More Good Pension News

[SEC=UGA]

Taxpayers kick in an average $8.60 for every dollar that city employees contribute to their pensions, a sweet deal costing the Big Apple a bundle.

 

Even though their own retirements are less secure, as private businesses have shifted from traditional pensions to riskier savings plans like 401(k)s, taxpayers' support for rock-solid public employee pension plans is growing. That's because pension funds are guaranteed to grow 8 percent a year -- and taxpayers have to make up the difference if they don't.

 

Taxpayers' share of city pension costs has skyrocketed more than 900 percent in the last decade -- from $703.1 million in 2000 to $6.5 billion in 2009, according to the city comptroller's annual reports.

Pension Explosion

 

The cost is expected to hit $7.6 billion this fiscal year and $8.7 billion next year.

 

"It's a double-whammy for taxpayers," said E.J. McMahon, a senior fellow at the Manhattan Institute.

 

"If they're privately employed, they shoulder the risks of saving for their own retirement. At the same time, they have to pay a steadily mounting cost of guaranteed pensions for government workers."

 

Teachers get the biggest bang for their pension contributions -- the city puts in $15.50 for every $1 they contribute.

 

Taxpayers pay $10 for every $1 firefighters put in, $9 for every $1 from cops and $5.60 for every $1 from transit, sanitation and other civil servants, the 2009 report shows.

 

"The cost has risen because employee benefits were dramatically increased in 2000, just as the [stock] market began to collapse," said John Murphy, former executive director of the New York City Employee Retirement System, NYCERS, the largest city pension fund.

 

"In retrospect, it was one of the most irresponsible things to have done," he said.

 

Many private companies cut back or suspended matching contributions to employee 401(k) plans after the most recent dramatic market downturn in 2008. Some have begun to restore contributions, depending on profits.

 

Teachers hired after 2008 contribute 4.85 percent of their salaries for their first 10 years, then 1.85 percent a year thereafter.

 

Cops and firefighters make annual pension contributions depending on their age at swearing in, at most 8 percent at age 20. But in a benefit called "Increased Take Home Pay," the city subsidizes 5 percent of that.

 

Cops and firefighters are guaranteed an 8.25 percent return on their contributions, and can take loans from the plans up to twice a year,at 4 percent interest.

 

It's only fair, said Anthony Garvey, who recently retired as executive director of the Police Pension Fund.

 

He said the benefits befit the Finest and Bravest who risk "getting shot or running into burning buildings."

 

 

Read more: http://www.nypost.com/p/news/local/you_pay...P#ixzz0tUOtNb6N

[Rovers]

While it is far too much, one reason civil service workers take these jobs is for ther pensions. NYC employees don't make much money considering the COL around NYC. An average house is still over $400,000 and the property taxes run over $6,000 a year. I'm talking about something like an unimproved 50 year old Cape Cod home. Transit workers make about 60 to 65k a year. Not much in these parts. Cops, sanitation and fireman can retire at 50, other workers it's 55. Teacher salries here are low compared to the suburbs, way low. So are the cops' salaries. Surrounding counties pay their police twice what the NYC cops get.

 

So, if a transit worker puts in 25 years and retires at 55, he gets half his final salary. Maybe 32k. Most of them leave the state because you can't live on that here. That does not include health care.

 

Funny sort of..... these same civil service workers also pay those taxes...

Edited July 12, 2010 by Rovers

[dmarc117]

unions and politicians have destroyed this country

[Ursa Majoris]

unions and politicians have destroyed this country

Some other countries are tackling their pension liabilities already. We need to do the same, probably beginning with anyone aged 40 or less and some kind of tax break on their contributions into plans outside the pension scheme, like 401k.

 

In fact, wholesale replacement of pensions with 401k over time is likely the right (and only) way to go. Beware though that salaries for people who no longer have pensions included as part of their total comp will have to rise.

[Rovers]

unions and politicians have destroyed this country

 

It was a system that worked very well for a long time. It was the job security and the pensions that attracted quality workers. What EVERYONE failed to look at was the cumlative effects over the long term. It also failed to foresee this economic downturn.

