UPIC (10) 2015 Update

Late last year we ran a series of blogs on Union Plans In Crisis based on Schedule MB actuarial information for 2014 concentrating on (at the time) ten plans that sought to cut benefits under MPRA. There are now five more plans and the 2015 MB data is out so it is time for an update:

These fifteen multiemployer (union) plans that have applied to suspend benefits under MPRA:

91-6123695/001: Alaska Ironworkers Pension Plan IN REVIEW
94-1133245/001: Automotive Industries Pension Fund IN REVIEW
14-6016608/001: Bricklayers and Allied Craftsmen Local 5 Pension WITHDRAWN
34-6666798/001: Bricklayers and Allied Craftsmen Local 7 Pension WITHDRAWN
36-6044243/001: Central States, Southeast & Southwest Areas Pension Plan DENIED
38-6237143/001: Intl Assoc. Of Machinists Motor City Pension Fund IN REVIEW
52-6148924/001: Ironworkers Local 16 Pension Plan DENIED
51-0161467/001: Ironworkers Local 17 Pension Fund APPROVED
13-1917612/001: Local 805 Pension and Retirement Fund IN REVIEW
16-6063585/074: New York State Teamsters Conference Pension Fund WITHDRAWN
51-6106510/001: Road Carriers Local 707 Pension Fund DENIED
31-6127287/001 Southwest Ohio Regional Council of Carpenters Pension Plan IN REVIEW
22-6172237/001: Teamsters Local 469 Pension Fund DENIED
13-5511877/001: United Furniture Workers Pension Fund A IN REVIEW
94-6076144/001: Western State Office and Professional Employees Pension Fund IN REVIEW

When compared to the population of all union plans their situation is not much worse:

The government website from which this data is taken does not provide the plan name in their MB worksheet so here are the spreadsheets sorted by:

 

51 responses to this post.

  1. Posted by Anonymous on May 4, 2017 at 8:15 am

    Thank you for the update very timely

    Reply

  2. Posted by Buzz on May 4, 2017 at 12:05 pm

    Wouldn’t you like to see these pensions audited? How many of these are in the position they are in because they promised more than they could ever have delivered? How many are in the position they are in because of waste and fraud? And how many are in a poor condition merely as a result of poor financial decisions? How is it that many of the pensions run by large corporations are 100 per cent funded?

    A lot of questions here, but few real answers.

    Reply

    • Posted by Anonymous on May 4, 2017 at 1:12 pm

      Actually they are in this mess NOT because of grossly excessive benefit levels …. which is indeed the ROOT CAUSE of the pension mess associated with PUBLIC Sector Plans ….. but because their funding structure was never tied to the Plan’s funding “requirements”, but to a Union/Employer negotiated contribution per hour.

      When you have a rapidly declining workforce, a FIXED contribution per/hr doesn’t work.

      The Gov’t should have never approved a “DB” with such funding arrangements…. absurd from the getgo

      Reply

    • Posted by S Moderation Douglas on May 6, 2017 at 10:55 am

      Many of the pensions run by large corporations are underfunded. And they fit the same pattern as CalPERS and other pension systems. Way overfunded in 2000… dropped like a rock by 2003… back to full funding by 2007… dropped like a rock again, and still recovering.

      http://www.zerohedge.com/news/2016-08-22/top-25-underfunded-corporate-pension-plans-are-225bn-underwater

      Reply

      • Posted by Anonymous on May 6, 2017 at 11:23 am

        SMD, What a load of BS………… the Private Sector mean funding ratio being about 80% using MUCH more conservative valuation assumptions & methodology.

        If Public Sector Plan (INCLUDING CalPERS) were valued using the IDENTICAL assumptions and methodology used by Private Sector Plans VERY FEW would be above the Treasury/IRS funding rate cut-off of 60% below which no further pension accruals can be awarded.

        Reply

        • Posted by S Moderation Douglas on May 6, 2017 at 1:21 pm

          That’s not the point, Love. Despite different methods of valuation, both systems are affected by economic cycles. And both systems are greatly affected by catastrophic market downturns. They fit the same pattern.

          Perhaps, as Buzz stated, “many of the pensions run by large corporations are 100 per cent funded.” because, like NY State, they aggressively backfilled their pension fund immediately following the crash. Painful at first, but (much) cheaper in the long run. It takes money to make money.

          SMH

          Reply

          • Posted by Anonymous on May 6, 2017 at 9:53 pm

            Quoting SMD…..

            “Despite different methods of valuation, both systems are affected by economic cycles.”

            Indeed, which is why when we are at (what many economists believe to be) the peak of an economic cycle, “safe” funding ratios should be closer to 125% using CONSERVATIVE (Private-Sector-required) assumptions, NOT 80% using LIBERAL (i.e, phony Gov’t) assumptions, which Public Sector Plan supporters continue to call for.

