After months of mindless politicking we get to the weekend before a primary election in New Jersey and it’s all about who will win with only token (and obviously misinformed) references to real issues:
.
.
Yes that is a state senator speaking and among the inconvenient facts he appears to be completely ignorant of:
- Based on the latest data New Jersey tops Illinois as the state with the worst-off pension system.
- Since 2001 whereas Illinois contributed $59 billion into a comparable pension system New Jersey put in $19 billion.
- Forgone contributions and earnings thereon dwarf what Christie has been grudgingly deposited.
- The Judicial Retirement System will run out of money in 2021.
- These are the guys who are supposed to be fixing the system. More deniers than doers.
Burypensions Blog 
Posted by Eric on June 4, 2017 at 12:24 pm
Many have been told, that the politicians promised the judges, that the judges “will be taken care of”, at the expense of the other pension systems.
It is time for some federal indictments.
Eric
Posted by steve on June 4, 2017 at 6:54 pm
In the words of the immortal Alfred E Newman ” what me worry ?”–new jersey politicians are truly ” MAD”
Posted by Anonymous on June 4, 2017 at 7:30 pm
Jack’s got your back…..
http://www.nj.com/politics/index.ssf/2017/06/where_the_candidates_running_to_succeed_christie_a.html
Kim will surely give her spouse’s JRS special dispensation?
But surprisingly not Murphy –
http://www.nj.com/politics/index.ssf/2017/06/kudos_to_everyone_but_that_knucklehead_from_you_kn.html#incart_2box_nj-homepage-featured
See you in four years, same storyline!
Posted by Anonymous on June 4, 2017 at 8:02 pm
Let the exemptions begin…..
http://amp.pennlive.com/v1/articles/20810587/new_state_pension_proposals_ba.amp
Posted by Anonymous on June 4, 2017 at 8:02 pm
Let the exemptions begin…..
http://amp.pennlive.com/v1/articles/20810587/new_state_pension_proposals_ba.amp
Posted by George on June 4, 2017 at 8:31 pm
0:44 ‘to fully fund it you’re going to stick 30 billion dollars into the pension system to have it right side up’
Posted by Anonymous on June 4, 2017 at 10:33 pm
Yeah, try $150 Billion in cash due TODAY.
Posted by George on June 5, 2017 at 10:44 am
The question is if “fully funded” and “right side up” are the same thing. Maybe 30 billion dollars is enough to achieve “right side up”.
Posted by Anonymous on June 5, 2017 at 1:13 pm
Wonder what the stats are for average/median income and net worth for small to medium NJ business owners; as well as mid to upper management and executives for large corporations. Last I checked NJ borders are open so free market choices not exclusive to the private sector. Furthermore what about the economic incentives for private entities, then the employees they hire and eventually retire move out of state.
Posted by Anonymous on June 5, 2017 at 2:06 pm
Yes, the PRIVATE Sector has “free market” choices where (a) employers compete for talent by offering “market-rate” compensation ….. unencumbered by the compensation distortions commonplace in the PUBLIC Sector, and (2) where consumer are free to choose from whom the buy products and services.
Unlike THAT, the PUBLIC Sector has been twisted to be anything BUT a “free market”. Compensation isn’t base on “market-rate” factors, but on how successful the Public Sector Unions have been in BUYING the favorable votes of our Elected Officials with BRIBES disguised as campaign contributions and elections support. And State/City residents do NOT have a free choice as to where they buy products and services. Even thought VASTLY overpriced, they MUST buy Police, DPW, Teachers, Clerical services, etc. for the ONLY source offered ….. the grossly overcompensated PUBLIC Sector.
Posted by Anonymous on June 5, 2017 at 4:29 pm
The beauty of it is you choose where you live!
Posted by S Moderation Douglas on June 5, 2017 at 11:18 pm
You are incorrigible, and you will never change.
Your “free market” is not even close to free, you don’t have as many choices as you think… in employment or in goods and services. Big business is much more adept at influencing legislation and regulations than unions could ever hope to be.
Your ostensibly “grossly overcompensated PUBLIC Sector” is at best a figment of your imagination and tainted by your biases. Even the most conservative study is based on data up to nine years old, predating pension and benefit reforms in most states and local governments, and changes in compensation in both sectors.
And comparing “average compensation” between public and private sectors is worse than useless. Whether it is “roughly equal”, as most (also dated) studies say, or 23%, according to Biggs, the average is not nearly as relevant as the compression of compensation. It is not a bad thing. The “floor” on compensation at the lower end and the ceiling on professional pay and benefits set a good example for the private sector.
Most pension “reformers” don’t agree with the concept of cutting pay/benefits for the rank and file, and certainly don’t have any desire to increase the pay of public sector professionals. “EQUAL” compensation is just not on the horizon.
And that is a good thing.
Posted by Anonymous on June 5, 2017 at 11:30 pm
Quoting SMD …..
“Even the most conservative study is based on data up to nine years old, predating pension and benefit reforms in most states and local governments, and changes in compensation in both sectors. ”
Unless you are a liar, to make that statement you must have obtained and reviewed EVERY study.
Please identify all of them ….. or admit you are a liar.
