Breaking News on NYS Teamsters Vote and MPRA Update

In checking the US Treasury’s MPRA website today we find that The Western State Office and Professional Employees Pension Fund withdrew their application on August 11 and the result of the New York State Teamsters Conference Pension Fund vote on suspending benefits was released. My prediction had been:

My guess, since there seems to be an effort to get ‘no’ votes, is 10,000 against, 5,000 for, and 20,000 not voting which means the benefit cuts get approved overwhelmingly, 25,000 to 10,000.

How close did I get?

From the letter announcing the results:

Here is the current status of the fifteen multiemployer plans (no new ones since our last update) that have applied to suspend benefits under MPRA:

91-6123695/001: Alaska Ironworkers Pension Plan IN REVIEW
94-1133245/001: Automotive Industries Pension Fund DENIED
14-6016608/001: Bricklayers and Allied Craftsmen Local 5 Pension WITHDRAWN
34-6666798/001: Bricklayers and Allied Craftsmen Local 7 Pension WITHDRAWN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 APPROVED
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 APPROVED
94-6076144/001: Western State Office & Professional Employees Pension WITHDRAWN

59 responses to this post.

  1. Posted by Tough Love on September 13, 2017 at 6:35 pm

    Nice guess !

    Reply

  2. So it seems as of this writing that few are approved……..

    Reply

  3. Posted by S Moderation Honestly on September 13, 2017 at 11:24 pm

    So someone who doesn’t vote has effectively approved it. Worse still, if the plan were estimated to require more than $1 billion in assistance from the PBGC to support retiree benefits at guarantee levels as a result of the plan’s insolvency, Treasury could override the participants’ vote and implement the suspensions anyway.

    The die is cast.

    Reply

    • Posted by Tough Love on September 13, 2017 at 11:33 pm

      Yes ………… and onward to PUBLIC Sector Plans !

      Given the collusion between the Public Sector Unions and our self-interested, vote-selling, contribution-soliciting Elected Officials, all screwing the Taxpayers with these ludicrously excessive pension (AND benefit) promises, VERY material reductions in the promises are both necessary and eminently justified.

      Reply

  4. Posted by Anonymous on September 14, 2017 at 12:36 pm

    I wonder who will set the standard for the upcoming cuts in public pensions? I believe the consultant in Kentucky recommended that everyone take a hit. Future employees, current employees, and retirees. Suggesting even a clawback of COLAs already paid out to current retirees.

    But the Governor says for those retired now, “we want to make sure those checks keep coming and the promises are kept.”

    It looks like, in the MPRA cases, cuts will hit all retirees, future and present, sometimes excluding those over a certain age, or those under a minimum pension.

    Most suggestions I’ve seen for public plan cuts would not affect anyone already retired. Which is comforting, I suppose, and compassionate, but does it make any sense? If you’re retired now, you keep your full pension, but if you retire after the cutoff date, your pension may be reduced by twenty percent?

    If your pension is $49,999, no cut, but if it is $100,000, a twenty percent cut?

    How will that work?

    Reply

    • Posted by Tough Love on September 14, 2017 at 1:28 pm

      The KY Legislators are already cowering to Public Sector Union pressure. Quoting from the article linked below …….

      “Frankfort Republicans say the recommendations from the PFM Group are merely a framework for overhauling the state retirement plans that are mired in unfunded liabilities totaling at least $35 billion. And legislators of both parties pledge they’ll preserve the benefits already promised to current workers and retirees.”

      https://www.ket.org/public-affairs/legislative-options-solving-public-pension-crisis/

      If they really meant that ….. and ESPECIALLY if “already promised” includes not reducing FUTURE service accruals …………. they may as well close up shop and just wait for insolvency to arrive.

      Seems that they don’t have the stomach to confront even EXTREME greed.

      Reply

    • Posted by Old Teacher on September 16, 2017 at 2:34 pm

      Annonymous,
      You stated: Most suggestions I’ve seen for public plan cuts would not affect anyone already retired. Which is comforting, I suppose, and compassionate, but does it make any sense? If you’re retired now, you keep your full pension, but if you retire after the cutoff date, your pension may be reduced by twenty percent?
      If your pension is $49,999, no cut, but if it is $100,000, a twenty percent cut?
      How will that work?

      I am trying to work as long as possible (I love my job), but could retire now if I absolutely had to. Can you cite where you found that information/speculation/suggestions about a possible full pension cutoff date and loss of pension? I have not seen it.
      Thank you.

      Reply

      • Posted by Anonymous on September 16, 2017 at 3:50 pm

        That particular quote came from Kentucky’s governor here…

        http://www.courier-journal.com/story/news/politics/2017/08/29/kentucky-pension-crisis-could-my-benefits-be-cut/608377001/

        But no, it’s just a general impression that those already retired should be protected from cuts, legally and ethically. But it is by no means guaranteed. Especially in Kentucky.

