Conning Study

The Center for Retirement Research at Boston College (CRR) released a report this month on Connecticut’s State Employees Retirement System (SERS) and Teachers’ Retirement System (TRS) pursuant to a grant from the State of Connecticut which included an amazing academic justification for shirking contributions that other states may jump on.

CRR outlines one of the the problems with the Connecticut plans:

Both systems have promised benefits to their members since 1939. But the benefits provided by SERS and TRS were not pre-funded until 1971 and 1982, respectively. Until then, benefits were paid each year from the State’s general revenues. The many years of unfunded benefits accrued over that period saddled both systems with unfunded liabilities that today account for nearly $9.3 billion of the combined $26 billion unfunded liability. The remaining portion of the unfunded liability comes from funding shortfalls – due to inadequate contributions, low investment returns relative to expectations, and negative actuarial experience – after the start dates.

and proposes to:

separately finance – over a long time horizon – the liabilities associated with members hired prior to the pre-funding.

using this silly rationalization:

The two main policy arguments for separately financing the liabilities are intergenerational equity and the perception of benefit costs for current employees. First is intergenerational equity. The majority of members hired prior to pre-funding are now retirees. The unfunded liabilities associated with them were accumulated over multiple generations and the services these members provide are no longer being enjoyed by current generation because the members are now retired. As such, it is not fair, from an intergenerational equity standpoint, to place the entire burden of funding the remaining benefits for these members on a single generation (as under the current plan). A longer time horizon for amortizing these benefits that spreads the costs over multiple generations would be more appropriate. The second argument is the undue burden that the cost of these benefits places on current employees. Today, the unfunded liability for members hired prior to prefunding represent a combined $21.1 billion of SERS’ and TRS’ combined $25.7 billion unfunded liability, while members hired after prefunding represent only $4.6 billion. Combining the pension costs for members hired prior to pre-funding with those for members hired afterward skews the perception of pension benefits for current employees by misrepresenting the pension cost of current employees to the taxpayer.

As if it would be fairer to have taxpayers in 2050 (or 2525) pay for promised benefits that were not funded by what would then be several generations.

There have been several silly ideas advocated by pension ‘experts’ in the employ of politicians:

  • open-amortization periods
  • negative amortization in the early years using level-percentage-of-payroll
  • interest rates averaged over terms long enough to include the triple-digit-inflation expected around 2090

all designed to lower immediate contribution amounts and con taxpayers.  This CCR study adds one more.

71 responses to this post.

  1. Posted by meepbobeep on November 13, 2015 at 4:00 pm

    I’ve not read the full report, but do they ever mention that the “current plan” was never going to get paid anyway?

    It’s kind of silly to complain that one generation shouldn’t pay for past generations, when they never were actually going to do it.

    Reply

    • I read the summary and conclusion and skimmed over the history and charts (full reading comes later today) but initial impression is that this may even lower contributions in the near term depending on how ‘long term horizon’ gets defined which is what CT politicians were looking for from this study.

      If you think about it what CCR is saying is that it is fairer for a taxpayer further removed from the time services were provided to pay for those services than it is for someone who might have actually directly benefited from those services.

      Reply

      • Posted by Pat on November 13, 2015 at 4:52 pm

        Agreed, but if sacrifices have to be made better to do it over a larger population and greater period of time so as to minimize the pain. It beats going “belly up” and throwing grandma out of her house.
        .

        Reply

        • Posted by Tough Love on November 13, 2015 at 7:05 pm

          No it doesn’t. Those (both active and retired) who were promised pensions and benefits greater than they WOULD HAVE BEEN in the absence of the Public Sector Union/Elected Official collusion (to grant but intentionally under-cost EXTREMELY generous pensions & benefits) shold have them REDUCED to the level that likely would have been granted in the absence of that collusion …….. assuredly AT LEAST 50% LOWER.

          Reply

          • Posted by Anonymous on November 13, 2015 at 8:09 pm

            shut up already, nothing new, same old crap

          • Posted by Tough Love on November 14, 2015 at 1:07 pm

            Anon (BH, “The Resident Nutcase”, whoever),

            “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”

            ― Upton Sinclair

      • Posted by meepbobeep on November 13, 2015 at 7:51 pm

        Oh, I agree with you. I’m just tired of hearing “that’s unfair!” when they should know full well that they were never going to let it all hit at once. It was always going to be pushed back to later.

