pension wars

[dmarc117]

http://finance.yahoo.com/news/Battle-Looms...d=pf-retirement

 

There’s a class war coming to the world of government pensions.

 

The haves are retirees who were once state or municipal workers. Their seemingly guaranteed and ever-escalating monthly pension benefits are breaking budgets nationwide.

 

The have-nots are taxpayers who don’t have generous pensions. Their 401(k)s or individual retirement accounts have taken a real beating in recent years and are not guaranteed. And soon, many of those people will be paying higher taxes or getting fewer state services as their states put more money aside to cover those pension checks.

 

At stake is at least $1 trillion. That’s trillion, with a “t,” as in titanic and terrifying.

 

everything is fine

[SEC=UGA]

Shure, along with several advocates of public workers, pointed out several reasons why they say the growing negative perception surrounding public sector wages and benefits is unfounded:

 

Contrary to widely reported tales of outrageous pension abuse, the average annual pension collected by U.S. public servants is around $20,000, according to the CBPP and the American Federation of State, County and Municipal Employees (AFSCME).

 

Only one-fourth of the money used to fund most civil service pension funds, including firefighters and police, comes from taxpayers; the rest come from employee contributions and investment returns.

 

While state pension deficits are said to be in aggregate in excess of $1 trillion, the figure becomes far less staggering when put in the context of when the benefits are slated, on average, to be paid out -- over three decades, said Steven Kreisberg, AFSCME's director of collective bargaining. "Taken over 30 years, it's 2 percent of state budgets," he said.

 

"Trust me, teachers are hardly retiring with golden parachutes and living out their years floating on yachts," said John Abraham, director of benefits for the American Federation of Teachers.

 

According to Abraham, the average public school teacher earns $50,000 and retires on an annual pension of around $29,000. Roughly two-thirds of that comes from teacher contributions and investment returns, with the rest coming from tax dollars, he estimated.

 

Meanwhile, some 25 percent of all public teachers aren't even eligible for Social Security because of opt-out provisions certain states agreed to in the 1980s.

 

"These pension funds are one of the best ways we can keep good teachers for a long period of time," Abraham said. "For taxpayers, it's a bargain."

 

In Milwaukee, where public school teachers earn, on average, around $60,000, the states financial assistance bill passed Tuesday by Congress is being welcomed as a much needed lifeline, said Mike Langyel, president of the Milwaukee Teachers Education Association, the teachers' union.

 

Around 350 city teachers who were laid off earlier this year might be able to come back to work as a result of the bill, Langyel said.

 

I found this to be interesting...

[Jimmy Neutron]

I've been saying as much for a year now - this issue will be beyond hugh.

[Azazello1313]

Only one-fourth of the money used to fund most civil service pension funds, including firefighters and police, comes from taxpayers; the rest come from employee contributions and investment returns.

 

except when those magically assumed investment returns fail to materialize or turn negative. then....oops.

Edited August 13, 2010 by Azazello1313

[SEC=UGA]

except when those magically assumed investment returns fail to materialize or turn negative. then....oops.

 

Oh, absolutely understood. I don't think that the pensions should be subsidized at all by tax payer money.

 

Hell, my social security wouldn't need to be subsidized by other's tax money if they actually had placed my contributions in a trust and not spent it (not to mention the fact that what I will see from SS is a penance compared to the contributions I will make over the next 30 to 40 years.)

 

Just giving a different perspective.

 

I would also be willing to bet that the pensions received by teachers, public "servants" is a greater % of their salary than what is received by those of us who will be receiving SS, which is complete and total BS.

[Azazello1313]

Oh, absolutely understood. I don't think that the pensions should be subsidized at all by tax payer money.

 

Hell, my social security wouldn't need to be subsidized by other's tax money if they actually had placed my contributions in a trust and not spent it (not to mention the fact that what I will see from SS is a penance compared to the contributions I will make over the next 30 to 40 years.)

 

Just giving a different perspective.

 

I would also be willing to bet that the pensions received by teachers, public "servants" is a greater % of their salary than what is received by those of us who will be receiving SS, which is complete and total BS.

 

well the smarter way to do it is what reagan did with the federal civil servants 25 years ago. divert money away from the defined benefit pension plan, and instead put it toward matching TSP (401k) contributions. the government still, on average, contributes the same amount to the employees' retirement, it just mostly goes into your individual account. which decreases taxpayer exposure to pension fund underperfomance enormously.