 

NYC is a case unto itself. For many jobs, the salaries in the city are at least double what the same job in the suburbs will pay. Take for instance a legal secretary. On Long Island it might pay 50k. In the city, maybe 100k. Despite the taxes and cost of commuting, it is still worth the trouble to work in the city.

 

Take the pensions away from these jobs, and watch the quality of the workforce diminish. I see the best solution as raising their salaries while reducing the pension benefits.

[Azazello1313]

Some other countries are tackling their pension liabilities already. We need to do the same, probably beginning with anyone aged 40 or less and some kind of tax break on their contributions into plans outside the pension scheme, like 401k.

 

In fact, wholesale replacement of pensions with 401k over time is likely the right (and only) way to go. Beware though that salaries for people who no longer have pensions included as part of their total comp will have to rise.

 

well, 401k contributions are already subject to a pretty significant tax break, obviously.

 

interestingly, phasing out (or at least significantly reducing) defined-benefit pensions is something the federal government started doing a long time ago. under reagan, not surprisingly. the older system -- CSRS -- was just a big ol' pension fund. the newer FERS system leans much more heavily on Thrift Savings Plan (fedgov analog of the 401k) contributions, and a much smaller defined benefit pension.

 

in any case, yeah, it's a really bad idea for governments to go making big, fixed promises of future benefits and then just hoping economic conditions will allow them to follow through when the time comes. and yet, our current government seems to be doing more and more of that than ever, both making new promises and taking more from the taxpayer to fulfill the old ones. and the people who do it just assume, hey, who cares, it's not like we can default! someone will have to bail us out and reward our budgetary stupidity.

[Azazello1313]

Take the pensions away from these jobs, and watch the quality of the workforce diminish. I see the best solution as raising their salaries while reducing the pension benefits.

 

best solution going forward is, as ursa intuited, stop putting the money in these pension funds, and put the same money into matching 401k contributions.

[Ursa Majoris]

best solution going forward is, as ursa intuited, stop putting the money in these pension funds, and put the same money into matching 401k contributions.

Indeed. 401 k is without doubt a flawed system but it offers flexibility, encourages commitment, is inheritable, works everywhere (with an IRA if no employer 401k) and best of all it allows tax deferment. You get back what you're willing (and able) to put in AND no-one else needs to subsidize you in your retirement.

 

Pensions, OTOH, especially those with "guaranteed" 8.5% returns per annum, are long past their sell-by date and need to go.

[dmarc117]

Some other countries are tackling their pension liabilities already. We need to do the same, probably beginning with anyone aged 40 or less and some kind of tax break on their contributions into plans outside the pension scheme, like 401k.

 

In fact, wholesale replacement of pensions with 401k over time is likely the right (and only) way to go. Beware though that salaries for people who no longer have pensions included as part of their total comp will have to rise.

 

 

why do salaries have to rise? people dont have jobs. put the people to work that want to work.

[dmarc117]

It was a system that worked very well for a long time. It was the job security and the pensions that attracted quality workers. What EVERYONE failed to look at was the cumlative effects over the long term. It also failed to foresee this economic downturn.

 

NYC is a case unto itself. For many jobs, the salaries in the city are at least double what the same job in the suburbs will pay. Take for instance a legal secretary. On Long Island it might pay 50k. In the city, maybe 100k. Despite the taxes and cost of commuting, it is still worth the trouble to work in the city.

 

Take the pensions away from these jobs, and watch the quality of the workforce diminish. I see the best solution as raising their salaries while reducing the pension benefits.

 

 

i dont believe this. people need to work and put food on the table. people will soon realize that they have to work for less. have less toys. etc.

[dmarc117]

youre going to see the same thing that happened when the world went global. except we are going to do it to ourselves this time. unions will go on strike, companies will say gfy, people will be willing to work for less, unions toast. they have no bargaining power anymore. i wish the pols and companies could see this. actually the pols do, but unions bring them money and votes. the voters need to say enough is enough.

[Rovers]

i dont believe this. people need to work and put food on the table. people will soon realize that they have to work for less. have less toys. etc.

