyones taxes.

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

#230

Post by conanbatt » Sun, Apr 15, 2018, 4:35 PM UTC

PeterStuer wrote: post #154

skookumchuck wrote: post #114

Earlier quoted context omitted.

I don't get this entitlement to retire at 55 or even 50. The retirement age should be 65.

I don't get how in a world where about 10% of the work goes into actually producing nescessities, and all the rest goes into 'make work' or even worse producing things that are health hazards or nearly straight to landfill junk, we still think we need to 'work more/longer/harder'! Our 'productivity' has gone up by at least 2% per year. If you understand compounding you realize how significant that impact is. We're in…

> The notion that 'working longer' is 'needed' as a consequence of anything besides a completely failed and derailed socio-economic model is absurd.

Yes and no. I used to have this same intuition but think that people today, even on the low bracket, have a better life than the previous generations mid-wealthy had. Think how much an iphone would be worth in 1950, and think how many people have it today. It is definitely a great measure of wealth. Look at the internet that has made entertainment virtually free: if you have an internet connection there is no shortage of content ever. And we still produce more content! Who works to produce more content if you could not watch all of youtube right now!

We will turn to idleness only when the benefits we get by further work are less than the value of it. When auto-piloted airplanes with auto-drilled oil and auto-cooks and auto-hotels will make everyone travel a lot more and work less, but maybe at that point we will want to work to get our seat to go to Mars, or the latest art exhibition, or the greatest meal, or better life for your kids.