The National Institute on Retirement Security (NIRS) was charged by their public employee union clients to come up with a report to try and scare states away from moving their employees from Defined Benefit to Defined Contribution plans. This is what they came up with and, after reviewing what presumably are the facts they want you to know, an honest interpretation arrives at exactly the opposite conclusion.
The underfunding of these plans was caused by a variety of factors, including poor funding decisions by elected officials, Mercer Inc., the state’s actuary, had made inaccurate actuarial projections and then attempted to hide them from the state. The firm had recommended the state contribute less to the plans than what was actually needed. This error alone contributed to $2.5 billion of the state’s unfunded liabilities. The state of Alaska sued in December 2007, seeking $2.8 billion in damages. Ultimately, Mercer and the State of Alaska settled for $500 million. (page 3)
Despite this significant infusion of the state’s financial resources, the combined unfunded liability for pension benefits was higher in 2017 ($6.3 billion) than it was in 2005 ($4.1 billion). Closing the plans did not reduce the unfunded liability. Alaska has managed to improve the funded status of both plans modestly –from 65.7 percent to 66.7 percent in PERS and from 60.9 percent to 75.9 percent in TRS– but this is due almost entirely to the $3 billion contribution. (page 4)
The adoption of the cash balance hybrid plan was a distraction from the real issue in a state that has a history of underfunding its pension plans. (page 7)
When the SERS defined benefit plan closed in 1997, the plan was actually overfunded with 109 percent of assets available to cover all liabilities ($734 million in excess assets, to be exact).38 As of September 30, 2017, the plan was 66.5 percent funded and had an unfunded liability of $6 billion. (page 11)
What is conveniently missing from the NIRS analysis is that Defined Contribution plans have to be 100% funded. For example in Alaska the unfunded liability may have increased in dollar terms but the funded percentages went up for the Defined Benefit Plans to about 70% and, when the fully funded Defined Contribution plans are included, would total about 80% for the system.
On account of the politician/actuary cabal that consistently understates Defined Benefit contributions these plans are going bankrupt. What is it about the Defined Contribution concept that the unions and NIRS despise? The transparency?
Burypensions Blog 
Posted by Tough Love on August 10, 2019 at 1:59 pm
Quoting …………..
“On account of the politician/actuary cabal that consistently understates Defined Benefit contributions these plans are going bankrupt. What is it about the Defined Contribution concept that the unions and NIRS despise? ”
Oh, THAT’s an easy one………….
They VERY clearly understand the extraordinary generosity (and hence cost) of typical Public Sector Final Average Salary Defined Benefit Pension Plans ……… with a TRUE normal cost requiring a level annual Total (ee + er) contribution of 25% to 40% pf pay (rising to 40% to 60% for the far more generous Safety worker pensions) to fully fund over the worker’s career.
And with the Private Sector workers mostly getting no more than a 3% of pay contribution into a 401K Plan, THEY REALIZE that the Taxpayers WOULD NOT STAND FOR Public Sector Defined Contribution Plans with anywhere near the generosity of their current DB Plans. .
——————
In short…………… the “moochers” want to keep MOOCHING !
Posted by Tough Love on August 10, 2019 at 3:00 pm
And the “enablers” (our self-interested Elected Officials), knowing how much LOWER IN GENEROSITY a DC Plan would have to be in order to be acceptable to Taxpayers, are too fearful of Union threats (to back other candidates) and loss of Union campaign contributions to even consider such a switch.
Posted by E on August 10, 2019 at 4:12 pm
Says the jealous one. What a dipshit.
Posted by Tough Love on August 10, 2019 at 4:27 pm
Figured you’d “show up” with more of your complaining about what amounts to nothing but STRONG ADVOCACY against your ludicrously excessive pension & benefits.
————————
Tell me moocher ………… was my analysis in my above comment not accurate ?
Posted by PaulB on August 11, 2019 at 10:08 am
Here in the Bay Area, there are a couple of affluent suburban communities that never signed up for the state’s (Calpers) defined benefit plan for their employees. One I’m familiar with provides 10% payment off the top into a 403b plus a 100% match on the first 5% of the employee’s contribution. Compared to private sector plans, this is extravagant, but is widely viewed in the community as a great deal for taxpayers compared to what most communities have to contribute to Calpers, not to mention how much more they will be giving in just a few years.
Posted by Tough Love on August 11, 2019 at 10:17 am
That consistent with what I have been saying ………….