 

What part do you not believe? For most NYC employees, any cut in salary would mean the could not afford to own a home. Do you think that civil service employees should be relagated to lower-lower middle class? priced out of home ownership? It isn't a question of toys, it's living near housing projects in bad neighborhoods vs. raising one's children in a decent environment. Should civil serice workers have their pay cut to the point where home ownership is not within their means? They can barely afford homes in this area now. I know some who commute over 4 hours a day because thast was how far away they had to get from NYC to afford a home. They dont have boats or Lexus' in their driveways. They don't go on vacations.

 

The problem isn't salaries, it's the pensions. The pension system has to get fixed. Cut salaries? That is a ridiculous notion. An emotional knee jerk. A bigger problem is double dipping. Cops and fireman can retire after 20 years. Let's say at age 45. They then go get another city job, collect the first pensioin, and then another after they retire the second time.

 

If you want to cut salaries, fine... cops in my county make around 120-130k a year with OT, more than twice what NYC cops make. And they have VERY safe jobs for cops. Nothing like what the city cops deal with. You think young men will be willing to run into burning buildings for 20 years and not even be able to afford a home? Some civil service jobs are ridiculously over paid, like the cops in the suburbs here, but not city employees. They are UNDER paid already.

[Rovers]

youre going to see the same thing that happened when the world went global. except we are going to do it to ourselves this time. unions will go on strike, companies will say gfy, people will be willing to work for less, unions toast. they have no bargaining power anymore. i wish the pols and companies could see this. actually the pols do, but unions bring them money and votes. the voters need to say enough is enough.

 

You bring your union hatred baggage to the wrong thread. This is about NYC and the pension system. Now you are off talking about isues far beyond the topic. The REAL truth is that some unions do not fit under your rash generalizations, while others do. The NYC civil service unions do NOT fall under your across the board condemnation of all unions. OK, maybe the teacher's union... but still, even NYC teachers are underpaid. That problem centers around protecting bad teachers and other issues, but not as far as the pay scale goes.

 

If you want to trash unions across the board, go ahead.... in another thread. This is about the pension problem. In NYC.

[dmarc117]

You bring your union hatred baggage to the wrong thread. This is about NYC and the pension system. Now you are off talking about isues far beyond the topic. The REAL truth is that some unions do not fit under your rash generalizations, while others do. The NYC civil service unions do NOT fall under your across the board condemnation of all unions. OK, maybe the teacher's union... but still, even NYC teachers are underpaid. That problem centers around protecting bad teachers and other issues, but not as far as the pay scale goes.

 

If you want to trash unions across the board, go ahead.... in another thread. This is about the pension problem. In NYC.

 

 

our public pension problem comes from unions. which explains my disdain for them. we can no longer afford these pensions or salaries. pain is needed to correct the problem. taxes need to go up and salaries/pensions need to be cut. it will suck, but its better than the alternative.

Edited July 12, 2010 by dmarc117

[Rovers]

our public pension problem comes from unions. which explains my disdain for them. we can no longer afford these pensions or salaries. pain is needed to correct the problem. taxes need to go up and salaries/pensions need to be cut. it will suck, but its better than the alternative.

 

You still don't get it. In NYC, it isn't a salary problem. It's a pension problem.

 

So, let me get this straight.... you think that in NYC all civil service employees should have their salaries cut, which would price them out of the income bracket required here to own a home? They are barely on the cusp now for generating enough income for home ownership. This is how you see it? I am in full agreement on the pension problem. You need to wake up and smell the coffee regarding your wanton desire to cut NYC CS worker's salaries.Salaries are NOT the problem, but you seem to think NYC civil service workers should be living in housing projects.

Edited July 12, 2010 by Rovers

[Ursa Majoris]

our public pension problem comes from unions.

So the unions granted themselves the pensions we see now? No management were involved, ever? Cool - I shall go up to Payroll right now and have them jack my pay, since management don't need to be involved.

Edited July 12, 2010 by Ursa Majoris

[Azazello1313]

So the unions granted themselves the pensions we see now? No management were involved, ever?