        Reply

        • Posted by Old Teacher on September 17, 2017 at 1:43 pm

          Anonymous,
          Thank you for your thoughtful reply.

          Reply

          • Posted by Anonymous on September 17, 2017 at 5:12 pm

            I hope Old Teacher understood that. There are thousands of different pension plans in the country, sometimes wildly different in their benefit levels and in their governance. You have to know your own specific system.

            Even then, hope for the best and plan for the worst.
            ………………………………………………………
            Addendum:
            The situation Old Teacher refers to is a factor in Kentucky reform, in that teachers eligible for retirement are considering leaving before “possible” reforms which may reduce their pensions.

            Said Governor Bevin, a Republican:
            “Frankly, if a teacher thinks so little of their responsibility and their obligation to their students and the families that they’re responsible to that they would literally walk out on their classroom, in their own self-interest, that’s an unfortunate decision I would certainly hope that a teacher would not make,”
            …………………
            Seriously? We intentionally shorted contributions for years, now you should gladly take a cut in pensions?
            ……………………..
            “But I will say this,” he said. “If you happen to be a teacher who would walk out on your classroom, in order to serve what’s in your own personal best interest at the expense of your children, you probably should retire. I’m being completely serious. If that’s truly where you are at this stage in your career, I wouldn’t suggest that being in a classroom is probably the best use of your time.”

      • Posted by Anonymous on September 16, 2017 at 6:09 pm

        Or New Jersey

        Reply

      • Posted by Tough Love on September 17, 2017 at 2:09 pm

        Anon,

        The situation is getting dire in a lot of places, and because “kick-the-can-down-the-road” has been the go-to “NON-solution”, NOT making cuts in retiree pensions in the upcoming reforms, doesn’t mean they will not happen at a later date ………… so you should make your retirement decisions accordingly.

        Some reading not colored by rosy Union opinions:

        http://www.mauldineconomics.com/frontlinethoughts/pension-storm-warning

        Reply

        • Posted by Anonymous on September 17, 2017 at 9:59 pm

          Mauldin:

          “We hear stories about retired police chiefs and teachers with lifetime six-digit pensions and so on. Those aberrations (if you look at the national salary picture) are a problem, but the more distressing cases are the firefighters, teachers, police officers, or humble civil servants who served the public for decades, never making much money but looking forward to a somewhat comfortable retirement. How do you tell these people that they can’t have a livable pension? We will see many human tragedies.”

          Reply

          • Posted by Tough Love on September 18, 2017 at 12:16 am

            Yes, that came right form my linked article above, as did these:

            (1) Say a corporation goes bankrupt. A court will take all its assets and decide how to divvy them up. The assets are easy to identify: buildings, land, intellectual property, cash, etc. The parties may argue over their value, but everyone knows what the assets are. They won’t walk away. Not so in a public bankruptcy. The primary asset of a city, county, or state is future tax revenue from households and businesses within its boundaries. The taxpayers can walk away. Even without moving, they can bypass sales taxes by shopping elsewhere. If property taxes are too high, they can sell and move. When they take a loss on the sale, the new owner will have established a property value that yields the city far less revenue than it used to receive.

            (2) Here in Dallas I pay about 2.7% in property taxes. When I bought my home over four years ago, I checked our local pension and was told we were 100% funded. I even mentioned in my letter that I was rather surprised. Turns out they lied. Now, realistic assessments suggest they will have to double the municipal tax rate (yes, I said double) to be able to fund fire and police pension funds. Not a terribly popular thing to do. At some point, look for taxpayers to desert the most-indebted cities and states. Then what? I don’t know. Every solution I can imagine is ugly.

            (3) I have had meetings with trustees of various government pensions. Many of them want to assume a more realistic discount rate, but the politicians in their state literally refuse to allow them to assume a reasonable discount rate, because owning up to reality would require them to increase their current pension funding dramatically. So they kick the can down the road. Intentionally or not, state and local officials all over the US made pension promises that future officials can’t possibly keep. Many will be out of office when the bill comes due, protected from liability by sovereign immunity. We are starting to see cities filing for bankruptcy. That small ripple will be a tsunami within 7–10 years.

          • Posted by Anonymous on September 18, 2017 at 12:33 am

            Mauldin:

            “Total unfunded liabilities in state and local pensions have roughly quintupled in the last decade. You read that right – not doubled, tripled or quadrupled: quintupled. That’s nice when it happens on a slot machine, not so nice when it’s money you owe.