Posted by S Moderation Douglas on June 5, 2017 at 11:57 pm
“Yes, well, I’m polymerized tree sap and you’re an inorganic adhesive, so whatever verbal projectile you launch in my direction is reflected off of me, returns to its original trajectory and adheres to you.”.
Posted by Anonymous on June 6, 2017 at 1:30 am
SMD, I like that description ….”polymerized tree sap”. Not quite the festering sore I had in mind, but not bad.
Posted by Anonymous on June 6, 2017 at 10:41 am
SMD,
Yes I will never change ………. because I’m correct (and unlike you, call for equal and fair compensation) …… and Forbes seems to agree with me. Below are the first 2 paragraphs form THIS article (published yesterday), and while being about the dire situation in Illinois, it applies equally to the DB Plan everywhere. In fact it PERFECTLY describes how the pension mess has developed in BOTH of our home States, CA and NJ
https://www.forbes.com/sites/jeffreydorfman/2017/06/05/illinois-credit-downgrade-proves-public-pensions-should-be-outlawed/#30eff26a7d4a
******************************************
Moody’s and S&P downgraded the general obligation debt of the state of Illinois on Thursday, June 1, on a combination of a state government budget impasse and a seemingly unstoppable unfunded pension obligation that has now ballooned into at least a $130 billion shortfall. Illinois is entering its third year without the state legislature and governor being able to agree on a budget, it has $15 billion in unpaid bills, and it credit rating is now only one step above junk bond status. Illinois is far from alone in its pension liabilities, just the worst offender. Yet the lessons of Illinois show that this problem has only one solution: outlaw defined benefit public pension plans.
The basic process by which states get in such severe financial trouble is well established. Unions get protection from any future diminishing of pension obligations enshrined into state law or, ideally, the state constitution. Then public sector unions give state politicians big campaign contributions in exchange for large, irresponsible future pension benefits. The state legislature then underfunds those pensions, keeping the taxpayers from realizing the full cost of the promised pensions and eliminating any near term pain from the pension promises. Unions don’t object to the underfunding because they know the law protects their pensions no matter how bad the situation gets. Eventually, you are Illinois, with a pension shortfall equal to roughly eighteen months of total state spending.
**********************************************
Did you note the statement:
“…this problem has only one solution: outlaw defined benefit public pension plans.”
Posted by S Moderation Douglas on June 6, 2017 at 12:29 pm
There is more than one solution to almost any problem.
Reason Foundation…
https://www.forbes.com/sites/realspin/2017/04/06/retirement-security-requires-fully-funding-public-pension-plans/#59460617b7d5
Posted by Anonymous on June 6, 2017 at 5:27 pm
Yes, but the insatiably greedy Unions/workers will fight ANYTHING that includes more than immaterial givebacks. The future service accruals for all CURRENT workers should be DC (401K-style) Plans with a 3%-of-pay “match”, just like Private Sector workers get from their employers …….. EQUAL, but NOT better.
And why Public Sector Unions are a CANCER inflicted upon civilized society.
And why as Forbes states …“…this problem has only one solution: outlaw defined benefit public pension plans.”
Posted by Anonymous on June 6, 2017 at 5:56 pm
Not Forbes:
“Opinions expressed by Forbes Contributors are their own.”
Jeffrey Dorfman, contributor
Cancer is in the eye of the beholder.
Posted by Anonymous on June 6, 2017 at 7:28 pm
Oh you mean we can’t believe everything anon aka TL says – what a surprise!
Posted by Anonymous on June 6, 2017 at 10:58 pm
Actually it was ……….
“Guest commentary curated by Forbes Opinion. Avik Roy, Opinion Editor. ”
I DOUBT they disagreed with it.
Posted by Anonymous on June 7, 2017 at 2:28 am
SMD thinks he’s right (oh the misunderstood Public Sector Unions & workers) and everyone else (particularly me) is wrong.
But perhaps not everyone:
http://www.sbsun.com/opinion/20170606/many-government-workers-have-it-made
Here’s the last few paragraphs (after summarizing countless excesses in CA’s Public Sector pay & pensions):
*************************************
“In a region where roughly one-in-five live in poverty and the median household income in the Riverside-San Bernardino-Ontario California metro area was estimated to be $56,087 as of 2015, it raises questions about how so many government employees are making so much.
Transparent California research director Robert Fellner shared a plausible explanation. “As long as California gives coercive, monopolistic powers to government unions, taxpayers will continue to be forced to pay for lavish benefits that dwarf what they themselves can expect to receive,” he said.
Indeed, it often seems as though public dollars are increasingly geared toward benefiting public employees rather than the public itself. It’s a trend likely to continue given the symbiotic relationship between government unions and politicians, with donations and endorsements exchanged for favorable, enriching contracts.”
***********************
Gee, I’ve been saying the SAME darn thing for years now.
Posted by S Moderation Douglas on June 7, 2017 at 4:00 am
Posted by Anonymous on June 7, 2017 at 11:21 am
SMD, Seems you weren’t satisfied by my last linked article, so here is another example of the way CA (your home State) Taxpayers are ripped-off by their insatiably greedy Public Sector Unions/workers….
http://californiapolicycenter.org/prison-unions-punish-california-taxpayers/
And quoting just one paragraph:
*****************************
“California is in an ignominious group of 10 states that saw declines in the prison population since 2010, but which increased spending by $1.1 billion. Furthermore, California’s spending increase accounts for more than half of that number. California has by far the costliest system of incarceration in the nation at more than $75,000 per inmate per year – more than triple the average cost of the 18 states with the least-costly rates.”