          • Posted by Anonymous on May 7, 2017 at 9:04 am

            Really SMD,

            While it may not be the “point” you were trying to make, shrugging-off, and not even challenging my statement that ………………

            “If Public Sector Plan (INCLUDING CalPERS) were valued using the IDENTICAL assumptions and methodology used by Private Sector Plans VERY FEW would be above the Treasury/IRS funding rate cut-off of 60% below which no further pension accruals can be awarded.” ….

            speaks VOLUMES !

  3. Posted by S Moderation Douglas on May 6, 2017 at 11:04 am

    Quoting Tough Love on April 17, 2016 at 7:34 am

    “the undeniable FACT that Taxpayers are unjustly FORCED to provide you with Total Compensation (via pensions & benefits ROUTINELY 3, 4, 5 even 6 times greater in valise upon retirement than those of comparable and similarly situated Private sector workers) FAR greater than necessary, reasonable, just, fair, or affordable.”

    I believe we learned in the case of private sector truckers (average salary $45k – 55k, $4,200 pension @ 60 w/30 years) compared to New Jersey public sector drivers (max salary 48k, $2,556 pension @ 60 w/30 years) ……that “the undeniable FACT”, is in fact, quite deniable after all. Logic would dictate that this is not an isolated example.

    Reply

    • Posted by Anonymous on May 6, 2017 at 11:34 am

      A challenge……. Pick the TYPICAL Private Sector (Large Corporate) DB pension Plan and 2 TYPICAL Public Sector DB pension Plans (1 non-safety, and 1 Safety).

      If you compared long career pensions (using age 60 for non-safety, and age 55 for Safety workers) and compared their pensions to that of a Private Sector worker retiring at that SAME age, and with the SAME wages, and the SAME years of service, YES ……….. the non-safety worker’s pension would TYPICALLY be 3 to 4 times greater in value upon retirement, and the Safety worker’s pension would be 4 to 6 times greater in value upon retirement.
      ******************************************

      And to head-off you sure follow-up ………… this is a PENSION-COMPARISON only, AS WAS my statement that you quoted above between, if read correctly.

      Reply

      • Posted by S Moderation Douglas on May 6, 2017 at 1:34 pm

        “SAME wages”
        “SAME wages”
        “SAME wages”
        “SAME wages”

        non, monsieur

        Same education,
        Same experience,
        Same responsibilities,
        etc., etc., etc.

        Big difference.

        Reply

      • Posted by S Moderation Douglas on May 6, 2017 at 4:59 pm

        Sorry, you cannot have a….. “PENSION-COMPARISON only”

        “In some cases, higher pension benefits may merely
        compensate for salaries those paid to similarly skilled
        private-sector workers.”

        Andrew Biggs

        Reply

  4. Posted by S Moderation Douglas on May 6, 2017 at 11:32 am

    If… “grossly excessive benefit levels “…. are indeed the ROOT CAUSE of the pension mess associated with PUBLIC Sector Plans…

    Then why is New York state, with pay and pensions very similar to New Jersey, now fully funded, while New Jersey is less than 50%?

    http://www.pewtrusts.org/en/research-and-analysis/issue-briefs/2017/04/the-state-pension-funding-gap-2015

    DON’T PAY THE BILLS, THE DEBT GETS LARGER

    Reply

    • Posted by Anonymous on May 6, 2017 at 11:40 am

      ANY level of promised pensions CAN be funded if you choose to unjustly/financially rape your taxpayers to do so.

      By the way, NYS’s pension is near fully funded under the phony “Public” Sector valuation approach. If NYS used the Private Sector assumptions & methodology, their funding ratio would be BELOW the average for Private Sector Plans and likely about 70%-75%.

      AND …….. NYC’s (phony) funding ratio is somewhere in the 60%-70% range if I recall correctly. They have a REALLY big problem.

      Reply

  5. Posted by S Moderation Douglas on May 6, 2017 at 6:23 pm

    It’s complicated…

    1) In some cases, higher pension benefits may merely
    compensate for salaries those paid to similarly skilled
    private-sector workers.

    2)typical new retiree (private sector) in 2005 had an income
    exceeding his inflation-adjusted average preretirement
    earnings.

    “First, overall benefit levels for public pensions should
    be made more comparable to those in the private sector.
    In some cases, higher pension benefits may merely
    compensate for salaries those paid to similarly skilled
    private-sector workers. However, it appears that in a num-
    ber of states more-generous pension benefits are sufficient
    to push overall public-sector compensation well above
    private-sector levels.”

    “One response to data showing generous public pension
    benefits is obvious: it is not that public retirees are so well
    off, but that other retirees are barely getting by. Certainly
    that is the impression you might gain from the popular
    press, where many assume that Americans’ retirement
    savings are wholly inadequate and concern over public
    employee retirement plans is little more than “pension
    envy.”