            You will also notice in the chart that much of that change happened in 2008. Why was that? That’s when the Fed took interest rates down to nearly zero, meaning it suddenly took more cash to fund future payments. Also, some strapped localities conserved cash by promising public workers more generous pension benefits in lieu of pay raises.”

            Why was that again?

          • Posted by Tough Love on September 18, 2017 at 1:12 am

            And a few more quotes from that article:

            (1) “Many police and fire pensions are based on the last three years of income; so in the last three years before they retire, these diligent public servants work enormous amounts of overtime, increasing their annual pay and thus their final pension payouts.”

            I believe that’s called “spiking”.

            (2) “On the other side will be homeowners and small business owners, already struggling in a changing economy and then being told their taxes will double.”

            Is that fair …. just so that Public Sector workers can get pensions multiples greater in value upon retirement than those called upon to pay for it (the Taxpayers)?

            (3) “Some courts in some states will require taxes to go up. But courts don’t have taxing authority, so they can only require cities to pay, but with what money and from whom?”

            Yup, that the case in NJ.

            (4) “Intentionally or not, state and local officials all over the US made pension promises that future officials can’t possibly keep.”

            I’ve been saying exactly THAT for a long time ……….. and it’s the ROOT CAUSE of the pension mess.

          • Posted by S Moderation Honestly on September 18, 2017 at 1:12 pm

            Not exactly.

            Semantics 101… “Affordable” pensions is not the same as “fair” pensions.

            Mauldin…

            “Also, some strapped localities conserved cash by promising public workers more generous pension benefits in lieu of pay raises.”

            “In lieu of pay raises”, i.e. “Deferred compensation”. I’ve been saying exactly that for a long time.

            SMH

          • Posted by Tough Love on September 18, 2017 at 1:38 pm

            SMH, In the “REAL” world, when a company (i.e., an employer) has zero money for raises then, under a PROPER analysis, they also have no money for increased deferred compensation.

            If a Town/City etc. “has no money for raises”, is also has no money for increased deferred comp …. and it should not promise it.

            But since Elected Officials know that THEY will likely no longer be there when the bill comes due (and are ironclad protected from personal liability) they do so anyway.

            TONS of Private Sector workers gets no raises years after year (because the companies they work for are no very profitable) and those companies DON’T make stupid deferred comp promises they KNOW they won’t be able to keep.

            If you don’t like the pay ………. quit.

          • Posted by Earth on September 18, 2017 at 1:42 pm

            Earth to SMH:

            Aw, heck. That’s what I was gonna say.

            Shakin’ My Head

          • Posted by S Moderation Honestly on September 18, 2017 at 2:08 pm

            TL, also in the real world… Government is not like a business, and should not be run as if it were.

            “The problem in a nutshell, is that not everything that is profitable is of social value and not everything of social value is profitable.”

            https://www.forbes.com/sites/johntharvey/2012/10/05/government-vs-business/#413aa1a12a54
            ::::::::::::::::::::::::::::::::
            Tons of public workers also get no raises year after year. Many “don’t like the pay”…… and they do quit. The median tenure of public employees is 7.7 years.

            Government and the private sector draw from the same pool of applicants. Compensation must be competitive.

            SMH

          • Posted by Tough Love on September 18, 2017 at 4:06 pm

            Quoting SMH…….

            “Government is not like a business, and should not be run as if it were.”

            Wrong, and that thinking is the underlying reason for the financial mess in which many States & Cities now find themselves.

            While not having the goal of making a profit*, Gov’t most definitively SHOULD be run like a BUSINESS from the EXPENSE side, and MOST IMPORTANTLY, there is ZERO reason to compensate Gov’t workers more than they would be compensated in a Private Sector job with comparable “risks” and requiring reasonably comparable experience, education, skills, knowledge, and know-how.

            * while “profit” is not a gov’t sector goal, it is absolutely appropriate to structure a CIty’s affairs to MINIMIZE taxes while providing the services that the majority of it’s residents are willing and able to pay for. And doing so means outsourcing services where appropriate and cos-effective, NOT employing more workers than absolutely necessary, and not overcompensating those that you do employ.

  5. Posted by S Moderation Honestly on September 14, 2017 at 3:19 pm

    I reckon there’s no need to debate (again) about how accurate, or up to date, Biggs state by state study is. There appears to be divine faith in the 23% advantage in CA and NJ, and skepticism about anything else. But he did rate KY as “market level” compensation, based on data from 2008-2012. That was before reforms were passed in 2013 and enacted in 2014.

    And now, apparently, the legislators are “cowering” and “don’t have the stomach to confront even EXTREME greed.”??

    Do you just automatically assume all public employees are overpaid and GREEDY*, or do you just not think before you rant?

