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The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

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Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#231

Post by wang_li »

xeromal wrote: post #48
spullara wrote: post #22

Earlier quoted context omitted.

You could increase the taxes on pensions to return them to sane levels.

I feel wary of doing this because I feel this is what's going to happen with my IRAs. I was promised that if I pay my taxes now I don't have to pay them when I'm old, but supposed the next generation decides they want to change the rules. Do I just pound sand and give up? Pensioners were given a promise and now we're changing the rules. It feels wrong even if the promise was unrealistic.

> Pensioners were given a promise and now we're changing the rules.

There is a slight difference between the two situations you describe. That being that the promises being made to the unions were not being done by disinterested parties. Public services unions are notorious for being some of the largest donors to state and local candidates. The negotiators on the management side of the table are deeply beholden to the unions and have no personal interest in paying the obligations they are agreeing to, it's all put on the tax payer.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#232

Post by wang_li »

ghein wrote: post #180
NTDF9 wrote: post #17

Earlier quoted context omitted.

The government doesn't keep its promises because it is not required by law that they are held accountable for dubious lawmaking. Put simply, representatives need to be on a personal financial hook (or penalty) for laws, rules and policies, even after they've exited office.

A major problem is that this is a case of I'll be gone, you'll be gone. The union leaders and the politicians - typically in their 50 to 70s - who made the promises will be dead by the time the 25 year old new hires try to collect their pensions at 55 or 65. The incentives are all sorts of screwed up and it's very difficult to create a healthy set of constraints for this kind of bargaining.

> ... create a healthy set of constraints for this kind of bargaining.

They should simply put the burden of new obligations (debt or pension guarantees) on individuals rather than on the city. If you live in a municipality when they take on a bond for a stadium, or agree to pension payments, then you pay those debts regardless of where you have moved to. Or put the obligations on property, so people have an interest in not burdening themselves or their investments.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#233

Post by landryraccoon »

betterunix2 wrote: post #127
ngngngng wrote: post #113

Earlier quoted context omitted.

Does stability in retirement add enough value to society and the economy for it to be a good investment? I've been an adult less than a decade, so without a return why should I pay for the promises of my predecessors? So many questions.

I actually think the answer is simpler and more immediate than that. The government made a promise. If the government does not keep that promise, can it be trusted with other obligations? In fact, this problem of unfunded pensions has impacted municipal credit ratings and wound up costing taxpayers more in higher interest rates than they would have had to pay in higher taxes to stabilize the pension funds.

> The government made a promise. If the government does not keep that promise, can it be trusted with other obligations?

This is way too absolute and simplistic. Past governments can make bad policy. Past governments can be corrupt or make decisions based on personal interest against the public or incomplete or bad information at the time. The obligation of future governments has to be balanced with whether the past government instituted good policy or not.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#234

Post by sykhic »

mistermann wrote: post #213
sykhic wrote: post #205

Earlier quoted context omitted.

I don't think I can. I gave an example of how people speak colloquially. For instance, one can mention Christianity in a discussion but that term means different things to different people. People will say things like, "Christians believe this..." without it being literally true. Most people speak colloquially and not in a technical sense. The phrase "Ayn Randian paradise" does not imply the sort of paradise envision…

> It's a reference to a belief commonly held by people who nominally agree with Ayn Rand's view as they understand it to be. I asked a question specifically about that above, see: (b) Is asking for substantiation of a claim, an insulting claim at that, now considered improper etiquette around these parts? Ask yourself this: how do you know this to be true? Can you share where you've encountered Randians in sufficient…

As with most beliefs my belief about "Ayn Randians" comes from anecdotal experience. I can't cite a study or source. Just going by my experience with such people.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#235

Post by Spooky23 »

jdhn wrote: post #227
randysavage wrote: post #194

Earlier quoted context omitted.

Many also retire young. My firefighter buddy will retire well before his 50th birthday and collect >$100k/yr in a relatively low COL state. He's in good shape, physically and mentally. He could easily live to 90, no problem. Good for him, but not great for taxpayers.