        It would be far more honest if they said “Look, they’re not going to pay this pattern. What’s something that would be sustainable” and forget about the whole “fair” argument.

        Fair’s got nothing to do with pension reform.

        Reply

        • Posted by ~The Resident Nutcase on November 13, 2015 at 8:32 pm

          Yeah. Ok…. And what about alllllllll the current retirees?? Take 1/2 their money away? Tell an employee with 25 yrs… Sorry! Since we never made the proper payments….. You only get 1/2!!??? Lol. Never ever gonna happen.

          Reply

          • Posted by Tough Love on November 13, 2015 at 9:08 pm

            Greed HAS consequences …… any worker/retiree with a brain should have (for at least the past decade) been asking …. how in heck are they going to pay for our outrageously generous pensions & benefits.

            Answer ….they’re not going to.

          • Just like SS benefits are not going to be cut 25 to 30 percent when the mystical “trust fund” runs out. When the cash is gone, it is gone.

      • So sounds like the current pensions will be paid in full just by continuing to kick the can down the road? It all seems silly, just say that there is not enough funding to go round and make reforms.

        Reply

        • Posted by Tough Love on November 14, 2015 at 1:10 pm

          Of course there isn’t (enough money).

          That is why the pension/benefits must be frozen …. as has been proposed by the NJ Pension Commission..

          Reply

  2. Posted by skip3house on November 13, 2015 at 4:31 pm

    Now, we know who the numbers person, answering ‘how much do you want 2+3 to be?’,is working for!

    Reply

  3. Posted by anonymous on November 13, 2015 at 5:59 pm

    Wait where did that quote with the 21.1 million come from? I remembered a much lower number when I read the executive summary and I am seeing that:

    “The many years of unfunded benefits accrued
    over that period saddled both systems with unfunded liabilities that today account for nearly $9.3
    billion of the combined $26 billion unfunded liability”

    Reply

    • Posted by anon on November 13, 2015 at 6:03 pm

      Now I’m confused too as I see that $9.3 billion of $26 billion is from unfunded and then on then a few pages later it says that $21.1 billion of the $25.7 billion is from those hired before funding.

      Is the distinction that $9.3 billion is benefits accrued prior to funding and then another $11.8 million is for benefits accrued after funding started but for members hired before the prefunding started?

      Reply

      • Posted by dentss dunnigan on November 13, 2015 at 6:56 pm

        Yep as I’ve always said …All pensions will be paid …until they can’t be .

        Reply

        • Posted by Tough Love on November 13, 2015 at 7:12 pm

          Just around the corner …in NJ.

          Reply

          • Posted by Anonymous on November 13, 2015 at 8:10 pm

            dream on TL, The feds will cause a massive collapse much sooner, hold on to your teeth.

          • Posted by ~The Resident Nutcase on November 13, 2015 at 8:34 pm

            Loving how TL is literally foaming at the mouth for others to fail because she has nothing and is filled with jealousy!!
            Pension will always be paid. No matter what. For many many many years to come.

          • Posted by Tough Love on November 13, 2015 at 9:02 pm

            Anon (BH ?), What the FEDs are doing (printing money) is really bad, but we’re quite a ways from that causing big problems.

            In contrast, NJ’s pensions are on a short, straight track into the toilet, with State Plans having less than 5 years to go … and with just a few more years for the Local Plans.

            ALL of them need to be frozen (ZERO future growth) and for all CURRENT workers …… as proposed by the NJ pension Commission.
            ————————————————————
            And to the “The Resident Nutcase”,

            I’m not “looking for” (or foaming at the Mouth) for NJ’s Plans to fail. What I am saying is:

            (1) They WILL fail BECAUSE they are grossly excessive, there is not now (and never will be) sufficient money to fully fund these grossly excessive promised pensions & benefits, and our Public Sector Union bought-off Election Officials refuse to VERY materially reduce future service pensions accruals and benefit for all CURRENT workers …….. their being NO OTHER OPTIONS.