    “My own work with Glenn Springstead of the SSA
    found that the typical new retiree in 2005 had an income
    exceeding his inflation-adjusted average preretirement
    earnings.”

    ………………………….

    Generally speaking, private sector pensions are not as generous as in the public sector. That does not necessarily mean they cannot have an equally comfortable retirement, fueled by contributions from their higher wages.

    Forbes, JUL 7, 2016

    “Retirement Crisis? Retirees Have Same Average Incomes As Prime-Age Workers”

    Andrew Biggs ,  

     

    Reply

    • Posted by Anonymous on May 6, 2017 at 10:15 pm

      Quoting …

      “2)typical new retiree (private sector) in 2005 had an income
      exceeding his inflation-adjusted average preretirement
      earnings. ”

      Things were sure flying high in the 2005-2007 period (certainly no longer like that today), but even for that high-flying period, in my wildest imagination, I cannot see how that could be even close to accurate.

      Provide the readers with the a source (link) for verification.

      ***************************

      Re-reading the THIS paragraph, I think I’ve got it ………………

      “My own work with Glenn Springstead of the SSA
      found that the typical new retiree in 2005 had an income
      exceeding his inflation-adjusted average preretirement
      earnings.”

      Because the discussion was between Mr. Biggs and someone form the SSA, the words …”inflation-adjusted average pre-retirement earnings” ….. had clearer meaning.

      That’s a SSA term used in the calculation of the PIA. It’s each year’s earnings (up to the maximum wage base in each year) brought forward to retirement with inflation.

      Now call me a cynic, but somehow I think you wanted the readers to believe that that is close to their FINAL salary (or final average salary) at retirement … as is used in Public Sector used in DB Plan calculations. It isn’t, and it’s almost always considerably lower.

      Nice try …. caught you trying to BS the readers again.
      ***********************************************
      Stick to changing light bulbs.

      Reply

      • Posted by S Moderation Douglas on May 6, 2017 at 11:13 pm

        He is not just talking SS. For whatever reason, Biggs has been downplaying the “retirement crisis” for years.

        “Biggs observed in the Washington Post that Americans’ overall retirement assets are bursting at the seams, with 401(k) and Individual Retirement Account balances and benefits due from traditional pensions and Social Security having risen from 2.7 times total personal incomes in 1996 to 4.1 times in early 2015. Assets set aside for retirement are at “record levels,” he has written, noting that the total incomes of Americans age 65 or older are equal to 92% of the national average income, a higher percentage than Sweden, Germany and Denmark.”

        http://www.latimes.com/business/hiltzik/la-fi-mh-conservatives-say-there-s-no-retirement-crisis-20160106-column.html

        Reply

        • Posted by Anonymous on May 7, 2017 at 1:27 am

          Give the reads a link to Bigg’s statements….. you’re not trustworthy.

          Reply

          • Posted by S Moderation Douglas on May 7, 2017 at 7:42 am

            Oh ye of little faith!

            Actually, the source for that quote is in my other tablet. (The dog ate my homework?)

            It’s not like it’s a one off. Here is a similar quote…

            “The more accurate measure of a retiree’s ability to maintain his standard of living is to compare retirement income to that same individual’s work earnings. The Social Security Administration’s Office of Retirement and Disability Policy has done that with a sophisticated computer model that simulates individuals’ earnings, savings, pensions and Social Security benefits. The model shows that in 2012 the income of the median 67-year-old exceeded his career-average earnings, adjusted for inflation. Since the cost of living generally is lower in retirement, today’s retirees typically have a real standard of living higher than during their working years.”

            The imaginary retirement income crisis. Wall Street Journal

            ANDREW G. BIGGS And SYLVESTER J. SCHIEBER
            Wall Street Journal Sept. 29, 2014

            https://www.google.com/url?sa=t&source=web&rct=j&url=http://www.economicpolicyresearch.org/images/Retirement_Project/WSJ_The_Imaginary_Retirement_Income_Crisis.pdf&ved=0ahUKEwjduavnyN3TAhWo34MKHXTABgc4ChAWCDAwBg&usg=AFQjCNF_gTxTtTvhhii2QdbJaTAlBDY-AA&sig2=UDvNC2AVw54s-Z4KXbnd8g

          • Posted by Anonymous on May 7, 2017 at 9:18 am

            Oh, all of a sudden the light-bulb-changer-turned genius can’t find the link.

            Like I stated above ……. “you’re not trustworthy”.

            And as to your SUBSTITUTE link, there you go AGAIN, trying to hoodwink the readers………….

            That link references “career-average earnings” (used in SS calculations), NOT the very high % of FINAL (or Final Average) wages that monthly payout on which Public Sector DB Plan are calculated.

            And for BS #2, quoting what Private Sector workers get at age 67 ignores the “value” associated with Public Sector workers (on average) having collected retirement income for a far longer time than their Public Sector counterparts.