That Public Sector 15% (10% + 5%) of pay ALONE is 5 times the 3%-of-pay that is typical as a Private Sector employer contribution into a 401K Plan ………. yet (as you stated) ……. “is widely viewed in the community as a great deal for taxpayers compared to what most communities have to contribute to Calpers”.
While certainly contributing MORE than what’s fair to Taxpayers, noting the pension mess in CA, those towns (with DC Plans) should consider themselves “lucky”.
——————————————————————————
The financial rape of Taxpayers responsible for ludicrously excessive PUBLIC Sector DB pensions & benefits is outrageous.
Posted by Anonymous on August 11, 2019 at 10:41 am
You have no idea what is fair to taxpayers based only on the DC contributions. To make a comparison, you must also know the wages and other benefits, and how they compare to similar private sector jobs in the area.
Posted by Tough Love on August 11, 2019 at 10:59 am
We do ……………….
Per the AEI Study (in Figures 6 and 13 in the link below), in California, PUBLIC Sector Total Compensation (including wages + pensions + benefits) is 23%* greater than that of comparable PRIVATE Sector workers.
Now of course we know that that statistic is not true for EACH & EVERY individual job, but what FINANCIALLY IMPACTS THE TAXPAYERS is the net difference for ALL (yes ALL) jobs taken together as one group.
Click to access -biggs-overpaid-or-underpaid-a-statebystate-ranking-of-public-employee-compensation_112536583046.pdf
* The 23% greater PUBLIC Sector Total Compensation shown in Figure 6 rises to 33% (shown in Figure 13) when the value of the MUCH greater PUBLIC Sector “job security” is factored in.
Posted by Anonymous on August 11, 2019 at 12:04 pm
We don’t ………………………..
That study was based on data up to ten years old.
That study was based on state employees, not local.
The main reason that study was an outlier was that it adjusted the normal costs for pensions and healthcare to a constant discount rate of 4.3 percent, which is not applicable to a DC system.
Whether comparing public or private jobs, it is reasonable to assume that a job with lower wages would have higher benefits to attract and retain qualified employees, and vice versa.
Stop me if you’ve heard this before …….
It is invalid to compare pensions outside the context of total compensation.
Don’t be invalid.
Posted by Tough Love on August 11, 2019 at 12:18 pm
The AEI study is one that you Stephen Douglas quote and compliment quite often.
I guess you find it OK to challenge it when the results don’t suit YOUR bias as a retired Calif. Public Sector worker.
————————-
Quoting Stephen Douglas ………….
“It is invalid to compare pensions outside the context of total compensation.
That’s correct, which is why the AEI Study DOES in fact study TOTAL COMPENSATION …. concluding that in BOTH our home States of CA and NJ, the PUBLIC Sector has a 23%-of-pay ADVANTAGE.
Taxpayers …………. how much MORE would YOU have for YOUR retirement needs if you had an ADDITIONAL 23% of pay to save and invest in every year of YOUR career ….. $500,000, $1 Million, perhaps $2 Million for some?
Well, those figures are a good estimate of how much we (the Taxpayers) are OVERCOMPENSATING) the average full-career Public Sector worker. And ADD to that the $250K-$500K value of free or heavily-subsidized FAMILY retiree healthcare benefits that are all but unheard of as an employer-sponsored benefit in the Private Sector today.
Posted by Anonymous on August 11, 2019 at 12:55 pm
Irrelevant.
The study compares state salaries and benefits, not local governments.
There is a very wide variety of wages and benefits among the local governments.
The 23% advantage is based on a 4.3% discount rate, not applicable to the defined contribution plan in this city.
The cited study has nothing to do with this city.
Nothing.
———————–
And, do not……
“ADD to that the $250K-$500K value of free or heavily-subsidized FAMILY retiree healthcare benefits…”
That is already included in the 23% (discounted at 4.3 percent.)
Posted by Tough Love on August 11, 2019 at 7:37 pm
Well, the AEI study certainly does not reflect what one single Locality would find, but is certainly IS relevant to Taxpayers who object to unnecessarily OVERPAYING for Public Services.
Repeating the study’s conclusion ……………
“Per the AEI Study (in Figures 6 and 13 in the link below), in California, PUBLIC Sector Total Compensation (including wages + pensions + benefits) is 23% greater than that of comparable PRIVATE Sector workers.”