 

that's the problem. "management" here are elected politicians -- especially politicians whose campaigns are largely funded by....you guessed it. they're the ones who say, "oh sure, you can have more money. or if we can't give you much more money because, you know, some voters -- even in NY and illinois and NJ and california -- might wonder about how much we're spending here, we'll just promise you exorbitant pensions way off in the future."

 

"management" has a lot more interest in the help they can get in the next election than they have in the future solvency of the state budget. that is exactly the problem.

[Ursa Majoris]

"management" has a lot more interest in the help they can get in the next election than they have in the future solvency of the state budget. that is exactly the problem.

That's a problem across the political spectrum as I've pointed out many times. It is not just a democratic problem.

[Azazello1313]

That's a problem across the political spectrum as I've pointed out many times. It is not just a democratic problem.

 

when it comes to this particular issue (public sector pensions), it pretty much is. and that is just a fact.

 

but since you mention it, I do sense a mentality at play here that is similar to a right-wing strategy. "starve the beast". that is a right-wing strategy that recognizes that cutting taxes is popular, while cutting government isn't. so the idea is, you cut taxes and intentionally run deficits, so that down the road, future governments will find it very hard to implement hugh unpopular tax increases, so the size of government will have to be cut. the thing with public pensions represents one small piece of how democrats do the same thing. spend like crazy now and make exorbitant future promises, so that future governments have to either increase taxes to cover those pomises, or steal money away from the poor teachers and police officers!

 

both sides try and rig the game in the future toward their desired outcome, with, it seems, universally bad fiscal outcomes. I'm not sure if one side is worse than the other, but looking at the list of states (and countries) in the most fiscal trouble right now might give us some clues in that regard.

Edited July 12, 2010 by Azazello1313

[dmarc117]

You still don't get it. In NYC, it isn't a salary problem. It's a pension problem.

 

So, let me get this straight.... you think that in NYC all civil service employees should have their salaries cut, which would price them out of the income bracket required here to own a home? They are barely on the cusp now for generating enough income for home ownership. This is how you see it? I am in full agreement on the pension problem. You need to wake up and smell the coffee regarding your wanton desire to cut NYC CS worker's salaries.Salaries are NOT the problem, but you seem to think NYC civil service workers should be living in housing projects.

 

 

housing still has a way to come down as well. so we keep propping up salaries so people can buy houses?? isnt that how we got into this mess in the 1st place? by propping stuff up? the us and cities cant afford these salaries and benefits. plain and simple.

Edited July 12, 2010 by dmarc117

[dmarc117]

So the unions granted themselves the pensions we see now? No management were involved, ever? Cool - I shall go up to Payroll right now and have them jack my pay, since management don't need to be involved.

 

i know you can do better than this............

[Rovers]

housing still has a way to come down as well. so we keep propping up salaries so people can buy houses?? isnt that how we got into this mess in the 1st place? by propping stuff up? the us and cities cant afford these salaries and benefits. plain and simple.

 

Repeatedly, you bring in national issues when this thread is specifically about NYC. NYC is a case unto itself. People make a LOT more money here. The cost of living is also comensurately higher, as is the housing market. now you want to talk about pay raises, oh, wait, I thought you wanted salary cuts? Within the framework of THIS thread, NYC and pensions, almost everything you said so far is inappropriate or better, somewhat irrelevant as it relates to the topic.

 

You just want to rant on unions... fine, so go start a thread about that. I would largely agree with many of your opinions. You know nothing about this, it's a local issue, a complicated one and unless you understand the micro economy of the NYC area you are spitting into the wind. You got goobers on your face. Find some objectivity, realize that this is not a national discussion, it's about NYC and the pension problem.

[WaterMan]

Why did Rudy Giuliani allow this to happen?

[rocknrobn26]

Everybody sing!!!!!!!!!!!!!

 

Tiptoe through MY window

By MY window, that is where I'll be

Come tiptoe through the Bull Chit with me

 

Oh, tiptoe through MY delusions

MY delusions are all I see

And tiptoe through the Bull Chit with me

 

Knee deep in Bull Chit we'll stray

We'll keep the Truth away

And if I kiss you in the garden, in the moonlight

Will you agree with me?

And tiptoe through Bull Chit with me

[Yukon Cornelius]

i know you can do better than this............

we know you cant