            ****************************

            And why are you avoiding the obvious APPLES-TO-APPLES Private to Public Sector pension comparison ….from their DB Plans ? Might it be (as I have been stating (and have mathematically demonstrated on numerous occasions) that Public Sector DB pensions are ROUTINELY 2 to 4 times (4 to 6 times for Safety workers) greater in value upon retirement than those of Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of service.

          • Posted by S Moderation Douglas on May 7, 2017 at 11:51 am

            What a grouch. You can disagree all you want, but I look this stuff up… I don’t make it up.

            http://www.aei.org/wp-content/uploads/2014/03/-aei-economic-perspective-march-2014_160053300510.pdf

            Third paragraph, page 7.

          • Posted by Anonymous on May 7, 2017 at 2:45 pm

            Responding to SMD….. Your 3-rd paragraph p7:

            “My own work with Glenn Springstead of the SSA found that the typical new retiree in 2005 had an income exceeding his inflation-adjusted average preretirement earnings.”

            A re-statement to which I already responded. He’s talking about ” inflation-adjusted average preretirement earnings”, NOT pensions based on the MUCH greater FINAL (or FINAL AVERAGE) wages as Public Sector pensions are based upon …. as well as being able to collect them at a MUCH younger age w/o reduction.

            As usual … just MORE of you hot air and BS.
            ********************************

            In this case you’re right, you didn’t make it up. You just either didn’t understand it or thought you could fool the readers.

          • Posted by S Moderation Douglas on May 7, 2017 at 9:07 pm

            You are talking out of your hat… again.

            Sure, there are four commonly used methods for calculating pre-retirement income, each with their own strengths and weaknesses. But if you have read many of Biggs articles, he says the big difference is how SS recognizes and calculates “other retirement income”

            In terms that “even the those with low levels of grey matter can understand”…

            “A 2004 study by two Rand Corp. economists using data from the federally sponsored Health and Retirement Study found that 87% of retirees said their retirement years were “better” or “as good as” the years before they retired. Most current retirees, they noted, “seem to be pleasantly surprised by their level of resources.” Even following the Great Recession, 75% of retirees told Gallup in June 2013 that they have enough money to live comfortably.”

            Biggs, again.

            Actually, the biggest complaints about Biggs calculations, from liberal pundits, is that he overstates retirement income completely, or by using “averages”, he is understating income for the higher levels and overstating retirement levels for the poor.

  6. Posted by S Moderation Douglas on May 7, 2017 at 8:53 am

    A challenge? Right back at ya.

    Posted by Anonymous on May 6, 2017 at 11:34 am

    “A challenge……. Pick the TYPICAL Private Sector (Large Corporate) DB pension Plan…” yada, yada, yada
    ………………………
    Public plans are reasonably accessible. Private plans, not so much. You have been yammering about private plans for years, but I don’t recall one concrete example.
    If you know a good source, share it.

    On the topic at hand, however… multiple employer plans, some of these look more than adequate, especially when combined with SS…
    ………………..
    “80-and-out” for UPS, freight, and many others (age plus years of service).

    A UPS worker, for example, age 52 with 28 years service, can retire with approximately $4,000 presently.
    ………………..
    New York State
    $5,500 for 30 and out at any age. (Starting in 2011, there will be an age requirement, such as 30-at-55 or 30-at-57 to get the full $5,500.)
    …………………………

    http://makeupsdeliver.org/comparison-of-pension-benefits-for-ups-teamsters/

    Reply

    • Posted by Anonymous on May 7, 2017 at 9:22 am

      There you go again, using Private Sector multi-employer Union Plans as the Private Sector example. Stop the BS…. I have point out many times that I compare Public Sector Plans to the FAR FAR greater number of single-employer Corporate-sponsored Plans in the Private Sector.

      Reply

      • Posted by S Moderation Douglas on May 7, 2017 at 11:38 am

        Again, show me the data.

        Reply

      • Posted by S Moderation Douglas on May 7, 2017 at 10:37 pm

        “A challenge……. Pick the TYPICAL Private Sector (Large Corporate) DB pension Plan…”

        You don’t like MEP’s?
        You don’t like doctors?

        You have been yammering about private plans for years, but I don’t recall one concrete example.
        If you know a good source, share it.

        Reply

  7. Posted by S Moderation Douglas on May 7, 2017 at 9:14 am

    Here is a start, since at one time you told me doctors DEFINITELY do not receive DB pensions.

    “CPMG provides a defined benefit pension plan, funded by the Medical group at no cost to the physician. The plan has a vesting requirement of five years of service. Typically, physicians become eligible for benefits upon their retirement at age 65, if they have at least ten years of qualifying service. Otherwise, if a physician meets the “Rule of 80″ (the sum of your years of service and age equal the number 80), you may retire with full benefits beginning at age 60.