            (2) The Current level of pension/benefit promises are grossly excessive, never necessary, just, fair, or affordable, and were BOUGHT from our elected officials with Public Sector Union campaign contributions and election support.

            (3) That they are grossly excessive ….. always MULTIPLES greater in value at retirement than those of Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of service. As a demonstration of such (multiples greater PUBLIC Sector pensions & benefits), see comment #s 95 and 96 (out of the 99 total comments) here:

            https://burypensions.wordpress.com/2015/05/14/its-embarsaing-and-im-tired-of-hearing-this-i-want-what-i-was-promised/#comments

          • Posted by ~The Resident Nutcase on November 13, 2015 at 10:41 pm

            Shame is…..all the anti public haters on here are dead wrong! But I’m tired of wasting my breathe.
            My neighbor is a career firefighter, drives a Toyota, rents one side of a two family with Mexican neighbors…. Doesn’t seem to fit this greedy devilish person you describe. I’m middle class… And in the same boat as he. He’s paying big into his healthcare and pension. He’s struggling just like me and I do ok financially. People like you TL really make me sick!! You try to portray that these are bad people and greedy and corrupt.
            This dude spent time in the military… Complains he has a bachelors degree but gets nothing for it and seems to be a family guy. But people like you spew this venom!!! It’s wrong!! Why is he living next door to me if his career is so frigging lavish? Why is he driving a Toyota if he’s rolling in the dough?? Why do I see him cutting his own grass and not some landscaper if he’s so loaded?? Why do I see him grilling the same burgers on his cheap grill if he’s got so much cash???
            It’s people like you that know nothing but numbers and are filled with hatred and jealousy!!! I bet you are part of the entitlements age group who never had to work for anything!! Yet complain and think everyone should be equal to them because they are the have nots!! People like you suck and are the reason this country is becoming a bunch of whiny little babies. You and your kind will ruin this country far faster than any good you think you’ll bring.
            The state should have made the payments!!! End of story!!

          • Posted by Anonymous on November 13, 2015 at 11:15 pm

            The objective observer would ask, what came first to create this P&B crisis? The UNDERFUNDING or the OVERCOMPENSATION?

            The bias observer just claims it’s one OR the other!

          • Posted by S Moderation Douglas on November 14, 2015 at 1:12 am

          • Posted by Anonymous on November 14, 2015 at 8:19 am

            Blame game shame, political BS!

        • Posted by Anonymous on November 13, 2015 at 9:58 pm

          Like Yogi said, “it ain’t over until it’s over”.

          Reply

      • Posted by anon on November 16, 2015 at 9:52 am

        I was not being philosophical, I was seriously hoping one of you actuary or research types could explain the difference in the $9.3 and the $21.1 numbers.

        Reply

  4. Posted by Anonymous on November 13, 2015 at 9:13 pm

    http://www.nj.com/opinion/index.ssf/2015/11/retired_lifeguards_are_now_helping_drown_atlantic.html#incart_river_mobile_index

    It never ends, time to stop the madness and move forward with the necessary P&B reforms for everyone’s future!

    Reply

    • Posted by ~The Resident Nutcase on November 13, 2015 at 10:47 pm

      Goof!! Go back and re read that stupid article and you’ll see it’s wrong. The numbers don’t add up!! But hey, you wonder why most families set up on the beach right next to a lifeguard stand??? It’s so their kids are safe in the water you moron!!!! Lifeguards get compensated as they should!!! Like the pensions of 100 lifeguards are the cause of Atlantic cities problems!!! You’re another hater and an idiot!
      Get rid of all lifeguards and swim at your own risk then…. The world could use a lot less idiots due to drowning!!!

      Reply

      • Posted by skip3house on November 13, 2015 at 11:18 pm

        “…..The state should have made the payments!!! End of story!!…..”
        Best line, now concentrate on why payments were not made, instead of this infighting serving only the elite/politicians.
        Plenty of money, but in the hands of a few. Why?

        Reply

      • Posted by Tough Love on November 14, 2015 at 2:25 am

        Thank goodness you’ve kept that new handle BH (i.e., “The Resident Nutcase”). With each new post, you prove it’s so true.