*********************************
Yes, Public Sector Unions are a CANCER inflicted upon civilized society.
Posted by Anonymous on June 7, 2017 at 11:59 am
Opinion based on opinion is a great source of opinion, nothing more.
Posted by Anonymous on June 7, 2017 at 1:16 pm
And you …… a Public Sector worker or retiree ….. riding this ludicrously excessive Pension/Benefit gravy train, is someone Taxpayers should listen to ?
Really ?
Posted by Anonymous on June 7, 2017 at 2:21 pm
Oh contraire private sector charlatan.
Posted by Anonymous on June 5, 2017 at 1:15 pm
http://www.cbsnews.com/amp/news/religious-hospitals-pension-dispute-supreme-court/
Posted by Anonymous on June 5, 2017 at 1:15 pm
http://www.cbsnews.com/amp/news/religious-hospitals-pension-dispute-supreme-court/
Posted by Anonymous on June 5, 2017 at 1:16 pm
http://www.courant.com/business/dan-haar/hc-haar-union-concession-makes-sense-20170605-story,amp.html
Posted by Anonymous on June 6, 2017 at 8:08 am
You mean they don’t currently contribute to their DBP?
http://amp.oregonlive.com/v1/articles/20815269/democrats_propose_employee_cos.amp
Posted by S Moderation Douglas on June 7, 2017 at 2:08 pm
It’s not just you, Love. You can’t swing Schrödinger’s may-be-dead cat in in the cyber-sphere without hitting someone writing incredible (as in… not credible) fairy tales.
Start with your Robert Fellner. His modus operandi is more transparent than his public sector worker shaming website:
A) Pick a really big number from column A. (Public)
B) Pick a really small number from column B. (Private)
The numbers don’t have any logical relationship, as long as one is big and one is small and they are in close proximity in your press release. What does “median household income” have to do with final payouts for public workers? Nothing. (“median household income was estimated to be $56,087…) Why not average household income? ($71,693) Why use household income at all? What is household income?
“Household income is a measure of the combined incomes of all people sharing a particular household or place of residence. It includes every form of income, e.g., salaries and wages, retirement income, near cash government transfers like food stamps, and investment gains.”
A household may be two or more full time workers, or it could be a single parent whose income is a minimum wage job and food stamps. Or a retiree on Social Security.
The only valid comparison is total compensation for workers with similar education and other demographic characteristics. Fellner ain’t got it. All he has is big numbers and non sequitur little numbers.
So… what about comparisons? Ed Ring, California Policy Center, says “California’s Government Workers Make TWICE As Much as Private Sector Workers”
And he is wrong.
Cato Institute says “Federal Workers Earn 78% More Than Private Sector Employees”
And they are wrong.
Brietbart says “Government Workers Cost 45% More Than Private Sector Workers”
Wrong again.
Will Swaim, California Policy Center, says California Highway Patrol officers retire after twenty years with $100,000 pensions.
Wrong again.
Mark Bucher, (California Policy Center, again) says most firemen retire with $250,000 pension, for thirty years.
Still wrong.
Tough Love says “Public Sector pensions are ROUTINELY 3x-4x greater in value at retirement than those of Private Sector workers making the SAME pay, retiring at the SAME age, and with the SAME years of service …. and that 3x-4x TYPICALLY rises to 4x-6x for Safety workers (with the most egregious pensions).”
Question; have you ever found even one reputable accountant or actuary to confirm that statement? You wouldn’t even get that by your fifth grade teacher. As always, there is one “SAME” missing. If the employees are not equivalent in education, experience, and other demographic factors, the comparison is not valid.
Still GIGO.
Thus has it always been, thus shall it ever be.
Finally, what is the average pension for full-career CalPERS miscellaneous retirees? $65,148 in 2015, according to Robert Fellner.
And how poor are today’s taxpayer retirees??
ACCORDING TO FORBES!!! (Contributor, but “I DOUBT they disagreed with it.”)
” If we want to accurately measure retirees’ incomes we need to accurately capture IRA and 401(k) withdrawals. That points toward IRS Statistics of Income data, since those withdrawals are taxable and thus are more fully reported. For households aged 65 and over in 2013, IRS data show an average total income of $70,085.”
…
“Fully counting the incomes received by today’s retirees – especially, withdrawals from retirement plans – shows that, on average, retirees are doing very well. No one argues that retirees need per capita incomes as high as households 20 years younger who are at the peaks of their working careers. But according to the IRS data, that’s what they have.”
“Retirement Crisis? Retirees Have Same Average Incomes As Prime-Age Workers” Forbes, July 7, 2016
I am the eponymous reliable and unbiased source: S “Moderation” Douglas.
Posted by Anonymous on June 7, 2017 at 2:38 pm
Blah Blah Blah……….
Just more mindless (throw-in-the-kitchen-sink) blather to stop the Taxpayer-Readers from realizing how much they are being ripped off by Public Sector compensation (for all such workers taken together ….. which IS what financially impacts Taxpayers) that is FAR in excess of what comparably situated Private Sector workers earn.