    The exact amount of your pension is reached by using a specific formula. Your highest average compensation during the ten years prior to retirement is used to derive your highest average monthly salary. Then they take 1/2 of your highest average monthly salary and multiply this amount by 4% for each year of service. For example, a physician who has worked for CPMG for 20 years would receive 80% of 1/2 of his highest average monthly salary.

    Physicians who retire with at least ten years of service at age 65, or age 60 if qualifying for full early retirement, will be eligible to receive medical coverage for the physician and their spouse at the same level as provided for active physicians throughout the physician’s retirement. Upon eligibility for Medicare, an assignment of benefits to Kaiser Permanente is required.”

    (Also a 401(k) available.)

    http://co.kpphysiciancareers.org/why-work-here/compensation-benefits

    Reply

    • Posted by Anonymous on May 7, 2017 at 10:00 am

      SMD,

      I’d love to see my full statement where I said ….”you told me doctors DEFINITELY do not receive DB pensions. ”

      I quite sure I did not mean “any” because some large Corporate employers do hire MDs as in-house medical staff, and hence would participate in a Pension Plan available to all of it’s employees.

      I was talking about Private Practice Doctors (of 1 or in small group practices) as is the COMMON structure in the US. Very few have Final Average Salary DB Plans, and for those that do it’s usually set up Tax-strategy for older Doctors (with younger and few staff) to rapidly sock away huge amounts of money for their own retirements.

      *************************

      CPMG is part of Kaiser Permanente, a huge health and physician-service provider….. atypical of Doctor Practices in the US.

      I noticed that you didn’t add any comments comparing the level of pensions promised under CPMG to those typically offered Public Sector workers.

      So lets do so………….

      Full Retirement age:

      CPMG ……………………………. 65 (or 60 with Rule of 80)
      Public Sector-nonsafety ……. 60 (or 55)
      Public Sector-Safety………….. 55 (50 with 30 years*)
      * with “years” often inflated with “Airtime” at FAT lees than true value

      Pension Forumla:

      (a) years averaged in pensionable compensation:
      CPMG …….. 10
      Public Sector …….. usually 1 or 3 (sometimes 5)

      (b) per-year-of-service formula factor
      CPMG ………… 2% (because it’s 4% of 1/2 the avg 10 yr comp)
      Public Sector-nonsafety ……. 2 to 2.5%
      Public Sector-Safety………….. 2.5 to 3%

      COLA increases:

      CPMG ………….. No. (Silence DEFINITELY means NO)
      POublic Sector ………. Yes.

      *******************************************

      Basically you’ve provided an example of the relationship I been stating for years (although CPMG’s 2% formula factor is on the far upper end for the few Private Sector Plans still crediting pension accruals under Final Average Salary DB Plans)…………

      Adding all those differences together and you have a the Public Sector pension MULTIPLES greater in value than the CPMG Plan upon retirement.

      Reply

      • Posted by S Moderation Douglas on May 7, 2017 at 12:32 pm

        Anonymous on May 7, 2017 at 10:00 am

        SMD,

        I’d love to see my full statement where I said ….”you told me doctors DEFINITELY do not receive DB pensions. ”

        ………………………

        I stand corrected… Make that a “near-ZERO probability.”

        Tough Love says:

        April 15, 2015 at 5:45 pm

        S Moderation Douglas,

        You just made a blanket statement that the Private Sector physician has (a) a DB Pension (fully paid by the employer), (b) retiree healthcare, and a 401K Plan

        I challenge you to prove that…. even to a SMALL degree.

        Being well versed in employee benefits, while I can say that it would not be unusual for the doctor to have a 401K Plan, there is a near-ZERO probability that the doctor gets subsidized employer-sponsored retiree healthcare benefits beyond a modest $300-$500 deposited annually into a retiree HSA …. worth about 10% of the value of the retiree healthcare benefits TYPICALLY granted Public Sector workers (mostly at ZERO cost to them).

        And a Private Sector doctor (other than in a very small practice where they are fully funding it out of their own earnings) getting a traditional-style “final average salary” DB Plan (of the type almost ALL Public Sector workers get) has a near-zero probability.

        And Please …. don’t weasel your way out of your intentional mis-statements by claiming that you meant a “Cash Balance” Plan …. which is legally a DB Plan but in every other way looks like and acts like a DC Plan, and is FAR FAR less generous than the traditional-style “final average salary” DB Plans granted almost all Public Sector workers.

        (California Policy Center)

        Also, note, the healthcare plan is not “a modest $300-$500 deposited annually into a retiree HSA”… AND, if you think Kaiser is the only, or one of few hospitals with similar benefits, put down whatever it is you’re smoking.

        “Being well versed in employee benefits”

        Reply

        • Posted by Anonymous on May 7, 2017 at 3:41 pm

          Quoting SMD………

          “SMD,

          I’d love to see my full statement where I said ….”you told me doctors DEFINITELY do not receive DB pensions. ”

          ………………………

          I stand corrected… Make that a “near-ZERO probability.””