        Reply

        • Posted by ~The Resident Nutcase on November 14, 2015 at 10:40 am

          Paranoid much???
          I don’t post under the anon tag….. And by my assessments… Given the difference of opinion and writing style…. Anon is 4 different people.
          By makes no difference if you think it’s me….. I agree with 3 of the 4!!

          Reply

      • Yeah – get rid of them and get rid of most of the firehouses too. Let people assume responsibility for themselves.

        Reply

  5. Posted by Anonymous on November 14, 2015 at 10:02 am

    Crash and burn, then we’ll learn?

    Reply

  6. SMD Love the Hillary Clinton post! Perfect and too funny 🙂

    Reply

  7. Posted by Anonymous on November 14, 2015 at 10:10 pm

    Hey John,

    Curious how the Feds P&B compare to NJ based on the links I’ve located (at bottom of post). I know it’s difficult to compare but it seems like their DBP is less generous (~45% for regular workers and ? for special workers), with a higher penalty, and a graduated age for “early” retirement. However they also have a TSP with a 5% (3% @100% then 2% at 50%) employer (taxpayer) match. Uncertain what if any employees’ contribute towards their DBP?

    High option health coverage appears to be a notch below NJ Direct 10/15 and with level active and retired premium share (not graduated based on income).

    Let’s remove TSP for comparison sake, although the additional 5% employer contribution isn’t insignificant. Considering the Feds more robust ability to fund their P&B, larger tax base and the ability to print money (I’ve contemplated doing so but I don’t like the food on the inside – LOL), how can any State reasonably justify the ability to fund their P&B at a level higher than the Feds. And IF, that’s a big IF, the Feds were to provide some sort of assistance to Governmental pension funds at a minimum they would require participating States to reform their P&B to be no greater than what’s provided at the Fed level.

    Omitted from this scenario are the salaries at the Federal versus lower Governmental level.

    https://m.geha.com/plans-and-benefits/premiums

    https://www.opm.gov//healthcare/enrollment/new-federal-employee-enrollment/

    Reply

    • Posted by Tough Love on November 14, 2015 at 10:40 pm

      The FERS DB Plan pays 1% (of 3-year Avg pay) per year of service.

      In addition there is a DC Plan similar to a 401K. I don’t know if or how much the gov’t contributes to this Plan.

      ———————-

      That’s a great deal MORE than what the typical Private Sector worker gets (rarely more than a 3%-4% of pay match” into a 401K Plan), but a great deal LESS than what the typical State or Local Public Sector worker gets.

      So a question …….. WHY are State and Local DB Plans often 2x that of the Federal Plan for non-safety workers and 3x greater for safety workers ?

      WHY? Because their Unions have bribed our self-interested, contribution-soliciting, vote-selling, taxpayer-betraying Elected Officials (with campaign contributions and election support) to grant the GROSSLY EXCESSIVE, unnecessary, unjust, unfair, and unaffordable Plans that are in place today …. and strangling the finances of Americas States, Cities and Towns.

      ___________________

      It’s WAY past time to freeze ALL of these Plans for the Future service of all CURRENT Public Sector workers.
      ——————————-

      P.S. Your question SHOULDN’T be …..

      “how can any State reasonably justify the ability to fund their P&B at a level higher than the Feds.”

      but SHOULD be ……….

      “how can any States reasonably justify their MUCH richer P&B promises than those granted by the States.”

      Reply

      • Posted by Tough Love on November 14, 2015 at 10:44 pm

        Correction …. the LAST word above “States”, should be “Federal Government”

        Reply

      • Posted by Anonymous on November 14, 2015 at 10:58 pm

        The point I didn’t make was the Fed 1% versus NJ’s 1.8% is ~45% greater benefit accrual. It would be hard to argue, although I’m sure the Unions would try, using the Feds, minus the TSP, as NJ’s P&B reform blueprint? Not sure if the Feds standard option health coverage equates to “gold” coverage, probably a gold plus? Or give employees the one time option to opt out of the new DBP and into a DCP.

        Reply

        • Posted by Tough Love on November 15, 2015 at 12:18 am

          One of the MOST egregious (i.e., EXTREMELY rich, and hence EXTREMELY costly) pensions in NJ are for Police Officers who can retire after 25 years of service with 65% of final pay. Thats 0.65 / 25 = 2.6% per year of service.