Posted by Carl Mason on August 10, 2019 at 6:50 pm
The GOV,public Egg Harbor Township school system of NJ. They want the real taxes payers to pay for their pensions. They also want the real taxes payers to pay for their platinum Healthcare. A lot of them are fleeing NJ to less costly states with their big fat pensions saying that it is too costly to live in NJ. Real taxes payers are the ones working in the private sector.
Posted by Anonymous on August 11, 2019 at 5:14 pm
Nice insight Carl. U add so much.
Posted by Anonymous on August 11, 2019 at 1:07 pm
On topic …..
A Modest Proposal To Solve Illinois’ Pension Woes (and New Jersey, too.)
Based on my calculations (and yes, these are real calculations, using real data for this plan collected for another project, not merely back-of-the-envelope estimates, however unlikely the very even numbers make it appear), an inflation rate of 10%, and assumptions for interest rate/asset return rate and salary increases over time which reflect the same net-of-inflation rates as at present, would halve the pension liabilities of the Illinois Teachers’ Retirement System.
(Jane the Actuary)
Question:
IF.
Using Ms. Bauer’s ten percent inflation, ceteris paribus, who would be better off, the retiree with a DB pension, or the one with a DC pension?
And how would it affect the current costs and unfunded liability of public pension plans? (Or private sector DB plans, for that matter.)
Posted by Anonymous on August 11, 2019 at 1:37 pm
“What is it about the Defined Contribution concept that the unions and NIRS despise? The transparency?”
Retirees receive less.
There ain’t no doubt. Even with the probable higher rates (“That Public Sector 15% (10% + 5%) of pay ALONE is 5 times the 3%-of-pay that is typical as a Private Sector employer contribution into a 401K Plan ……….”), governments figure to spend less on DC pensions than DBs.
Government spends less, retiree receives less. It is almost inevitable. Some public workers will try (and some will succeed) to increase wages to compensate for the lower benefits. Like water seeking its own level, wages will adjust to the new normal.
Government spends less, retiree receives less… Unless, with actual reform, sound actuarial practices, and conservative assumptions, as many “experts” maintain, a DB plan can provide a higher pension for the same cost of defined contributions. A win/win.
Posted by Tough Love on August 12, 2019 at 7:04 pm
Quoting ………………
“Government spends less, retiree receives less… Unless, with actual reform, sound actuarial practices, and conservative assumptions, as many “experts” maintain, a DB plan can provide a higher pension for the same cost of defined contributions. A win/win.”
Now I’ll quote Edward Ring is a co-founder of the California Policy Center …..
“Defined benefit pensions, when they are based on reasonable multipliers and conservative rate of return assumptions, can remain a financially sustainable way to provide retirement security to public servants.”
————————————————-
On cursory read, they don’t sound too diufferent, but under CAREFUL examination they are VERY VERY different.
You see, YOU chose to ONLY call for ….. “actual reform, sound actuarial practices, and conservative assumptions” ……. but aren’t looking to make the DB Plan include “reasonable multipliers” as Mr. Ring calls for. Mr. Ring understands that current Public Sector DB Plans are TOO GENEROUS (via BOTH too-high multipliers and too generous provisions such as very young retirement ages) and must come down to ………. “remain a financially sustainable way to provide retirement security to public servants.”
Posted by Tough Love on August 11, 2019 at 7:39 pm
Quoting ………………
““What is it about the Defined Contribution concept that the unions and NIRS despise? The transparency?” Retirees receive less. ”
As they SHOULD, because right now they receive way too MUCH !
Posted by Anonymous on August 11, 2019 at 10:06 pm
“Some public workers will try (and some will succeed) to increase wages to compensate for the lower benefits. Like water seeking its own level, wages will adjust to the new normal.”
Posted by Tough Love on August 11, 2019 at 10:20 pm
That reminds me of NJ teachers complaining that their net pay hasn’t risen in years due to CH 78 which made them pay some marginally reasonable healthcare premiums.
Is the glass half empty of half full?
The Teachers see it ONLY from the perspective that their net pay hasn’t risen.
The Taxpayers see it from the perspective that it was patently absurd that Pre-Ch78 teachers WEREN’T paying anything for healthcare while the Taxpayers pay hefty ins. premiums. So they aren’t getting TOO LITTLE today, they were getting TOO MUCH yesterday.
Posted by Anonymous on August 12, 2019 at 12:39 am
Yes, but.
Perhaps you are familiar with Mark Glennon of Wirepoints. Not a big union supporter.