Which by the ONLY State-Specific study I am aware of (the AEI Compensation Study) comes out to be a 23%* of pay PUBLIC Sector advantage in both your home State of CA, and my home State of NJ.
Taxpayers ……….. think about it (that 23%* of pay Public Sector Total Compensation ADVANTAGE). How much more would YOU have for YOUR retirement if YOU had an additional 23%-of-pay (tax deferred no less !) to save and invest in every year of YOUR working career? ……… $500,000? ……$1 Million? …… perhaps even $2 Million.
Well, THAT’s a good measure of the amount by which EACH Public Sector worker is ripping YOU off, primarily not via excessive cash wages, but via DB pension rarely less than 2 to 4 times (4 to 6 times for safety workers) greater in value upon retirement than what YOU typically get from YOUR employer.
And additionally………. who but Public Sector workers is still accruing employer-sponsored retiree healthcare benefits today? Certainly NOT Private Sector workers.
* 33% if the significant incremental value of much greater PUBLIC Sector job security is included, and even higher if Public Sector Safety workers (who have the highest pay & pensions) had not been excluded from the AEI study.
Posted by Anonymous on June 7, 2017 at 8:28 pm
SMD,
Since you brought up (and as usual & expected, challenged) my claim that Public Sector pension are MULTIPLES greater than those granted Private Sector workers who retire at the SAME age, with the SAME wages, and the SAME years of service, I thought I would re-post one (of several) of my old mathematical “demonstrations” to that effect….. specifically addressing the Public Sector DB pensions offered in your home State of CA.
I’m not afraid of putting all the details out there for everyone to question, critique, challenge, or ask questions.
*************************************
Instead of addressing CA Pubic Safety worker pension generosity from the perspective of how much MORE GENEROUS their pensions are than those of the Private Sector workers, I will address that generosity question from the opposite perspective, that being …. how large would the comparably situated (in pay, service years, and retirement age) Private Sector worker’s salary have to be to receive a pension as large as that of the TYPICAL full-career CA Public Sector safety worker.
———————————————————————————————————————
In California the typical recent Pubic Safety retiree’s pension starts at just about $100,000 and is COLA adjusted thereafter. By looking at a table of life annuity factors, such a COLA-adjusted single life immediate annuity has a value or cost upon retirement of just about $1.8 Million (18 times the annual pension). One way to judge if that is reasonable (or “appropriate and fair”) to Taxpayers is to answer the question … What would be the necessary INCOME LEVEL (or Final Average Salary … FAS) of a Private Sector worker with the TYPICAL Private Sector DB pension (for the few Private Sector workers lucky enough to still be covered by such a pensions) to obtain a pension from his/her employer with the SAME $1.8 Million “value” upon retirement ?
Assume the CA safety worker has the typical 3% of final average pay per-year-of-service pension factor, had a final average salary of $111,111, 30 years of service and retired at age 55… resulting in the starting pension of $111,111 x .03 x 30 = $100,000. Next, let’s assume the Private Sector worker’s DB pension formula is 1.25% per year of service (a quite typical formula), is NOT COLA adjusted (routine in PRIVATE Sector Plans), and has a full unreduced retirement age of 62 (with a 4% reduction in pension payout for each year of age that you retire begin collecting your pension before age 62).
For a given Final Average Salary (FAS), this Private Sector worker’s annual pension (P) is given by the formula P = (FAS x 30 x .0125)x (1-((62-55)x.04)), with the latter part of that formula being the adjustment for early retirement at age 55. Shortening that formula, we have P = (FAS x 30 x .0125) x 0.72.
From above, we saw that the Safety worker’s pension (being COLA-increased) has a lump sum “value” of 18 times the annual STARTING pension. With no COLA increases, the lump sum “value” is only 13 times the annual pension. Therefore the Lump Sum “value” of the Private Sector worker’s pension is given by 13 x P, and since we are SETTING that value equal to the $1.8 Million value of the safety worker’s pension, we have $1,800,000 = 13 x P, and solving for P, we have P= $1,800,000/13 = $138,462. This Private Sector non-COLA-increased annual pension of $138,462 can be looked at as being mathematically equivalent to an otherwise identical pension starting at $100,000 that includes 3% annual COLA increases (i.e., the Safety worker’s pension).
Now since we know the annual Private Sector worker’s annual pension “P”, we can plug it into my above formula of P = (FAS x 30 x .0125) x 0.72 to solve for FAS. Doing so we have, $138,462 = (FAS x 30 x .0125) x 0.72, from which
FAS = $138,462/(30 x 0.0125 x 0.72) = $512,822
What this shows is that a Private Sector worker (with a TYPICAL DB pension formula and provisions) would need to have a final average salary of $512,812 to generate a pension from his/her employer with the SAME $1.8 Million “value” as the TYPICAL Safety worker pension …. or $512,822/$111,111 = 4.62 times the Safety worker’s salary.