          Per a Federal FERS online “calculator”, a Federal Law Enforcement Officer retiring at age 55 with 25 years of service would get 39 % of pay or 0.39 / 25 = 1.56% per year of service.

          There is ZERO justification for the MUCH greater NJ Police Officer pensions.

          Reply

          • Posted by S Moderation Douglas on November 15, 2015 at 8:38 pm

            Ah, “the other man’s grass.”

            Or as Erma Bombeck said, “The Grass Is Always Greener over the Septic Tank”

            “Federal Law Enforcement Officer retiring at age 55 with 25 years of service would get 39 % of pay..”

            is, as you might suspect, only the beginning.

            As Paul Harvey says, “the rest of the story” is that Federal officers contribute only 1.3 percent of salary to FERS (how much do NJ police contribute?)

            Federal Officers, like all other fed employees are eligible for up to 5 percent employer match in the defined contribution plan (as I recall, there is an automatic 1 percent employer contribution even if the employee has NO match.)

            Federal Officers, unlike most NJ officers, do contribute to and receive Social Security.

            And, since Fed LEOs have mandatory retirement at 57, there is a subsidy to augment their pension until they reach Social security retirement age.

            Except February, which has 28.

        • Posted by Tough Love on November 15, 2015 at 3:04 am

          Actually, ….. 1% versus NJ’s 1.8% … is a 1.8/1.0 = a “multiple” of 1.8 times, or 80% greater (not 45% greater).

          Reply

          • Posted by Anonymous on November 15, 2015 at 8:43 am

            Correct, wrong explanation on my post. The point I was trying to make was NJ’s benefit accrual (TPAF & PERS) needs to be cut by 45% to match the Feds. Which is very close to the 50% benefit accrual reduction you’ve previously mentioned. Actually with the increased “early” retirement age and penalty it’s probably right at 50% (guessing)?

            I know you like to draw a public versus private comparison but it might be more beneficial to compare NJ to the Feds? It’s really hard to argue a govt. to govt. comparison even if it’s Feds versus lower govt.?

          • Posted by Anonymous on November 15, 2015 at 9:24 am

            I’m not suggesting your private to public P&B comparison isn’t relevant. However, in my opinion, the general public and union members could put NJ’s current P&B structure into better perspective when compared to the Feds?

            Again probably a (1%) chance the Feds get involved with State and Local pensions but if they did there’s no way it would be at NJ’s current P&B level or other States for that matter.

            A couple of unknowns;

            Do the Feds provide a COLA, if so is it like SS?

            Do the Feds pay their “employer” share into SS and do you they fund their Fed pension on pay as you go?

            Do NJ’s first responders pay into SS, is it mandatory or optional?

            We really need to get all the impartial, unadulturated facts out there for everyone to see and hopefully understand!

          • Posted by S Moderation Douglas on November 15, 2015 at 12:03 pm

            According to the Cato Institute, federal workers make 78% more than private workers. It’s a lie, of course, but I thought you might want to know.

            “Since the 1990s, federal workers have enjoyed faster compensation growth than private-sector workers. In 2014 federal workers earned 78 percent more, on average, than private-sector workers. Federal workers earned 43 percent more, on average, than state and local government workers. The federal government has become an elite island of secure and high-paid employment, separated from the ocean of average Americans competing in the economy.”

            Unadulterated facts is in the eye of the beholder.

            (The “real” federal advantage is said to be 17%. Don’t take that to the bank either.)

          • Posted by Anonymous on November 15, 2015 at 12:17 pm

            Thanks SMD and certainly compensation comparison is a valid point that impacts pensions and their cost.

            But wouldn’t you say my suggestive approach is well “moderate”. As with everything it’s a matter of and subject to opinions.

          • Posted by S Moderation Douglas on November 15, 2015 at 1:15 pm

            I would agree that …..if…… the federal government got involved, by way of guarantees, for instance, there should be conditions attached.

            New Jersey and Illinois, and others, I think, are too big to fail. (The Teamsters’ Central States pension fund is also too big to fail, I don’t know how we deal with that.) Some people cheering for the collapse of entire pension systems might be less sanguine when they find themselves buried under rubble.