” Teachers and other public employees in Illinois’ pension systems hired after 2010 are in Tier 2, which itself is sufficient reason not to begin teaching or other public service in the state.”*
Now, this is a mare’s nest caused by the fact that legacy employee pensions can’t be reduced, but it illustrates the point El guapo makes (and myself and others.) You cannot continue to reduce public wages and/or pensions without consequences. There is a line, hazy perhaps, where people will just eschew public jobs.
John Moore, as I recall, regularly calls for a freeze, or even reduction of public wages, and putting those savings toward pension liabilities until 100 percent funding is achieved. True, this would legally control pension costs prospectively, but with frozen pay, teachers, cops and others may tough it out for a year or two, but anyone who can will soon be headed for the exits.
I’ve been lucky to know teachers who loved their jobs, but they love their family more.
* Want to Fix Illinois Teacher Shortage? End the Tier 2 Pension Rip-Off – Updated
Wirepoints, May 31, 2019
Posted by Tough Love on August 12, 2019 at 12:51 am
Quoting ……………
“There is a line, hazy perhaps, where people will just eschew public jobs.”
That’s fine. See how you like the PRIVATE Sector where most employees are “at-will employees”.
At-will employment is a term used in U.S. labor law for contractual relationships in which an employee can be dismissed by an employer for any reason (that is, without having to establish “just cause” for termination), and without warning,[1] as long as the reason is not illegal (e.g. firing because of the employee’s race or religion).
Posted by E on August 12, 2019 at 9:50 am
Patently absurd….stop with the nonsense you dipshit.
Trust me. I wouldn’t starve in the private sector. Lol. Same tired line from someone who hates that I get a pension. There is shitbirds in every profession. Marine1 is right. At times, TL, you sound like a bitter woman who doesn’t even know how to wipe her own ass. 😀
Jealous fool. I don’t think you would last a week as a cop. Lol. No balls. Figuratively speaking of course.
Posted by E on August 12, 2019 at 9:51 am
Haha. You think folks will work for peanuts to serve your lousy ass. Lol. Think again.
Posted by Tough Love on August 12, 2019 at 10:03 am
El Gaupo,
Ok, so we can now add “lousy ass” to the prior list of your name-calling….
“Jealous, windbag, sucks, pathetic, “fuck you TL”, shut up, dopey, dipshit”
———————————————————————————-
Lol ………. and you call yourself a smart, mature, family man.
Posted by E on August 12, 2019 at 1:33 pm
Oh cmon. Outside of fuck You TL, the rest of them are pretty spot on. Lol
Posted by Tough Love on August 12, 2019 at 6:33 pm
Now now ………… behave, potty-mouth.
Posted by geo8rge on August 12, 2019 at 12:46 am
Off Topic but amusing. NJ’s American Dream Mall is set to become a national financial disaster. American Dream Mall developer, Canadian Triple Five, used the American Dream Mall in Minnesota as collateral to get a loan to finish the American Dream Mall in NJ. Local Minnesota authorities are miffed that the developer got them to make expensive concessions to The Mall of America MN before it became highly leveraged to The American Dream Mall NJ. Triple Five also owns a mega mall in Canada and is building one in Miami. But maybe I am being pessimistic.
Mall of America owner puts megamall on the line for massive New Jersey project
Triple Five secures loan for glitzy N.J. complex with 49% stake in megamall.
Bloomington staff are intensely interested in Canada-based Triple Five’s business dealings, in part because the mall makes up about 10% of the city’s tax base. The Mall of America has pressed for and won millions in tax subsidies from the state Legislature in recent years to aid in the mall’s expansion, which is making the water park deal possible.
http://www.startribune.com/moa-owner-puts-megamall-on-the-line-for-massive-new-jersey-project/532985472/
Posted by Anonymous on August 12, 2019 at 12:47 am
Quoting TJ…
” Pre-Ch78 teachers WEREN’T paying anything for healthcare while the Taxpayers pay hefty ins. premiums. So they aren’t getting TOO LITTLE today, they were getting TOO MUCH yesterday.”
Sez who?
Stop me if you’ve heard this before…
It is invalid to compare healthcare benefits outside the context of total compensation.
Don’t be invalid.
Posted by Tough Love on August 12, 2019 at 12:58 am
Oh yeah, we’ve heard that before ….. HUNDREDS of times from YOU.
And again (per the AEI study), in BOTH our home States of CA and NJ, PUBLIC Sector workers (taken as one group …. which IS what financially impacts the Taxpayers) have a 23%-of-Pay TOTAL COMPENSATION advantage over their Private Sector counterparts.