And for the skeptics that say …. this can’t be correct …. we can just reverse the order of calculations and SHOW that this $512,822 PRIVATE Sector salary is indeed necessary to generate a pension with a “value” equal to that (the $1.8 Million) of the Public Sector Safety worker … as follows:
(a) Private Sector worker’s Annual (non-COLA-increased) pension = $512,822 x 30 x 0.0125 x .72 = $138,462
(b) Lump sum value (using the 13 times life annuity factor applicable to non-COLA-increased pensions) = $138.462 x 13 = $1.8 Million
While most reasonable people would suggest that (give the nature of the occupations) Safety workers should receive pensions equivalent to Private Sector workers with salaries say 10% or 25% or perhaps even 50% greater than they, I find it incredulous to believe that ANYONE would feel it appropriate to provide the TYPICAL CA Safety worker retiree with a pension equivalent to that of the Private Sector worker making over $500,000 annually. Taxpayers (who pay for all but the 10-20% of the Total Cost of Public Sector pensions typically paid for by the worker’s own contributions INCLUDING the investment earnings thereon) simply cannot afford anything even remotely close to this level of generosity.
And to preemptively address the anticipated comeback ………… the 4.62 times greater CA safety pension is NOT A FUNCTION OF the Officer’s final pay. It would remain 4.62 times even if the officer’s final pay (and hence starting pension) were 10%, 20% or even 50% lower.
The 4.62 time greater CA Safety worker pension results from the MUCH richer Formula and MUCH more generous “provisions” as follows:
(1) Benefit from the richer “formula” of 3% vs 1.25% = 3.00/1.25= 2.40 greater
(2) Benefit from only the CA safety worker getting COLA increases = 18/13 = 1.3846
(3) Benefit from no CA Safety worker pension reduction for full (unreduced) retirement at age 55 = 1.00/0.72 = 1.3889
The above beneficial ratios are multiplicative, giving the overall advantage of 2.40 x 1.3846 x 1.3889 = 4.62 times.
********************************************
While the above appears complicated, it’s just requires some concentration and a basic understanding of high school algebra.
Critiques/questions welcome.
Posted by S Moderation Douglas on June 8, 2017 at 2:44 am
Déjà pu
I can’t believe you brought that one out of mothballs. GIGO to two decimal places.
How many times. How many ways do we have to say…
Your comparison of the
SAME age
SAME wages
SAME years of service…
Have absolutely no validity unless you are comparing SAME type of worker in regards to education, responsibilities, and other demographics. All that math for nothing.
From the archives (California Policy Center )
S Moderation Douglas says:
June 19, 2015 at 12:49 pm
“That’s exactly what I was getting at…….….” ???
Whut ? A brain surgeon (really!) makes more than a Police Officer?
A hypothetical brain surgeon, at that.
BUT!!!
If……we can find a private sector worker with job ricks similar to a Police Officer….
“We will LIKELY find employer-sponsored retirement package TYPICALLY worth no more than $500,000.”
Why “find” him? Make one up! Another hypothetical retiree.
Brother, I don’t know now if you are backpedaling or going sideways, but your math is still moot.
………………..
TL quote:
“the value at retirement of the very typical full career California safety workers is not 25% or 50% greater but is ROUTINELY FIVE TIMES greater.”
Is irrelevant unless you are comparing similar jobs.
No one is surprised or shocked that a brain surgeon (really!) makes 4.62 times what a Police Officer makes. Even if that brain surgeon is hypothetical.
In the meantime, as you told fouls123 (burypensions), “there are dozens of such Gov’t and University studies on the subject”
They all agree, and have always agreed:
1. Across the board, public workers earn less in cash wages than equivalent private sector workers.
2. At the lower educated levels, pensions and benefits more than make up for the lower pay, so the total compensation in the public sector is higher.
3. At the higher educated levels, cash wages are significantly lower in the public sector, and pensions are not enough to offset the deficit.
Where safety workers fall on that continuum is up for debate, but your hypothetical math is not helping.
Who, indeed, is BSing whom?
Not me, brother.
Posted by Anonymous on June 8, 2017 at 3:43 am
SMD,
The response I expected, after all, you were a light bulb changer.
Posted by Anonymous on June 8, 2017 at 4:11 am
Not a lot changes……..
You (SMD) and I traded the same back and forth commentary a few years back here:
http://californiapolicycenter.org/public-sector-reform-requires-mutual-empathy/
Reader, If you are inclined read them and judge for yourselves.
Posted by S Moderation Douglas on June 8, 2017 at 5:57 am
You now know (since the light bulb changer pointed it out) that the 3%@50 formula is not a “fifty percent increase” over the old 2%@50 safety formula. (Except for those few who actually retired at exactly age fifty.) Even Rex/SurfPuppy finally figured that out, only after several years of trying to ridicule me for stating that fact. So be it. There are still many who don’t understand that simple math.
Optimistically speaking, at some point in the near future, that little light will come on in your head (you are welcome), and you will realize that your “math” is merely a restatement of the already very well known fact that public sector workers receive a higher portion of their compensation in benefits than do private sector workers. Your math says public pensions are more generous, ceterus paribus, than private sector pensions. Fine, we already knew that. (But not to two decimal places. There are too many variables to warrant that.)
What your math does not, cannot do, is “prove” that in any case the relatively higher pension results in higher total compensation than an equivalent private sector worker. For that, we have to go to the data.