            There were those who cheered when California instituted it’s three day per month furloughs in 2009. Then some of the private sector businesses and workers were less enthusiastic when they learned the hard way that their livelihood depends on those same workers, who now have fifteen percent less money to spend.

            Marypat’s page seems to be having technical difficulties. I was looking for her recent quote about “fair” when it comes to pensions. (They are not.)

            But, be careful what you wish for.

          • Posted by S Moderation Douglas on November 15, 2015 at 2:08 pm

            More and more, I like the idea for public sector workers of limiting pensions to $100,000 or less. At first, when PEPRA limited the income on which pensions were calculated to $109,000 (or the same limit as SS), I thought that didn’t make sense because, as all the studies showed, cherry picked or not, these were typically the public workers who were already under compensated. Now we’re under compensating more.

            However, these huge pensions are apparently the ones causing the greatest outcry and envy. And it does make sense that a pension, for anyone, should be just enough to provide a median income; basic food and shelter. Say $60,000 a year, tops. Anyone who makes more than that can save outside the pension system to boost their retirement income to 80% if they so desire. There is no way around it, though; the cash salaries of most of the highest level employees will have to be increased. MATERIALLY increased, as ‘you know who’ would say, by as much as 50%.

            Disclosure: S Moderation’s pension is less than $60,000 a year. Just a coincidence.

          • Finally, a modest step toward a practical solution, not hurting the lower half of public workers in NJ…..!

          • Posted by Tough Love on November 15, 2015 at 3:13 pm

            Quoting SMD …. “I like the idea for public sector workers of limiting pensions to $100,000 or less.”

            Much “fairer” to change the Public Sector per-year-of-service “formula-factors” and the pension “provisions” (e.g. age at which you can retire w/o an early retirement reduction, and whether or no pensions are COLA-increased) to be roughly EQUAL to those of their Private Sector counterparts …… for ALL income levels, and for the future service of all CURRENT workers.

            And agreed ….. all adjusted for demonstrable differences in cash pay.

            Public Sector workers are NOT deserving of a better deal than those they (supposedly) work for.

  8. …and accounting for ability to save even more from higher discretionary incomes.

    Reply

    • Posted by Anonymous on November 15, 2015 at 7:20 pm

      Clearly the conflicting sources are as infinite as this topic’s opinions. We need to agree to disagree and move onto a solution, now.

      I’d propose to NJ’s political decision makers the following (applicable for TPAF & PERS);

      – effective immediately reduce future pension accrual to 1.175%, an approximate 35% reduction, with the revised age and penalty restrictions possibly an approximate 40% reduction (?).
      – effective immediately implement the Feds age and penalty restrictions, unless the 2011 reforms are more restrictive (sorry I forget the legislshare details).
      – I believe the 2011 reforms addressed this but if not, effective immediately cap pensionable wages at SS max.
      – effective immediately cap max pension allowance at, for argument sake, SMD’s $100k or some other amount.
      – change current health coverage to the Feds “standard coverage” with their corresponding premium share unless current premium share is higher. If NJ maintains the income based premium share then it would need to be adjusted to realize the total amount under the Feds flat rate premium share. The above changes would apply to all retirees. All changes would become effective next open enrollment unless a special open enrollment is held.
      – float a constitutional amendment outlining all of the above changes and a dedicated funding source for the unfunded liability as well as the revised normal cost going forward.
      -allow a small (6 month) grace period for individuals to retire or the new changes apply to them. This would probably result in a significant number of individuals retiring which might pose staffing concerns.

      Implement, on a percentage basis relative to current P&B, similar changes for other pension funds.

      There’s no perfect solution but hopefully we can agree the status quo is unacceptable.

      Reply

  9. Posted by S Moderation Douglas on November 15, 2015 at 3:51 pm

    And, oh! the irony!

    Jack Dean seems obsessed with retirees playing golf.

    Even as we speak, in California, there is a retired superintendent of schools with a pension over $300,000 a year. He retired after a 49 year career and by most accounts was an excellent administrator. I don’t know, or care, if he plays golf.

    There is a janitor, possibly from that school district, who has a pension of $39,000. (Years of service unknown, TransparentCalifornia shows only four janitors statewide with pensions over $30,000.)