Shall we go back into THAT discussion again ?
Posted by Anonymous on August 12, 2019 at 12:56 am
After a certain point, cutting total compensation, whether through wages, pensions, or healthcare, is “sufficient reason not to begin teaching or other public service in the state.”*
You can “claim” all public employees are “getting TOO MUCH yesterday.”
That don’t make it so.
Posted by Tough Love on August 12, 2019 at 1:02 am
You claim lots of things ……… not much of which is supportable
And with your employment background (as a retired CA Public Sector light bulb changer), you’re hardly in a position to claim “expertise” in such matters.
Posted by E on August 12, 2019 at 9:52 am
He doesn’t need to. He gets a pension……and you DON’T.
Posted by E on August 12, 2019 at 9:57 am
And we all know what you think of experts anyway. That is of course, unless it furthers your agenda. Moron. Guess you didn’t make the right career choice if all you do is whine and expect two jobs that have different employers and are completely different to have the same compensation. You are a tired and sad excuse for a human being at times. Thou shall not covet thy neighbors goods TL.
Posted by Tough Love on August 12, 2019 at 9:58 am
lol ……. you have know idea …. what I have.
Remember, I’m annoyed because I UNNECESSARY pay too much for PUBLIC Sector pensions.
Posted by Anonymous on August 12, 2019 at 10:54 am
lol ……. you have know idea …. what I have.
Posted by E on August 12, 2019 at 1:37 pm
Um….I think your more than annoyed. And it’s obvious you don’t get a pension.
Posted by E on August 12, 2019 at 9:50 pm
Know idea what she has.
Maybe I just intimidate people with my “baron”
Posted by Anonymous on August 12, 2019 at 10:13 am
It is a simple concept. Forget about public workers; if one is looking at two private sector jobs, one with a pension and one without, the job without will probably have higher wages.
Applicants reasonably take that into consideration. You can’t just declare one is excessive based on the pension alone. Or the healthcare.
If any private sector employer reduces his total compensation below market level, he will lose employees and/or have difficulty recruiting qualified workers. Same thing with public sector employers.
And many public sector jobs, even with pensions and benefits, are still at or below market compensation.
Posted by Tough Love on August 12, 2019 at 6:30 pm
Stephen Douglas (posting as Anonymous) ………….
Sounds like you are AGAIN repeating your point that ……… when comparing PUBLIC and PRIVATE Sector workers it must be the Total Compensation (not just wages or pensions or healthcare benefits, etc.) that must be compared.
For the umpteenth time, I agree the above, and it appears that you AGAIN need to read this …………
“Per the AEI study, in BOTH our home States of CA and NJ, PUBLIC Sector workers (taken as one group …. which IS what financially impacts the Taxpayers) have a 23%-of-Pay TOTAL COMPENSATION advantage over their Private Sector counterparts.”
—————————————————
Next, quoting ……………
“If any private sector employer reduces his total compensation below market level, he will lose employees and/or have difficulty recruiting qualified workers. Same thing with public sector employers. ”
Clearly that’s true for the Private Sector wherein employers freely compete for talent WITHOUT any external influences that “distort” what truly is MARKET-RATE compensation.
In the Public Sector it’s far more complicated. Public Sector workers like to look ONLY at the compensation package of other PUBLIC Sector workers. Are there no Private Sector jobs with which their jobs can be compared? Of course there are, and THOSE PRIVATE Sector jobs likely DO HAVE true Market-rate compensation (whatever the split between wages, pensions, and benefits).
And WHY do Public Sector workers like to look ONLY at the compensation package of other PUBLIC Sector workers? It’s often because the total Compensation package is much HIGHER (you know that pesky 23% Total Compensation ADVANTAGE in CA and NJ) than in COMPARABLE Private Sector jobs.
And WHY is that? Because the compensation in the Public Sector is NOT freely determined BY THE MARKET without inappropriate outside influences. You know, like the willingness of Elected Officials to trade their favorable votes on Public Sector pay, pensions, and benefits for BRIBES disguised as Union campaign contributions.
Posted by Anonymous on August 12, 2019 at 7:37 pm
“PUBLIC Sector workers (taken as one group …. which IS what financially impacts the Taxpayers) “?