          *********************

          NO. You lied.

          Reply

      • Posted by S Moderation Douglas on May 7, 2017 at 1:08 pm

        Quoting Anonymous on May 7, 2017 at 10:00 am

        “Adding all those differences together and you have a the Public Sector pension MULTIPLES greater in value than the CPMG Plan upon retirement.”

        1) “MULTIPLES greater in value” is a gross exaggeration.

        2) A. Biggs… “In some cases, higher pension benefits may merely
        compensate for salaries those paid to similarly skilled
        private-sector workers.”

        3) If Biggs data on wages is even close to correct, private sector “professionals” earn 59% more in cash wages than public sector. Taxpayers, what would YOU do with 59% higher wages?

        4) If the rest of Biggs data is correct, even with pensions considered, the total compensation of the private sector doctor is 20% higher. Taxpayers, what WOULD you do with 20% higher compensation?

        This is why we do not compare pensions alone, outside the context of wages.

        I reiterate;

        “This is why we do not compare pensions alone, outside the context of wages.”

        You may see that statement again, from time to time, in response to some of your other misguided claims.

        Reply

        • Posted by Anonymous on May 7, 2017 at 3:51 pm

          Quoting SMD ……………

          “2) A. Biggs… “In some cases, higher pension benefits may merely
          compensate for salaries those paid to similarly skilled
          private-sector workers.””

          Yes….“In some cases” ….. and likely true for SOME (yes SOME) of the 3% of all Private Sector workers that fall into your often quoted PHD and “professional” categories.

          Yeah …3% of all Private Sector workers.

          The “financial impact” on taxpayers is the net of ALL workers, and for all but a small percentage, the PUBLIC Sector workers have a significant Total Compensation ADVANTAGE.

          *******************************

          Puerto Rico Public Sector workers/retirees will likely be getting materiel pension reductions. Hopefully we can jump from there to ALL Public Sector workers.

          Reply

          • Posted by S Moderation Douglas on May 7, 2017 at 4:27 pm

            Crystal clear… 60% of state workers nationwide​ are either underpaid, or roughly equal. According to the most conservative study.

  8. Posted by S Moderation Douglas on May 7, 2017 at 1:58 pm

    ¡Ay, caramba!

    Quoting Anonymous on May 7, 2017 at 9:18 am

    “And why are you avoiding the obvious APPLES-TO-APPLES Private to Public Sector pension comparison ….from their DB Plans ? Might it be (as I have been stating (and have mathematically demonstrated on numerous occasions) that Public Sector DB pensions are ROUTINELY 2 to 4 times (4 to 6 times for Safety workers) greater in value upon retirement than those of Private Sector workers retiring at the SAME age, with the SAME pay, and the SAME years of service.”

    Avoiding?

    How many times have I said it?
    How many ways can I say it?

    And I reiterate… “This is why we do not compare pensions alone, outside the context of wages.”

    “…workers retiring at the
    SAME age, with the
    SAME pay, and the
    SAME years of service.”

    Are not comparable, unless they have the SAME education, the SAME experience, and SAME responsibilities.

    Avoiding?

    Hardly, does any of this sound familiar?…
    Your comparison is GIGO…
    Your math is OK, but your logic is faulty…
    Show this to fifth grade teacher, learn how to do “word problems”.

    ……………………………………..
    Avoiding?

    Posted by PatB on April 17, 2016 at 11:50 pm

    Of the actuaries and accountants who must read this blog, I can remember no one defending your math. Maybe this is the time for them to come to your rescue, for the sake of truth, which there seems to be so little of in public pensions.

    Who can really understand the opaque rules and numbers that make up these pensions? Obviously not the pols, since they have not made a sound pension decision since before 1990. Not the unions, since they don’t want to be bothered at who will pay for the promises. And certainly not the members, who only understand what is promised, and believe in “the full faith and credit” of government to deliver.

    So if anyone supports your math, speak now. If they agree but find fault in it, they should say so, maybe we can all learn something. And if its mostly BS, I hope you can handle the truth.

    ………………………….

    I am not avoiding, Love. You are not listening.

    “In some cases, higher pension benefits may merely
    compensate for salaries those paid to similarly skilled
    private-sector workers.”

    Andrew Biggs

    “This is why we do not compare pensions alone, outside the context of wages.”*

    S Moderation Douglas

    (Wages of similarly qualified employees.)

    Reply

    • Posted by Anonymous on May 7, 2017 at 2:51 pm

      Quoting SMD (form above)….

      “Quoting Tough Love on April 17, 2016 at 7:34 am

      “the undeniable FACT that Taxpayers are unjustly FORCED to provide you with Total Compensation (via pensions & benefits ROUTINELY 3, 4, 5 even 6 times greater in valise upon retirement than those of comparable and similarly situated Private sector workers) FAR greater than necessary, reasonable, just, fair, or affordable.””