    By all economic studies, the janitor is the one who is compensated more than his private sector peer. For all I know, he may be an avid golfer.

    For the sake of the janitor, and all those who follow him, I hope California continues the Defined Benefit pensions.

    And in the future, Superintendents in Californian will be limited to pensions around $100,000, adjusted for inflation. Almost certainly their cash wages will increase to compensate for the lower pension.

    Reply

    • Posted by Tough Love on November 15, 2015 at 3:58 pm

      Sorry, but the Public Sector janitor is entitled to no more than the Private Sector janitor ….. with social services support available for BOTH where appropriate.

      Reply

  10. Posted by S Moderation Douglas on November 15, 2015 at 7:11 pm

    Sorry, but you may be in the minority. Most people concerned about pensions in general are concerned about the mega pensions. No surprise really, it’s been the main theme of propaganda attacks for the last decade.

    There’s really not much stomach for reducing the pensions of those who are already the lowest. You’re welcome to take that proposal to Trenton or Springfield, maybe Hartford. Politically it’s not feasible. Also not logical, in spite of your insistence. Even the Central States Teamsters are proposing cuts averaging 23%, with some at 50% or more, but are not touching those at the lowest level. It may not be fair in your book, but it is so. Most people aren’t enthusiastic about cutting pensions barely above subsistence.

    Some pension reform advocates like Ed Ring and Mark Glennon, and (maybe) Andrew Biggs have proposed, if defined benefits remain, that they should be progressive, ala Social Security. Higher paid workers would receive pensions smaller in relation to their salaries than those at the lower levels. First of all, that’s somewhat surprising, since that is basically income redistribution, which I thought was taboo to conservatives. Second, if redistribution in the name of fairness is their goal, I would think they would be pleased to note that at the lowest level, compensation is twenty percent above the private sector, and at the higher level, compensation is twenty percent less. (According to my cherry picked studies.) If that ain’t redistribution, I don’t know what is.

    Reply

    • Posted by Tough Love on November 15, 2015 at 8:14 pm

      Quoting SMD …”Most people concerned about pensions in general are concerned about the mega pensions”

      Baloney …… only true for those easily led-by-the-nose (and hoodwinked) by Public Sector Union/worker/retiree misinformation and propaganda. While the giant and large pensions garner the most “attention”, they add up to very small share of the MASSIVE pension mess spreading across America. The misinformation campaign to re-direct attention away from the ROOT CAUSE of the problem ….. grossly excessive Public Sector pension & benefit promises …… continues unabated.

      Public Sector pensions are FORMULA-DRIVEN and ALL of them (when compared to the retirement benefits TYPICALLY granted Private Sector workers) are grossly excessive …. at ALL salary levels. ….. ROUTINELY 3x-4x (4x-6x for Safety workers) greater in value upon retirement than those of COMPARABLE Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of service.

      Again, I direct attention to my mathematical DEMONSTRATION of the grossly excessive nature of ALL Public Sector pensions ….. MULTIPLES greater than their Private Sector counterparts. See the 95-th and 96-th comments (of the 99 comments) to an earlier John Bury Blog article found here:

      https://burypensions.wordpress.com/2015/05/14/its-embarsaing-and-im-tired-of-hearing-this-i-want-what-i-was-promised/#comments

      Reply

  11. Posted by S Moderation Douglas on November 15, 2015 at 7:20 pm

    Had to bring in Hartford to at least try to stay relevant to the article. Connecticut, by the way, according to Biggs and Richwine, having the distinction of the highest compensated state workers, when compared to the private sector (42% advantage).

    Although I am having more and more doubts about that study.

    Reply

    • Posted by Tough Love on November 15, 2015 at 8:19 pm

      I bet that you’d trust it verbatim if the study stated that PUBLIC Sector worker paid 42% LESS …. no matter than such would be ridiculous.

      Reply

  12. Posted by S Moderation Douglas on November 16, 2015 at 3:31 am

    Moderation is skeptical of any study, like the one cited above from the Cato Institute.

    “In 2014 federal workers earned 78 percent more, on average, than private-sector workers.”

    Carl Sagan said extraordinary claims require extraordinary proof.