    *or all Elected Officials are self-interested, vote-selling, and contribution-soliciting?

    SMH

    Reply

    • Posted by Tough Love on September 14, 2017 at 4:41 pm

      A few weeks ago in a comment on KY I forgot to check that AEI Study for the Public/Private Sector Total Compensation differential specifically in KY. So as they say, ooophs I did it again.

      Indeed, in that AEI Study, KY only show a 4%-of-pay Public Sector Total Compensation advantage. Not trivial because if saved and invested over one’s career it might end up in the $100K to $200K range upon retirement (who wouldn’t like having that additional assets?) but certainly NOTHING LIKE the 23%-of-pay Public Sector Total Compensation advantage in BOTH CA and NJ……….. when EXTREME GREED is right on the money.

      That extra 23%-of-pay if saved and invested every year would EASILY generate $500K or $1 Million, and for some, perhaps even an additional $2 Million…..a good proxy for the excessive funds now unjustifiably shoveled from Taxpayer pockets into Public Sector worker pockets.

      Thanks for letting me remind the reader in NJ of this EXTRAORDINARY taxpayer ripoff.

      Reply

      • Posted by S Moderation Honestly on September 14, 2017 at 11:18 pm

        Thou art incredible, as in, not credible. One of the reasons I always recommend Biggs is the detail he goes into in methodology. 4% and 23% are averages. Subject to data error, calculation error, subjective interpretation by the researcher, bias, etc., etc.

        Andrew Biggs, to a House Oversight Committee… ” I find an average federal salary premium of not 2 percent but of about 14 percent. My point is not that 2 percent is “wrong” and 14 percent is “right,” but rather that there is a range of reasonable answers found in studies of federal salaries and the CBO’s result is likely toward the lower end of that range.”

        12 points difference is a reasonable range? Taxpayers, what would YOU do with an extra 23% income??? Hypothetical income is not legal tender. You can’t “take it to the bank”. Its not “take-home pay. It’s not income, it is “ifcome”.

        As it was in the beginning, is now, and ever shall be, some public workers earn more than the private sector, some earn less, and it logically follows that, between these extremes, there is a cohort of public employees whose compensation is roughly equivalent. Not “EXTREME GREED”. Not “GREED”. Not even “greedy”.

        So as they say, ooophs you did it again.

        SMH

        Reply

        • Posted by Tough Love on September 15, 2017 at 12:12 am

          What a load of s-t-r-e-t-c-h-i-n-g to distance yourself from UNCOMFORTABLE study results where the 23% PUBLIC Sector Total Compensation “advantage” is in the CENTER of the expected range ……. making it EQUALLY likely to be higher as well as lower (than the 23% advantage shown).

          Oh …… and had Safety workers (with the highest average wages and richest pensions) not be EXCLUDED from the AEI study, assuredly that 23% PUBLIC Sector Total Compensation “advantage” would be even greater…… perhaps significantly greater.

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

          You should stick to light-bulb-changing. It’s less taxing on the brain.

          Reply

  6. Posted by Anonymous on September 14, 2017 at 4:56 pm

    The ball is starting to roll downhill now …..CalPERS Slashes Pension Payments To Retirees In Two More California Towns By Up To 90% ….http://www.zerohedge.com/news/2017-09-13/calpers-slashes-pension-payments-retirees-two-more-california-towns-90

    Reply

    • Posted by George on September 14, 2017 at 6:14 pm

      I am curious as to why there haven’t been any lawsuits by the affected workers. Maybe the amounts are not large enough to pay a lawyer, or perhaps they are being paid by the towns on a pay as you go basis? What happened to their health care?

      Reply

      • Posted by S Moderation Honestly on September 14, 2017 at 11:10 pm

        “Loyalton City Council members told CalPERS officials in November that the city would directly reimburse retirees for the pension money they lost — $5,000 a month for all four retirees combined.

        But that promise may be short-lived. The City Council has been providing those supplemental payments since CalPERS sliced the city retirees’ pensions, and it has voted to continue those payments until November. After that, the payments may be reduced — or cut off entirely.”

        http://www.latimes.com/politics/la-pol-ca-loyalton-calpers-pension-problems-20170806-htmlstory.html

        Perhaps then we will see if there is a lawsuit. Loyalton had/has a contract guaranteeing pensions. CalPERS was just an agent. The city still owes the money, IMHO.

        Reply

        • Posted by Tough Love on September 15, 2017 at 12:16 am

          Since when is your opinion “humble”?

          Reply

          • Posted by S Moderation Honestly on September 15, 2017 at 2:34 am

            Moderation… it’s not just a name. It’s a way of life.