>My firefighter buddy will retire well before his 50th birthday and collect >$100k/yr How is this possible? The state that he lives in hasn't changed the rules for vesting/collection? That seems like an absurd amount of money for what I'm assuming is a career that's lasted less than 30 years.

Most public safety people can retire at half pay with 20 years, and it goes up year by year, usually capping at 60-70% of the average salaries of the last 3-5 years. Many contracts don't cap overtime with respect to pension calculations.

If you join at 18, at 50 you'll have 32 years, which in many departments means seniority to get alot of overtime. It's a decision that the municipality makes -- they understaff to preserve cash and dump the longer-term problem on the bigger pension fund.

The early retirement is important, as the life expectancy for police/fire drops significantly based on retirement age. But the polices re: overtime as it impacts pensions are often too generous. These issues are "fixed" for normal employees in most places -- for example in NY non-public safety employees and teachers have caps (~10%) on how much your salary can increase for pension purposes and either eliminate or cap how overtime applies.

My wife worked for a public employer who had a way to let overtime go into an optional 401k-type plan at a higher rate so that blue collar employees would have an easier time retiring on time. (Many blue collar folks basically depend on OT)

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#236

Post by mistermann »

sykhic wrote: post #234
mistermann wrote: post #213

Earlier quoted context omitted.

> It's a reference to a belief commonly held by people who nominally agree with Ayn Rand's view as they understand it to be. I asked a question specifically about that above, see: (b) Is asking for substantiation of a claim, an insulting claim at that, now considered improper etiquette around these parts? Ask yourself this: how do you know this to be true? Can you share where you've encountered Randians in sufficient…

As with most beliefs my belief about "Ayn Randians" comes from anecdotal experience. I can't cite a study or source. Just going by my experience with such people.

Some beliefs are based on facts, others on anecdotal experience, sometimes the difference matters and should not be left ambiguous (in case you were wondering where my determination comes from).

Thank you for the courtesy.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#237

Post by IIPA_Master »

Your taxes do NOT fund most pensions.

I’m a teacher in NY. My pension plan is self funded by our membership (teachers). Taxpayer dollars account for the annual school budget (you vote on!) which does include salary and employer healthcare contribution however it also pays for grounds and buildings, transportation, extracurriculars, etc...

Additionally, the current tier 6 of NY state workers pays a “retirement fee” into their retirement which is how the TRS in NY is funded. This fee is not a % of salary, it is an annual fee spread over pay periods.

So just to debunk one point, most public worker retirement funds are self funded by members.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#238

Post by scaryspooky »

IIPA_Master wrote: post #237

Your taxes do NOT fund most pensions. I’m a teacher in NY. My pension plan is self funded by our membership (teachers). Taxpayer dollars account for the annual school budget (you vote on!) which does include salary and employer healthcare contribution however it also pays for grounds and buildings, transportation, extracurriculars, etc... Additionally, the current tier 6 of NY state workers pays a “retirement fee” in…

Public employees are paid via taxes, so yes they do 'fund' public pensions.

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#239

Post by dang »

justaman wrote: post #96
rgcapozz wrote: post #28

Earlier quoted context omitted.

As I get older I become more anarchist or socialist or syndicalist.

[flagged]

Please don't post unsubstantive comments here. Or ideological battle comments.

https://news.ycombinator.com/newsguidelines.html

Re: The Pension Hole for U.S. Cities and States Is the Size of Japan’s Economy

#240

Post by ethicsengineer »

xeromal wrote: post #48
spullara wrote: post #22

Earlier quoted context omitted.

You could increase the taxes on pensions to return them to sane levels.

I feel wary of doing this because I feel this is what's going to happen with my IRAs. I was promised that if I pay my taxes now I don't have to pay them when I'm old, but supposed the next generation decides they want to change the rules. Do I just pound sand and give up? Pensioners were given a promise and now we're changing the rules. It feels wrong even if the promise was unrealistic.

Pensioners voted for free money at a cost to future generations, unsurprisingly future generations we're not interested in giving greedy old timers free money.
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