    In this case, Andrew Biggs said: “If I were a federal employee, I would push back hard on the 78% headline pay difference number.”

    Moderation says, the second most important thing I learned in the AEI state by state comparison of public pay is how much discretion the researchers have in methodology, which can have a significant effect on the outcome, either inadvertently or intentionally.

    Unadulterated facts is in the eye of the beholder.

    Reply

  13. Posted by Tough Love on November 16, 2015 at 9:10 am

    Considering how many Private Sector workers who hold minimum-wage (and often part time) jobs (e;g. fast-food), I do not find the statement ……….. ““In 2014 federal workers earned 78 percent more, on average, than private-sector workers” …. surprising at all, because few such low-wage/part-time-wage jobs exist in the Federal workforce.

    In that quote, I don’t see the works “private-sector workers” filtered to include only those jobs (or only those with education, experience, and skills) comparable to those held by Federal employees.

    I’m also sure you’re VERY aware of the apples-to-oranges nature of this comparison. But rather than brush it off as such with a brief explanation as to why it is irrelevant (as I just did above), you seem to be harping on it …. as though there is some mileage to be gained (for your agenda to discredit ANYTHING that support greater Public Sector compensation ….. even the properly-conducted studies) by appealing to the few who you can still fool with your misinformation, omissions of pertinent facts, distortions, and lies.

    Reply

  14. Posted by S Moderation Douglas on November 16, 2015 at 1:23 pm

    Moderation is not “harping” on anything, grasshopper.

    Moderation was responding to the statement: “I bet that you’d trust it verbatim if the study stated that PUBLIC Sector worker paid 42% LESS …. no matter than such would be ridiculous.”

    Anonymous earlier in this blog was comparing federal compensation to NJ compensation.
    At 9:24 said “We really need to get all the impartial, unadulturated facts out there for everyone to see and hopefully understand!”

    Moderation reiterates that impartial facts are in the eye of the beholder. There are at least nine recent “studies” on the federal pay gap showing anywhere from a 35 percent negative gap to this 78 percent federal advantage.

    “Got a problem with EQUAL?”

    Yes, how are you going to define or quantify it?

    Reply

    • Posted by Tough Love on November 16, 2015 at 2:54 pm

      Quoting SMD ………….

      “Moderation is not “harping” on anything, grasshopper. Moderation was responding to the statement: “I bet that you’d trust it verbatim if the study stated that PUBLIC Sector worker paid 42% LESS …. no matter than such would be ridiculous.””

      As usual, your full of it. You referenced the Cato study comment …”“In 2014 federal workers earned 78 percent more, on average, than private-sector workers”” twice above (time-stamped November 15, 2015 at 12:03 pm and November 16, 2015 at 3:31 am), the first of which was BEFORE my comment ……. “I bet that you’d trust it verbatim if the study stated that PUBLIC Sector worker paid 42% LESS …. no matter than such would be ridiculous”, which was time-stamped “November 15, 2015 at 8:19 pm”.

      You should be more careful (not to leave evidence) when you make up history.

      Reply

  15. Posted by S Moderation Douglas on November 16, 2015 at 1:57 pm

    “FEDERAL WORKERS EARNING DOUBLE THEIR PRIVATE COUNTERPARTS”

    David Cauchon, USA Today, 8/13/2010
    __________________________________________________________
    “Federal employees on average now earn 35.2 percent less their private-sector peers”

     Kellie LunneyOctober 17, 2014, Government Executive

    ________________________________________________

    “Risher said the Cato report and a more in-depth analysis by the conservative Heritage Foundation suffer from the same problem: the data sets they are using are not designed for the kind of analysis they are trying to conduct. (The Heritage Foundation based its report, which was published July 7, 2010, on data from the Current Population Survey.)

    “Which side is correct? The fact is we truly don’t know,” Risher wrote in August. “Both sides rely on analytical methods that even the most astute economists would have trouble understanding. And neither has detailed job-to-job comparisons to support their arguments.”

    Both sides in great pay debate are misleading the public.

    (From Fact check.org. Are Federal Workers Overpaid?
    By Eugene KielyPosted on December 1, 2010 )

    _______________________________

    Got a problem with EQUAL?

    Reply

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