            SMH

          • Posted by Tough Love on September 15, 2017 at 1:37 pm

            And ………..

            “EQUAL but not better …… on the Taxpayers’ dime!”

            is better than the vague “moderate”, because it’s very clear, it’s just, and it’s fair.

          • Posted by S Moderation Honestly on September 15, 2017 at 2:23 pm

            Not better.

            You want “equal”, you will need a couple of these…

            https://www.tacc.utexas.edu/systems/stampede

            And…

            Much better data.

            And…

            Autocratic authority.

            Welcome to the brave new world.

            You have a very simplistic pipe dream. It will work… on paper.

            “There are more things in heaven and earth, TL, than are dreamt of in your spreadsheet.”

            SMH

          • Posted by Tough Love on September 15, 2017 at 2:49 pm

            SMH,

            In YOUR, not-moderate, not-humble opinion.

          • Posted by S Moderation Honestly on September 15, 2017 at 5:13 pm

            “EQUAL but not better …… on the Taxpayers’ dime!”

            And other nonsense…

            From a CBO report… “Comparing the Compensation of Federal and Private-Sector Employees, 2011 to 2015”

            “Overall, the federal government would have reduced its
            spending on wages by 3 percent if it had decreased the
            pay of its less educated employees and increased the pay
            of its more educated employees to match the wages of
            their private-sector counterparts.”

            And that is just wages. Benefits are even more extreme.

            Try to find popular support for decreasing the compensation of public sector laborers and clerks, while increasing compensation for the lawyers and managers.
            ………………………………………………………………….
            Are the CBO report’s conclusions correct?

            Andrew Biggs…
            “The CBO’s conclusions are unquestionably reasonable. If the report’s authors were to submit it to an academic journal—and there have been many academic reports published on federal pay over the years—it would be taken very seriously. In most technical aspects, the CBO’s report is the finest and most advanced study of federal employee compensation ever produced. It uses better sources of data and more advanced methods than studies that have been published in academic journals.”

            (unquestionably reasonable, But…)
            ………………………………………………………………………..

            IF…
            some of the greatest minds in economics, with the best available data, cannot agree, even within 10 to 12 percent, on the compensation differences.
            AND…
            Truly “equal” public/private compensation would require decreasing compensation at the lower end, and increasing the higher end*, “equal” is a non-starter.

            *There are actually very good social and economic reasons to keep public compensation higher at the low end, and lower at the high end. These will not show up on spreadsheet. It requires applying common sense and good judgement to the data.

            (In my opinion, of course)

            SMH

          • Posted by Tough Love on September 15, 2017 at 5:31 pm

            SMH, If you REALLY want to know what’s true, it’s the my Quoting Federal_license in my comment below:

            ““What we have in this piece are special interest propagandists defending the status quo. They know that the pensions are far too generous and if the true liability were provided for in the period of service delivery the public would see enormous magnitude of the pension bill, taxes would need to be increased even more than the insanely high levels they are at already and other government functions would necessarily be cut and/or totally eliminated. These propagandists are trying to buy time but the day of reckoning is coming, it’s just a slow-motion train wreck for now.””

          • Posted by Tough Love on September 15, 2017 at 6:07 pm

            SMH, What is it that you can’t (or REFUSE to) understand ……….

            When ALL (yes ALL) workers are combined, CA and NJ’s Public Sector workers (excluding Safety workers) have a 23%-of-pay Total Compensation ADVANTAGE, an advantage that rises (per Mr. Biggs) to 33%-of-pay when the financial impacted of the far greater Public Sector job security is properly factored in…….. and assuredly even greater had Safety workers who have far higher than average wages and far richer pensions been included in the AEI study.

            The financial impact upon taxpayers comes from ALL workers taken together, and splits by income category are financially irrelevant.

            That 23% (or 33%)-of-pay PUBLIC Sector ADVANTAGE is enormous………. and translates into UNNECESSARILY granting EVERY full career Public Sector worker an EXTRA $500,000, $1 Million, or even $2 Million for some.

            It’s nothing but THEFT ……….. no matter how you spin it.

          • Posted by Tough Love on September 15, 2017 at 6:52 pm

            Yes, SMH,

            THEFT. Theft arising from the Public Sector Unions’ successfully BUYING of the favorable votes (on Public Sector pay, pensions, and benefits) of our self-interested, vote-selling, contribution-soliciting Elected Officials with BRIBES disguised as campaign contributions and election support.

            And with the Public Sector Plan PARTICIPANTS being the financial beneficiaries of that collusion, THAT is where Taxpayers must rightfully go to right this HUGE “wrong”, by VERY materially reducing these ludicrously excessive pension/benefit “promises”.