The data fairly clearly indicates that at the lowest educated level, private and public workers earn similar wages, so the higher benefits result in higher total compensation for the public worker.
It also cleary shows that at the professional level, even though the pensions may be two or three times (or even 4.62 times) the pension of an equivalent private worker, that pension (and benefits) is not enough to offset the lower salaries. Nothing wrong with the math, it just doesn’t “prove” what you claim it does.
Ergo, it is useless. Actually worse than useless, because it is misleading.
Posted by Anonymous on June 8, 2017 at 11:26 am
Quoting SMD,
“You now know (since the light bulb changer pointed it out) that the 3%@50 formula is not a “fifty percent increase” over the old 2%@50 safety formula. (Except for those few who actually retired at exactly age fifty.) Even Rex/SurfPuppy finally figured that out, only after several years of trying to ridicule me for stating that fact. So be it. ”
No, I knew it for a long time, and in fact supported you in convincing Rex/SurfPuppy that it was true. When he heard that support from ME (someone who rarely agrees with you), it appeared (from the sequence of comments) that he then did some further research of his own, and finally agreed that SB400 was not an across-the-board 50% increase.
*************************************
And there is nothing wrong with my thinking, and CERTAINLY nothing wrong with my math in demonstrating (above) that for a Private Sector worker to get a pension with the SAME value upon retirement as that routinely granted CA’s Safety workers, they would need (assuming they had a DB pension with the formulas/provisions common in Private Sector Plans still granting accruals) to have wages in excess of $500,000 (or more specifically, 4.62 times the wages granted the Safety worker).
That demonstration has nothing to do with any specific Private Sector occupation. It was simply to point out the absolutely ludicrous “richness” of Public Sector Safety-worker pensions. I don’t understand your focus on a $500K annual wage Surgeon, (and I’m sure some do make $500K annually). There are many jobs that have risks of comparable magnitude as those of safety workers (per the US Gov’t BLS) and whose occupations require education, experience, skills, and knowledge of equal magnitude …. all of whom excepting major commercial airline Pilots make LESS in cash wages alone than safety workers, but STILL would need to have haves 4.62 times greater wages than Safety workers to get a pension of EQUAL value upon retirement.
You are so STUCK on refusing to accept the absurdity of Safety worker pensions that appear unable to think clearly, and concoct scenarios that might “appear” to some readers to justify your desired goal That 4.62 times-greater RELATIONSHIP applies to EVERY Private Sector occupation. What % of Private Sector workers are $500K annually-wage surgeons?
Posted by Anonymous on June 8, 2017 at 12:01 pm
And for completeness, readers should not walk away thinking that this is ONLY a problem of excessive Public Sector “SAFETY-Worker” Total Compensation via grossly excessive pensions (and benefits).
While the pensions promised Non-Safety-Worker Public Sector employees are less rich (in both formulas & provisions) than those granted Safety workers, they remain FAR FAR too generous vs their Private Sector counterparts. A mathematical workup similar to the one I provided above for Safety-workers (resulting in 4.62 times greater pensions, or alternatively, needing a 4.62 times greater salary to get a pension equal to that of the Safety worker) would show a multiple centering around 3 times greater for Non-Safety-workers. I say “around” 3 times because there is a much wider range of pension formulas and provisions for Non-Safety-workers than for Safety-workers …. with all likely falling between 2 times greater to 4 times greater.
Posted by S Moderation Douglas on June 8, 2017 at 4:32 pm
The brain surgeon was your idea…
Tough Love says:
June 19, 2015 at 7:59 am
“Good example …… but you forgot to mention that the likely Pubic Sector employee would be a Police Officer, and the Private Sector worker a brain surgeon (really !).”
…………………
Really !
Congratulations !! Your math shows that public workers have larger pensions than Private workers. We already knew that. But to claim these pensions are EXCESSIVE, you would need to show that these pensions, combined with wages, results in a higher total compensation for the public worker. You did not do that. You cannot do that with the information in your demonstration.
Biggs did it for us. Compare a real private sector doctor to a real public sector doctor.
The Public sector doctor (“professional”) has wages of $97,685 the private sector doctor has wages of $155,797… 59% higher.
The public sector doctor clearly has a much higher pension. Is it excessive? Even with the higher pension (and retiree healthcare), his total compensation is lower than that of the private sector doctor. 17% lower, according to Biggs.
You math just doesn’t logically say what you claim it says. Perhaps Surfpuppy can explain it to you.
Posted by Anonymous on June 8, 2017 at 6:51 pm
SMD,
( 1) responding to the quote…..
Here was my FULL comment (not surprising that cut out a small part to mislead the readers):
************************************************
“Good example …… but you forgot to mention that the likely Pubic Sector employee would be a Police Officer, and the Private Sector worker a brain surgeon (really !).
That’s exactly what I was getting at but with one addition…..
Now take a Private Sector worker with very similar job ricks, experience, education, skills and knowledge as the Police officer. And what will we LIKELY find ?
Wages (cash pay) very comparable to the Police Officer, but an employer-sponsored retirement package TYPICALLY worth no more than $500,000 vs the Officer’s $1.8 Million.