When looking for employment, public sector jobs are not taken as a group. Job seekers compare the total compensation of all jobs, public or private. More and more, public sector jobs are coming up short. Eg tried to tell you. I tried to tell you. Mark Glennon told you. As teacher’s pensions are being cut, and wages for teachers and law enforcement are stagnating, it is more and more difficult to attract and retain qualified employees. They could care less about the “average” public sector compensation. They have a Bachelor’s or Master’s in hand and they will go where the money is. More and more, it’s not in the public sector. There is no such thing as a “public employee” sui generis. People constantly move from the public to private sector and vice versa.
Only about twenty percent of public workers are career workers of thirty years or more. About half of public sector workers don’t even stay long enough to vest. They follow the money, and/or other motivations.
A recent accounting graduate with some experience could care less what the average public sector worker earns in CA or NJ. She wants to know what the average —accountant— earns, compared to the private sector.
“For the foreseeable future, public-sector staffing shortages are inevitable, and the only short-term answer is requiring costly overtime or raising pay levels to attract qualified applicants…”
“They also need to pay more attention to the work experience in government. It’s been widely reported that new hires are frustrated and dissatisfied by the reality of working in a bureaucratic environment. If the reports are accurate, turnover among recent hires has been high — and costly.”
https://www.governing.com/columns/smart-mgmt/col-government-staffing-challenges-pay-productivity-work-experience.html
Posted by NJ2AZ on August 12, 2019 at 9:07 pm
assuming the ability to debt finance tightens in the nearish term, there’s going to be an inevitable reckoning between how much government people want and how much they are willing to pay for.
though i suspect that in the interim we will first exhaust the “how much government can i vote for myself at the expense of someone else” approach
Posted by Tough Love on August 12, 2019 at 9:18 pm
When rich pensions and retiree healthcare benefits are reformed STATEWIDE there will be little Public Sector job hopping from locality to locality…… no (or very little) benefit to moving. Want to test the waters in the PRIVATE Sector ……….. go for it PLEASE !
We need politicians who aren’t beholden to the Public Sector Unions for votes or money, and will represent the interests of ALL Taxpayers, 85% of whom are NOT Public Sector workers. The PUBLIC Sector rip-off of the Taxpayers needs to end.
Posted by E on August 12, 2019 at 9:53 pm
You are plain wrong when you say there will be no jumping around from town to town. Yea….cause that never happens in the private sector?!🙄
Posted by Tough Love on August 12, 2019 at 10:43 pm
El gaupo,
Reading comprehension problem? Re-read what I stated.
Posted by Anonymous on August 12, 2019 at 11:37 pm
LOL!
Posted by Anonymous on August 12, 2019 at 10:21 pm
Quoting TJ…
“…there will be little Public Sector job hopping from locality to locality…… no (or very little) benefit to moving. Want to test the waters in the PRIVATE Sector ……….. go for it PLEASE !”
It is already happening.
“For the foreseeable future, public-sector staffing shortages are inevitable, and the only short-term answer is requiring costly overtime or raising pay levels to attract qualified applicants…”
“…raising pay levels to attract qualified applicants…”
Is —not— politicians beholden to the Public Sector Unions for votes or money.
It is politicians responding to market forces to maintain a necessary workforce.
Yes. Market forces.
” Salary growth in state and local government and public education has lagged that of the private sector. Over twenty years, average private sector wages rose by 15 percent above inflation while state and local government pay rose by 8 percent and public education by 5 percent.”
Andrew Biggs
“These higher costs hit state and local governments right as the economic recession began to severely lower their revenues. These events played a major role in prompting changes to public pension plans and financing that were unprecedented in number, scope, and magnitude.
Since 2009, nearly every state passed meaningful reform* to one, or more, of its pension plans.”
NASRA
*”reform” is a euphemism for “reduction”.
“State and local government wages and salaries (those actually on the job and providing services) are at a 50 year low as a share of personal income.”
Larry Littlefield
Relative public wages are going down. Public pensions are decreasing.
23% is a thing of the past.
You are stuck in denial.
Posted by Tough Love on August 12, 2019 at 10:49 pm
Quoting DIRECTLY from Stephen Douglas’s above comment ……….
“Quoting TJ…
“…there will be little Public Sector job hopping from locality to locality…… no (or very little) benefit to moving. Want to test the waters in the PRIVATE Sector ……….. go for it PLEASE !”
It is already happening.”
—————————————————
Amazing. You LEAVE OUT the MATERIAL beginning of my first sentence that you quoted, specifically …… “When rich pensions and retiree healthcare benefits are reformed STATEWIDE ….”
And then have the balls to say ….”It’s already happening.”….. BECUASE you left out that first part.