      I re-state that so even the those with low levels of grey matter can understand it:

      the undeniable FACT that Taxpayers are unjustly FORCED to provide you with Total Compensation FAR greater than necessary, reasonable, just, fair, or affordable ……. via pensions & benefits ROUTINELY 3, 4, 5 even 6 times greater in valise upon retirement than those of comparable and similarly situated Private sector workers”

      Reply

  9. Posted by S Moderation Douglas on May 7, 2017 at 3:05 pm

    Quoting Anonymous May 6, 2017…

    “Stick to changing light bulbs.”*

    Anthony Watts: “When you resort to name calling, you’ve lost the argument.”

    Socrates: “When the debate is lost, slander becomes the tool of the loser.”

    Trevin Long: “First person to insult the other loses the argument.”

    BobBadour: “Apparently, you are too stupid to comprehend the difference between an insult and an ad hominem argument.”

    Rabbi Shmuley Boteach: “Personal insults are the last refuge of the intellectual coward.”

    Pastor Rick Warren: “Insults are the last resort of insecure people trying to appear confident in their weak position.”

    Edmund Burke: “the personal attack is the last refuge of the scoundrel who has nothing of substance to say”

    anonymous: “Personal attacks are invalid arguments. They prove nothing. They hobble discussion. They’re a form of bullying. Just because politicians do it, doesn’t make it valid, rational, relevant or ok. It just means they’re being lazy, rude and choosing not to exercise self-control or rationality.

    Do people realize this? Try a personal attack on the author of a theory you hate, in a uni assignment, and see how your average nosedives! It’s just not accepted.”
    ………………………………

    *To be fair, it is doubly ironic because “Stick to changing light bulbs.”

    Is an insult only in your own mind.

    S Moderation Douglas: “When you don’t have anything substantive to say; don’t say it.”

    Reply

    • Posted by Anonymous on May 7, 2017 at 3:54 pm

      You really SHOULD stick to changing light bulbs ……… only a Public Sector worker could get a DB pension for such low-skilled work.

      Reply

  10. Posted by S Moderation Douglas on May 7, 2017 at 5:32 pm

    LOL!

    Often in error, never in doubt.

    Say goodnight, Gracie.

    Reply

  11. Posted by MJ on May 8, 2017 at 9:24 am

    Why is it that when TL shows up so does Moderation Douglas…….the blog then becomes a tit for a tat between the two….

    All that aside, all of your bantering back and forth still does not solve the problem of NO MONEY for promised pensions and benefits.

    …and why should someone in retirement be receiving the same amount of income as when they were at the height of their careers all of which to be provided by someone else?? Save for you own stinking retirements, pay off your debt before you retire…retirement of any kind was never meant to be a 25 year vacation paid for by someone else

    Reply

    • Posted by Anonymous on May 8, 2017 at 12:00 pm

      MJ,

      My position is that the promised pensions SHOULDN’T be paid for in full, because the Taxpayers have been ripped-off by the collusion between the Public Sector Unions and our Elected Officials, with the former BUYING the favorable votes of the latter (on pay, pensions, and benefits) with BRIBES disguised as campaign contributions and election support.

      We SHOULD contribute (including what has been contributed by taxpayers in past years) an amount which in total would have provided retirement security of an amount that likely would have been granted in the absence of that collusion. And as a proxy for that amount, I call for that to be a pension whose “cost” is such that when added to wages (AND benefits) results in EQUAL Public/Private Sector “Total Compensation”.

      THAT is called FAIR &EQUAL …. and SMD has a BIG problem with both.

      Reply

  12. Posted by Anonymous on May 8, 2017 at 6:53 pm

    http://www.nj.com/politics/index.ssf/2017/05/christie_vetoes_bill_turning_nj_pensions_over_to_u.html#incart_2box_nj-homepage-featured

    The veto has landed on a bill that according the blog moderator and Eric was rather meaningless…..

    Reply

    • Posted by Anonymous on May 8, 2017 at 8:12 pm

      Praise the LORD.

      A reprieve for NJ’s well-being ………. until the in-the-Union’s-pocket Phil Murphy becomes Governor.

      Reply

      • Posted by Anonymous on May 8, 2017 at 8:24 pm

        Quoting form the linked announcement, THE FOLLOWING (not the shifting to Police/Fire the right to make their own “investment decisions”) was the insanity in the original bills passed by the Senate & Assembly …………

        “Under the bill as passed by the Legislature, the board of trustees would be able to chart its own investment strategy and alter members’ contributions to their pensions, the formula for determining payouts and retirement age. They could also enhance or cut benefits, with consultation from an actuary.”

        Who WOULDN’T want to be able to set THEIR OWN pension benefit levels and how much THEY must contribute.