          • Posted by Earth on September 15, 2017 at 8:44 pm

            Earth to TL:

            You are repeating yourself, and you were wrong the first thirty times.

          • Posted by Tough Love on September 15, 2017 at 10:20 pm

            So SMH,

            When you have no reasonable response, YOU respond with under of YOUR other handles.

            You’re not fooling anyone.

          • Posted by S Moderation Honestly on September 16, 2017 at 1:18 am

            Au contraire mon frère.

            Earth is merely saying it like it tis. Don’t shoot another messenger.

            What is it that you can’t (or REFUSE to) understand ……….?

            You want your alleged 23 percent? You want EQUAL?

            Start at the bottom. Take away retiree healthcare. Take away all employer provided pensions except Social Security. In some cases, reduce wages. They will then be roughly equal to similar private sector workers. You have said so yourself. Got a problem with equal?
            Once you have removed pensions and OPEBs from all the high school level jobs, and maybe the “some college” cohort, you will have your 23%. You will have remaining the middle group of workers who are “roughly equal” (as in “not greedy”) and the lawyers and managers who are still underpaid, even with their so-called exorbitant pensions.

            SMH

          • Posted by Tough Love on September 16, 2017 at 1:57 am

            Yes SMH (aka “EARTH”), I’d like to see EQUAL but NOT better Public/Private Sector Total Compensation, and that 23%-of-pay Public Sector Total Compensation advantage in both CA and NJ is nothing but a THEFT from the Taxpayers.

            Quoting ….”Take away Retiree health”

            A good start since since it’s quite rare in the Private Sector.

            Quoting …. “Take away all employer provided pensions………”

            No. we only need about 50% reductions (75% for Safety workers) to bring Public Sector pensions into line with those typically granted in the private Sector.

            Quoting ….. “In some cases, reduce wages. ”

            Yes, and in some case we’ll need to raise them .

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

            You STILL don’t (or REFUSE to) get it. What FINANCIALLY impacts taxpayers is the net difference in Public/Private Sector Total Compensation …. from ALL workers taken together. And right now, it’s a 23%-of-pay Public Sector Total Compensation advantage in BOTH your and my home States of CA and NJ.

            And, you’d be screaming bloody murder (with 10,000 mad-as-hell red shirted Union member behind you) if the situation were flipped and the Private Sector had that advantage.

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

            Yes …………. EQUAL, but NOT better on the Taxpayers’ dime !

          • Posted by S Moderation Honestly on September 16, 2017 at 3:48 am

            50% reduced pension for the janitor and he is still overpaid.
            50% reduced pension for the lawyer and he is underpaid even more than before.

            Do you deny that? Do you want equal, or not?

            Rip off the bandage. Take the pensions only from those who are overpaid. You’re not politically correct. You can do it. Grow a pair.

            Take a janitor at DMV who retires after 40 years with healthcare, $30,000 pension, and Social Security. A private sector janitor makes the same wages, with only Medicare and SS.

            You “only need about 50% reductions”? So the janitor “only” gets $15k a year more than the private sector janitor ?

            That’s “equal” in your world? You want your 23%, and you want “equal”, you have to start at the bottom. Ask Willy Sutton. You want 23% ? That’s where the money is.

            SMH

          • Posted by Tough Love on September 16, 2017 at 4:49 am

            SMH (Earth, SMD, SMA, Anon, whoever),

            I represent Taxpayer interests. I don’t really care how Public Sector Total Compensation is divided up amongst you moochers………… as long as in total for ALL of you combined it’s equal to but not greater than that of comparable Private Sector workers.

            We don’t work for you.
            *********************************************

            And it’s not 23%. When you recalculate with (AEI Study omitted) Safety workers included in the comparison, it’s greater, perhaps a lot greater.

          • Posted by S Moderation Honestly on September 16, 2017 at 12:15 pm

            Shirley you jest. You “represent” the willingly misinformed fanatic fringe. You use the large salaries and pensions of professionals to foment jealousy and anger when you know (now, thanks to Moderation and AEI) that your alleged public sector “average” advantage is driven by some of the lowest ranks of public employees. Decent pay and benefits and more equal opportunities for women and minorities. It is a good model for private employers to emulate.

            This is where the public costs are highest, compared to private sector jobs, and you “don’t really care how Public Sector Total Compensation is divided up”?
            Does this mean you “don’t really care” about “EQUAL” ?
            Hypocritical, is it not?

            SMH

          • Posted by Tough Love on September 16, 2017 at 1:36 pm

            SMH,

            How about I put it this way. I (and other Taxpayers) should not be called upon to pay more in taxes to support Total Compensation for Public Sector workers (all of them taken together, because THAT is what financially impacts the Taxpayers) than those Public Sector workers would be compensated if doing the SAME job in the Private Sector …… AND work as many hours (on average) and are equally productive.