————————————
Posted by Anonymous on August 12, 2019 at 11:33 pm
TJ…
“Want to test the waters in the PRIVATE Sector ……….. go for it PLEASE !””
Me…
“It is already happening.”
“For the foreseeable future, public-sector staffing shortages are inevitable, and the only short-term answer is requiring costly overtime or raising pay levels to attract qualified applicants…”
Teachers, cops, accountants, etc. There are greener pastures out there.
Forget job hopping, Mr. Love. They are hopping to the PRIVATE sector.
Market forces. Get used to it.
BECUASE you are still stuck in the past.
Posted by Tough Love on August 13, 2019 at 12:07 am
Stephen Douglas,
Below is a quote about Trump. You operate in EXACTLY the same way (but about the excessive Public Sector Total Compensation ………… you know, that pesky 23%-of-pay Public Sector Total Compensation ADVANTAGE in CA and NJ:
“It was a classic Trump move: distract, divert, repeat. When a presidential problem surfaces, the president finds a way to move the problem out of the public eye, relieving pressure on him to solve the actual problem.”
Posted by Anonymous on August 13, 2019 at 5:12 am
I understand why you might think that.
Posted by E on August 13, 2019 at 3:54 pm
She can turn cream sour just by looking at it SD. Witch. She is would die if she had to do police work. Clueless. For sure. No idea
Posted by Tough Love on August 13, 2019 at 4:54 pm
Ok………… we can not add “witch”: to El gaupo’s name-calling .
Very mature Mr. “family man”.
Posted by Anonymous on August 14, 2019 at 1:22 pm
Two words…
MARKET
FORCES
New graduates and other job seekers are not interested in your study. What the “advantage” may or may not have been ten years ago, or even five years ago, is irrelevant.
They are comparing jobs today. If public sector salaries for educated workers are generally lower than those in the private sector (they are), and pensions and benefits have been reduced in the public sector (they have), then the applicants will choose the private sector.
To quote a wise man…
“It is already happening.”
Posted by Tough Love on August 14, 2019 at 1:36 pm
Quoting ………………
“New graduates and other job seekers are not interested in your study. ”
Say light-bulb-changer Stephen Douglas.
Damn, now THAT’s a reliable/expert source !
..
Posted by Anonymous on August 14, 2019 at 2:25 pm
Not the source, Mr Love, just the messenger.
“Want to Fix Illinois Teacher Shortage? End the Tier 2 Pension Rip-Off – Updated”
Mark Glennon, Wirepoints, May 31, 2019
“Rip-Off” as in ripping off teachers, NOT taxpayers.
or Google
“teacher shortage 2019”
About 17,800,000 results (0.51 seconds)
———————————————
“police shortage in america”
About 22,400,000 results (0.39 seconds)
———————————————
“public sector jobs unfilled”
About 569,000 results (0.54 seconds)
You are stuck in the past, TJ. Your “light-bulb-changer” argument is a straw man. Look at real sources …today… that’s what job seekers are doing.
Posted by Anonymous on August 14, 2019 at 12:24 pm
“For pension experts, there is plenty to learn from Wisconsin…”
“And it hasn’t cost local taxpayers much to keep Wisconsin’s pension fund topped up. In 2016, Wisconsin’s government spent around 2.13% of the state’s budget on their public pension fund, much less than the average contribution rate of 4.74% in other states.”
“This is how it works: On top of a minimum payment based on an employee’s years of service and the salary reached at retirement, the pension plan gives an additional dividend to individuals that automatically waxes and wanes every year based on how its assets perform.”
———————————–
It’s complicated… “Risk sharing” is an important feature of Wisconsin’s pension plan, but it seems like the most important feature is…
“Regardless of political persuasion, regardless of who’s been on the governor’s office for many, many decades, Wisconsin’s legislatures and governors have made sure the commitments to contributions to the pension fund were met,”
Now, there is an unusual concept.
Or,
PAY THE BILLS ON TIME, IT’S CHEAPER IN THE LONG RUN.
https://www.marketwatch.com/story/meet-the-man-who-helped-create-one-of-the-best-public-pension-plans-in-america-2019-05-06
Posted by Tough Love on August 14, 2019 at 1:38 pm
Risk-sharing should indeed be a feature of all DB Plans. Unfortunately in near 100% of current Public Sector DB Plans, it’s the Taxpayers who have ALL of the risk.