        Reply

    • Posted by Anonymous on May 9, 2017 at 2:15 am

      The NJ Local PFRS Plan has an “Official” funding ratio of just about 70%. But THAT ratio is with Plan liabilities discounted at NJ’s 7.9% (to be lowered to 7.65%).

      The following is a Table from a CPA journal article that can be found here:

      http://www.cpajournal.com/2017/05/08/state-local-government-pensions-crossroads/

      EXHIBIT 3

      Unfunded Liability Using Different Discount Rates Applied to the Overall Nationwide Pension Liability (Dollars in Trillions)

      The bottom section of this Table is how Private Sector Pension Plans must be valued and with a discount rate LOWER than the LOWEST rate (the 4%) shown in this table.

      If NJ’s Local PFRS were valued the SAME way (that Private Sector Plans must use), it’s Official funding ratio would drop to about 45%. To put in perspective just how very BAD that is, when a Private Sector Plan’s funding ratio drops below 60%, it is barred from granting any further pension accruals.

      One of the PFRS’s “justifications” for taking over their own Plan’s management is not only that it’s better funded than NJ OTHER Plans (an accurate statement), but that it is well-funded in absolute terms.

      THAT statement is FALSE …….. in the extreme. Barring a HUGE and long-sustained run-up in equity values, there are few scenarios in which this plan will not need VERY VERY material increases in Taxpayer contributions to be able to pay the promised pensions….. noting that it’s the Taxpayers, NOT the workers who must make up for any Plan asset shortfalls.

      Taxpayers should FREEZE this Plan (along with all of the other NJ Plans just to stop digging the HUGE hole they are now in deeper every day) …… and NOT even remotely consider transferring “management” of these Plans to the PFRS Unions under S3040/A99 ……. especially noting that these bills will give the Unions not only the power to choose and invest assets, but also, the power to reinstate COLAs, to lower employee contributions, and to increase pensions.

      Don’t fall for the Union BS ………. or that of NJ’s Elected Officials whose ONLY allegiance is to the Public Sector Unions who fund their re-election campaigns.

      Reply

  13. Posted by MJ on May 9, 2017 at 7:44 am

    Not a Christie fan but good call on his veto of this ridiculous proposal…….but as someone else noted I’m sure it is only a reprieve until the next goon is voted in as governor,

    Reply

  14. Posted by Anonymous on May 9, 2017 at 12:30 pm

    In an earlier comment (responding to MJ’s link announcing Christie’s veto of the bills transferring management of the LOCAL PFRS pension to their Unions), I responded with:

    Praise the LORD.
    A reprieve for NJ’s well-being ………. until the in-the-Union’s-pocket Phil Murphy becomes Governor.

    A follow-up on my response……..

    For the vast majority of NJ Elected Officials, they are indeed “in-the-Union’s-pocket” because it the Unions that buy THEM, because THEY need the Union’s money to finance their campaigns (as well as the block voting and election support).

    With super rich guys like Phil Murphy it’s different.

    Yes, he has that burning desire to be Governor but like John Corzine some years back, he DOESN’T need the Union’s money, only their votes and the troops-on-the-ground election support.

    THAT is what makes this so sad, especially for someone (with his financial background) that assuredly recognizes the ROOT CAUSE of NJ’s pension mess ….. the ludicrously generous level of it’s pension & benefit promises.

    You see, with his money he COULD HAVE attempted to make REAL change (for ALL of NJ’s Taxpayers) and fought-the-fight………. by calling out the Unions for their greed and arrogance, and seeking as his voter base the masses of NJ taxpayers who have been and will continue to be disenfranchised with ever growing taxes if these pensions & benefits are not reined-in.

    Reply

  15. Posted by S Moderation Douglas on May 9, 2017 at 3:18 pm

    From the Phil Murphy website…

    “New Jersey has the worst funded pension system in the country, which is a result of this governor and other Trenton insiders choosing to provide for the well-connected, rather than fulfill their obligations. Twelve years ago, Phil Murphy chaired the first commission to evaluate the state’s pension system in light of a growing unfunded liability. The commission recommended, first and foremost, that the state must meet its obligations and respect the collective bargaining process. These are the first principles Phil will bring to the issue as governor.”

    ……………………………

    What if…

    Phil Murphy, (with his financial background) does …not… “assuredly recognize the ROOT CAUSE of NJ’s pension mess ….. the ludicrously generous level of it’s pension & benefit promises.”?

    And what if he is correct?

    Reply

    • Posted by Anonymous on May 9, 2017 at 4:17 pm

      SMD, We discussed this before……….

      While we have differences of “opinion” on many things, that calculated funding requirements FOLLOW FROM (and in direct proportion to) the generosity of promised Plan benefits is fact, not a matter of opinion.

      The inability to fully find EXCESSIVE promises is indeed the ROOT CAUSE of NJ’s pension mess.

      Reply

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