            The latter word are there because many years of observing “professionals” in the Private Sector shows that 50-60 hours weeks (without “overtime”) are commonplace, and I simply do NOT believe (nor have I observed in gov’t audit situations) that such hours commonplace among Public Sector professionals. If you work fewer hours (or are less “productive”) you SHOULD get lower wages, and getting a lower wage to reflect few hours (or being less “productive”) does NOT constitute being paid less than your Private Sector counterparts.
            ********************************

            And as to your rant…………….

            Example: No offense meant to Public Sector janitors (that position chosen for example only), but It’s the PRIVATE Sector where 85% of all people work that sets “market rate” compensation, not the PUBLIC Sector where self-interested Politicians and Union money have huge distorting effects on normal market forces. In Total Compensation, janitors in the Public Sector likely make 2+ times what Private Sector janitors earn. There is ZERO justification for Taxpayers to pay for this through higher than necessary taxes. And I don’t buy the argument that such compensation is “necessary” to provide for a minimum standard of living while working and when retired. If “market-rate” janitorial compensation …. as determined by PRIVATE Sector standards………, is not sufficient to meet a Gov’t janitor minimum needs (food, shelter, clothes, healthcare, housing, etc.) they should have to do the SAME thing that a PRIVATE Sector janitor would do in such a situation, seek assistance through Social Services.

            And if you need another example………. why does a NYC subway Token booth clerk make in total Compensation 2+ times that of a major bank teller with FAR greater responsibilities.

            *************************************************************************************
            The financial abuse of Private Sector taxpayers in unnecessarily over-compensating Public Sector workers is a MUCH bigger problem than most realize. It is manifesting itself in materially underfunded Pensions everywhere, underfunded because raising the TRUE amount of money needed to properly fund this ludicrously generous level of pensions (that have been BOUGHT from our Elected Official with Public Sector Union BRIBES disguised as campaign contributions and election support) can ONLY be achieved via massive tax increase or massive additional cuts to essential services.

            The 1-st step in getting out of a deep financial hole is to STOP DIGGING.

            All DB Plans must be hard frozen (zero future growth). and all CURRENT workers must be switched to 410K-style DC Plans for their future service, with a Taxpayer contribution “match” no greater than what the typical Private Sector worker gets from his/her employer.

          • Posted by Anonymous (NOT Earth... the other Anonymous) on September 16, 2017 at 1:49 pm

            What is a 410K, and why are e picking on janitors now?

          • Posted by Tough Love on September 16, 2017 at 3:50 pm

            Dictionary by Merriam-Webster:

            “A 410K is usually a typo for a 401K Plan. In most cases, the person inquiring knows that already, but is just a rather low-IQ troublemaker”

          • Posted by Earth on September 17, 2017 at 12:02 am

            Earth to… whomever it may concern:

            That would be 401(k), according to the IRS, but who’s quibbling?

            Merriam-Webster, it appears you’re due for another audit.

  7. …and is there a reason already retired pensioners can’t take modest cuts based on how much they are receiving as in a 30K pension should take less of a cut than someone receiving a 100k pension………is KY like NJ in that the state picks up the cost of the Medicare premiums and reimburses the retirees? Maybe cut that out to start….

    Reply

    • Posted by Tough Love on September 14, 2017 at 6:56 pm

      Here’s a suggestion………..

      Even when a Private Sector worker gets a Final Average Salary DB pension (getting quite rare among single-employer Corporate sponsored Plans these days) it VERY VERY VERY VERY rarely includes provision for COLA increases.

      Sure, Private Sector workers get Social Security that is COLA-increased, but Social Security benefits (even for new recipients) average around $20K annually.

      Public Sector workers should NOT be granted a better deal on the Taxpayers dime. If they do get SS, their pension should NOT be COLA-increased, and if they do not get SS only the first $20K of their pension should be COLA-increased.

      EQUAL but not better …… on the Taxpayers’ dime!

      Reply

  8. Posted by Earth on September 15, 2017 at 12:17 am

    Earth to TL:

    “I forgot.” again?

    Reply

  9. Posted by Tough Love on September 15, 2017 at 2:22 pm

    Here is an interesting article written by 3 CA Union Officials (McTighe is president of Retired Employees of San Diego County. Baross is president, City of San Diego Retired Employees’ Association. Hall is president, City of San Diego Retired Fire and Police Association.).

    The title is …. “Why full funding of pensions is a waste of money”

    Essentially, under the argument that City’s “never end”, it attempts to justify paying for pension out of current revenue with no pre-funding.