That’s the taxpayer ripoff. There is ZERO justification for the Taxpayer paid-for share of the Officer’s pension to be ANY greater than that of the COMPARABLE worker. And with Police officer’s own contributions rarely accumulating to a sun at retirement sufficient to buy more than 15% of their VERY generous pensions, the Taxpayer funded share (85% x $1.8 Million) less the Private employer’s share (likely the full $500,000) is (0.85x$1,800,000)-$500,000 = $1,030,000.
Yes, over $1 Million in TAXPAYER money unnecessarily and with zero justification TAKEN to overcompensate the Police Officer.
——————————————-
Readers ….. so who’s BSing you ?
**************************************************
(2) Quoting SMD………
“Congratulations !! Your math shows that public workers have larger pensions than Private workers. We already knew that. But to claim these pensions are EXCESSIVE, you would need to show that these pensions, combined with wages, results in a higher total compensation for the public worker. You did not do that. You cannot do that with the information in your demonstration. ”
Police Officers do have jobs with a certain element of risk, but (per the US Gov’t B:LS ) Police work is not even on the list of the 10 most dangerous occupations. Intelligent people can make reasonable judgements as to the level of education, experience, skills, and knowledge required of Police work vs other occupations. Where I live, the lowest rank Officer (a “patrolman”) with just 5 years of experience ROUTINELY makes (in ALL of the dozens of surrounding communities) OVER $125K annually in BASE PAY (with several now over $135K annually). Only those like yourself (with an agenda) would believe that such a BASE PAY after only 5 years in a Private Sector job with equal risks and equal requirements as to education, experience, knowledge, and skills would pay such a salary.
So no, Police officer wages alone are HIGHER than almost all other “comparable” jobs, and ON TOP OF THAT, their pensions are 4.62 times greater than the pensions granted “comparable” Private Sector workers.
Your logic is impeccably WRONG.
Posted by S Moderation Douglas on June 8, 2017 at 4:44 pm
Ironically, at the lower level public jobs, requiring only a high school education, or less, the much higher pensions (and retiree healthcare) actually do result in higher total compensation for the public worker than for an equivalent prior worker. Again, your “math” does not show that, in and of itself, but the data does.
Got a problem with EQUAL?
Everyone in favor of decreasing the pensions and benefits for the lowest level public workers, raise your right hand. And, if EQUAL is the goal, everyone in favor of increasing the salaries of public sector doctors, attorneys, CPAs, and high level management… a show of hands.
Yeah, I didn’t think so. ,
Posted by Anonymous on June 8, 2017 at 6:57 pm
My hand is up.
There is ZERO justification to artificially pay Bluie Collar Public Sector workers more (In total compensation) than what the SAME job would pay in the Private Sector, such being an unjustified THEFT of Private Sector Taxpayer wealth.
If the lowest-paid Public Sector workers cannot mean the most basic needs, they should seek financial assistance through Social Service ….. just as would a similarly-situated Private Sector worker.
Posted by S Moderation Douglas on June 8, 2017 at 7:18 pm
Posted by Anonymous on June 8, 2017 at 8:04 pm
And, if EQUAL is the goal, everyone in favor of increasing the salaries of public sector doctors, attorneys, CPAs, and high level management… a show of hands.
You up for that, too?
Posted by Anonymous on June 8, 2017 at 8:56 pm
Absolutely, aAs long as their pensions are reduced (more likely eliminated in most cases) to Equal those in the Private Sector …..AND as long as Public Sector workers begin working the 60 hrs/week typical for such Private Sector professionals, AND they are equally “productive” (no more internet surfing).
EQUAL …. but NOT better.
Posted by Anonymous on June 8, 2017 at 9:01 pm
Am I up for that too?
Absolutely, as long as their pensions are reduced (more likely eliminated because MOST of those Private Sector professional don’t get pensions, only a 3% 401K match if they are lucky) to a level Equal to those in the Private Sector …..AND as long as Public Sector workers begin working the 60 hrs/week typical for such Private Sector professionals …… AND as long as their measurable work product (i.e., “productivity”) equals those in the Private Sector (e.g., no more schmoozing at the water-cooler, or internet surfing).
EQUAL …. but NOT better.
Posted by Anonymous on June 10, 2017 at 1:14 am
EQUAL …. but NOT worse.
Posted by Anonymous on June 10, 2017 at 10:03 am
Fine with me as long as it’s across the board for ALL jobs. For every 1 job where a Public Sector worker is found to be compensated less than their Private Sector counterpart, there will be 50 jobs where Public Sector workers are found to be overcompensated, and it is that VERY materiel NET ADVANTAGE that financially impacts Taxpayers unfairly.
Posted by S Moderation Douglas on June 10, 2017 at 11:01 am
1 in 50?
Posted by Anonymous on June 10, 2017 at 11:53 am
Me delusional ….or is it you ?
To repeat my above comment:
SMD,
( 1) responding to the quote…..
Here was my FULL comment (not surprising that cut out a small part to mislead the readers):
************************************************
“Good example …… but you forgot to mention that the likely Pubic Sector employee would be a Police Officer, and the Private Sector worker a brain surgeon (really !).
That’s exactly what I was getting at but with one addition…..
Now take a Private Sector worker with very similar job ricks, experience, education, skills and knowledge as the Police officer. And what will we LIKELY find ?