Posted by Anonymous on August 14, 2019 at 1:51 pm
“… for many, many decades, Wisconsin’s legislatures and governors have made sure the commitments to contributions to the pension fund were met,”
“…should indeed be a feature of all DB Plans.”
Posted by Tough Love on August 14, 2019 at 6:59 pm
Stephen, I’m 100% for FULL FUNDING of PUBLIC Sector pensions identical ….. in EVERY WAY to that provided by Wisconsin.
With the generosity MUCH MCUH lower than elsewhere, the workers paying 50% of TRUE costs, and the workers AND RETIREES sharing the “risk”, it would be a HUGE financial “win” for the Taxpayers.
Our home States of CA and NJ would be GREAT Places to start.
Do you thing the “moocher” Unions/workers would buy-in ?
Posted by Anonymous on August 14, 2019 at 10:07 pm
“With the generosity MUCH MCUH lower than elsewhere,…”
Still using imaginary data, I see.
Pension formulas have been modified in just about every state. Multipliers have changed, retirement ages increased, employee contributions increased, etc., etc., etc. You really have no idea. Don’t let that slow you down! READY, FIRE, AIM!
The man who set up the state pension system said he doesn’t think technical solutions are as important as the willingness of policy makers to pursue the long-term good.
PAY THE BILLS ON TIME, IT’S CHEAPER IN THE LONG RUN.
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The generosity of Wisconsin pensions is higher than average. Total retirement income replacement rates for full career state workers is 92%. In California, it is 102%. 81% in New Jersey. Or so it was in 2014.
You have an abnormal obsession with EQUAL. “Experts” say +/- 5 percent is equal, and even with infinite data and a warehouse full of supercomputers. You will never get there. Even if it were possible, it would change continually.
Posted by Tough Love on August 14, 2019 at 11:01 pm
Stephen,
Your speak with forked-tongue. Through 2017, Wisc has never contributed more than 7.4% of pay into their pension system while keeping it 100% funded for many years.
Source:
https://www.forbes.com/sites/ebauer/2019/03/08/go-north-young-man-to-the-wisconsin-public-pension-system/#68fe878f40d4
The Taxpayer share of just the NORMAL COST of NJ and CA pensions EASILY requires at least 4 times that mount to fully fund them …………… likely reflecting the highly differing generosity level from those in Wisc.
Posted by Anonymous on August 14, 2019 at 11:43 pm
What generosity?
Total retirement income replacement rates for full career Wisconsin state workers is 92%.
In New Jersey it is 81%.
(2014)
Of course, you can’t believe everything you see on the World Wide Web.
“The Taxpayer share of just the NORMAL COST of NJ and CA pensions EASILY requires at least 4 times that mount to fully fund them …………… ”
Like that bulls hit there.
Posted by Tough Love on August 15, 2019 at 12:06 am
So tell me genius, how does Wics keep a 100% many-year funded ratio, with a 92% income replacement rate when contributing only 5% to 7.4% of pay (even with employee’s contributing an equal amount) ?
Posted by Anonymous on August 15, 2019 at 1:45 am
A wise guy once said…
“Of course, you can’t believe everything you see on the World Wide Web.”
You, of all people, should know that pension plans are complicated. And Wisconsin is more so than most. Sometimes reporters, columnists, pundits, get it wrong. Or leave out vital information.
Ya never know. I have it on good authority that Wisconsin is above average in benefits. Could be wrong. Feel free to study their CAFR, keeping in mind that Mr. Bury says you can’t really even rely on that.
Like many states, Wisconsin has it’s good points and bad. It’s ups and downs. Like an —attempt— to raid the fund in 1987 (” If successful, the maneuver would have freed up more money in the state budget for other immediate priorities.”) Sound familiar? Supreme Court* ordered governor to pay back the money plus interest and attorney fees. And a bond in 2003 that was apparently well timed (and lucky) to fill a hole in the fund. Sometimes they work.
Looks like the really big difference is a commitment to fund the pensions.
* Yay! Supreme Court! May be that early decision is a major reason for the “commitment” since then.
Posted by Anonymous on August 15, 2019 at 5:39 am
May we live in interesting times.
I think it’s great that Wisconsin is fully funded. Also great that their pensions are above average. What’s not great?
Google:
“Wisconsin teacher shortage.” Or “Wisconsin police shortage. ”
TJ…
“Want to test the waters in the PRIVATE Sector ……….. go for it PLEASE !””
Me…
“It is already happening.”
Everywhere.
Posted by Burypensions Blog on August 16, 2019 at 12:33 pm
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