    I recommend reading it as well as it’s comments. One paragraph from a comment (by federal_license) most “on-the-money” is:

    “What we have in this piece are special interest propagandists defending the status quo. They know that the pensions are far too generous and if the true liability were provided for in the period of service delivery the public would see enormous magnitude of the pension bill, taxes would need to be increased even more than the insanely high levels they are at already and other government functions would necessarily be cut and/or totally eliminated. These propagandists are trying to buy time but the day of reckoning is coming, it’s just a slow-motion train wreck for now.”

    Reply

  10. Posted by George on September 15, 2017 at 2:26 pm

    When Studebaker defaulted the UAW was actually a powerful organization, so it really did change peoples thinking, and the trade unions were a force back then so somebody paid attention for a while. I don’t think NYS Teamsters default was unexpected nor will it change much. The towns exiting CALPERS might change thinking, more likely it will be made impossible to leave. If Kentucky claws back COLAS that might be a big deal.

    The Packard termination convinced UAW president Walter Reuther that the union needed to protect its members from default risk. In the early 1960s, the UAW devised a remedy – a proposal for “pension reinsurance” – that is a precursor of the termination-insurance program created by Title IV of ERISA. The Studebaker shutdown gave the union an opportunity to move default risk and termination insurance onto the legislative agenda. The success of this effort in agenda-setting indelibly linked Studebaker to the cause of pension reform.

    https://papers.ssrn.com/sol3/papers.cfm?abstract_id=290812

    Reply

    • Posted by PS Drone on September 18, 2017 at 7:37 pm

      And, of course, there were no unforeseen negative impacts from forcing sponsors of DB plans (in the private sector only since ERISA only applied there) to pay a penalty in the form of PBGC premiums. ERISA directly led to the demise of countless DB plans in favor of cash balance plans or some form of DC plan. Our wonderful Congress at work once again.

      Reply

      • Posted by Tough Love on September 19, 2017 at 12:57 am

        I don’t think you are accurately describing ERISA.

        ERISA requirements (the PPA, and others that followed) are there to make “reasonably sure” (noting that noting is “certain”) that promised Private Sector pensions (at least under Single-employer Corporate sponsored* Plans) would be appropriately funded.

        Because the PBGC was set up to “insure” a specified level of pension benefits if a covered Plan failed, and because the US Treasury was NOT supposed to subsidize the PBGC, it was (and remains) appropriate for the PBGC to charge an insurance premium consistent with the risk of Plan failure and payout under PBGC terms.

        MANY many Private Sector Plans have been frozen, but not many due to PBGC insurance Premiums, that being a minor component of the total employer cost of such Plans.. Many of the Plans that have frozen benefits did so for a variety of reasons:

        (1) Private Sector employment in the America changed radically starting in the 1980s. Before that many people spent there whole careers with one employer where BACK-LOADED Final average Salary formulas made sense. In those days one’s “value” was measured in “experience” slowly gained over many years with one employer. Starting in the 1980s, with PCs showing up on everyone’s desk we quickly moved from a society that valued “experience” to one that valued “skills” (computer skills), and advancement was easier & quicker by taking those skills from employer to employer to employer. DB Plans offered VERY little “value” to employees that did not expect to remain at one company for decades …. and VERY few of them assumed they would.

        (2) Interest rates were VERY high in the very early 1980s, making DB pensions rather cheap to the employer. Interest rates have steadily declined and are now (since 2009) at lows not seen since the end of WWI. Employers have to contribute MUCH more than they anticipated when setting up their Plans. Bottom line….. they are now simply too expensive to provided the level of income replacement in retirement that employees think is necessary.

        (3) Companies have far shorter life spans than they did years ago, With mergers and acquisitions endlessly changing ownership, legacy DB pensions (especially when not fully funded) become a big problem…… better to get rid of it.

        (4) New technology companies chose to reward workers with bonuses and (for some) Stock options. DB Plans were “old school” and certainly not on the radar of right-out-of-college techies. And with those companies NOT having the financial burden of expensive DB Plans, they had a competitive advantage over the old-school employers still stuck WITH DB Plans …. think IBM, which successfully froze them (converting to Cash balance Plans and later to DC Plans) but fought legal challenges for over a decade.

        Reply

  11. Posted by S Moderation Honestly on September 15, 2017 at 4:23 pm

    New York State Teamsters.

    “Active workers’ benefits will be cut by 18 percent, while retirees’ benefits will be cut by 29 percent. There will be no cuts, or cuts of lesser amounts, for participants who are receiving disability benefits or who are 75 or older.”

    For those who voted “no”, I don’t know how they expected to continue pensions without cuts. Even with these cuts, as I understand, the system is far from “secure”.

    Reply

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