Wages (cash pay) very comparable to the Police Officer, but an employer-sponsored retirement package TYPICALLY worth no more than $500,000 vs the Officer’s $1.8 Million.
That’s the taxpayer ripoff. There is ZERO justification for the Taxpayer paid-for share of the Officer’s pension to be ANY greater than that of the COMPARABLE worker. And with Police officer’s own contributions rarely accumulating to a sun at retirement sufficient to buy more than 15% of their VERY generous pensions, the Taxpayer funded share (85% x $1.8 Million) less the Private employer’s share (likely the full $500,000) is (0.85x$1,800,000)-$500,000 = $1,030,000.
Yes, over $1 Million in TAXPAYER money unnecessarily and with zero justification TAKEN to overcompensate the Police Officer.
——————————————-
Readers ….. so who’s BSing you ?
**************************************************
(2) Quoting SMD………
“Congratulations !! Your math shows that public workers have larger pensions than Private workers. We already knew that. But to claim these pensions are EXCESSIVE, you would need to show that these pensions, combined with wages, results in a higher total compensation for the public worker. You did not do that. You cannot do that with the information in your demonstration. ”
Police Officers do have jobs with a certain element of risk, but (per the US Gov’t B:LS ) Police work is not even on the list of the 10 most dangerous occupations. Intelligent people can make reasonable judgements as to the level of education, experience, skills, and knowledge required of Police work vs other occupations. Where I live, the lowest rank Officer (a “patrolman”) with just 5 years of experience ROUTINELY makes (in ALL of the dozens of surrounding communities) OVER $125K annually in BASE PAY (with several now over $135K annually). Only those like yourself (with an agenda) would believe that such a BASE PAY after only 5 years in a Private Sector job with equal risks and equal requirements as to education, experience, knowledge, and skills would pay such a salary.
So no, Police officer wages alone are HIGHER than almost all other “comparable” jobs, and ON TOP OF THAT, their pensions are 4.62 times greater than the pensions granted “comparable” Private Sector workers.
Your logic is impeccably WRONG.
Posted by S Moderation Douglas on June 10, 2017 at 5:27 pm
“Where I live…”
Give them a break, they are only human.
Officer Vincent Aiello
“…I wanted to know Mrs. Smith who lives on Main Street.”
http://www.nj.com/news/index.ssf/2010/09/nj_police_salaries_rank_highes.html
Posted by S Moderation Douglas on June 10, 2017 at 1:50 pm
If Biggs and Richwine have any credibility at all, nationwide 60% of state workers have a Bachelor’s degree or higher, and all those employees total compensation is either roughly equal to or lower (often much lower) than equivalent private sector workers.
Where is your evidence that “For every 1 job where a Public Sector worker is found to be compensated less than their Private Sector counterpart, there will be 50 jobs where Public Sector workers are found to be overcompensated…”?
…………
Quoting TL…
“Now take a Private Sector worker with very similar job ricks, experience, education, skills and knowledge as the Police officer. And what will we LIKELY find ?”
Where do we find this worker? Certainly not a roofer or fisherman.
If I’ve told you once, I’ve told you a million times, don’t exaggerate.
Posted by Anonymous on June 10, 2017 at 3:48 pm
Quoting SMD …………….
“If Biggs and Richwine have any credibility at all……….”
Should we instead discount the work of these two PHD scholars and believe YOU …. a self-interested Public Sector retiree (scared that his pension might be JUSTIFIABLY decreased) whose work responsibilities included changing light bulbs ?
Posted by S Moderation Douglas on June 10, 2017 at 4:45 pm
Complete the sentence… “… nationwide 60% of state workers have a Bachelor’s degree or higher, and all those employees total compensation is either roughly equal to or lower (often much lower) than equivalent private sector workers.”
TL is the one who is happy to repeat the “23% advantage” but not to accept the underpayment of the higher cohorts, in wages as well as in total compensation.
Posted by Anonymous on June 10, 2017 at 5:46 pm
Quoting SMD……..
“TL is the one who is happy to repeat the “23% advantage” but not to accept the underpayment of the higher cohorts, in wages as well as in total compensation.”
See, there you go again, either misleading or knowingly lying (yup lying)…. because YOU KNOW that the 23%*-of-pay Public Sector total Compensation ADVANTAGE that I have referred to is the NET Public Sector ADVANTAGE …with both the over0compensated AND the under-compensated INCLUDED.
* with 2 factors that would lead to an even GREATER PUBLIC Sector advantage identified in that AEI Study:
(1) the highest pay & pensioned PUBLIC Sector employees …. Safety workers…. were not included, and
(2) the 23%-of-pay PUBLIC Sector advantage does NOT include what the study authors determined to be a VERY material financial advantage associated with the far greater PUBLIC Sector job security. In our home States of CA and NJ, had that been included, the 23%-of-pay would have risen to a PUBLIC Sector total compensation ADVANTAGE of 33%-of-pay in CA and 34%-of-pay in NJ.
Posted by Pennsylvania Pension Reform (PPR) – (1) Introduction | Burypensions Blog on June 10, 2017 at 10:04 pm
[…] whereas New Jersey politicians dawdle and deceive (primarily themselves), those in Pennsylvania just passed a pension reform bill and this is how it was summarized by the […]