Comments on: Pension reform group files initiatives

By: John W.

John W. — Mon, 09 Nov 2009 23:39:45 +0000

The Time Magazine piece was interesting. I’ve been fairly fortunate with the 401k and, because of the number of times I’ve changed jobs, probably fared better with that than I would have with a defined benefit plan. I don’t have a problem with defined benefit plans, so long as the promised benefits are actuarially sound, which public employee pension plans definitely are not.

By: Robert

Robert — Sun, 08 Nov 2009 04:28:13 +0000

If you get a chance read the Time Magazine article or view the PBS Frontline investigation on retirement. Very enlightening.

http://www.time.com/time/business/article/0,8599,1929119,00.html

http://www.pbs.org/wgbh/pages/frontline/retirement/view/?utm_campaign=viewpage&utm_medium=grid&utm_source=grid

By: John W.

John W. — Sat, 07 Nov 2009 10:58:03 +0000

Note to David. With the aging population and the declining ratio of workers to retirees, neither the private nor public sector can afford to fund these plans — for new hires. As for the statistic about the “average” pension, it’s meaningless. The measure of reasonableness is the size of the pension benefit payout over a person’s retirement lifetime (including cost of living adjustments) relative to what the person was paid by the employer during his or her working years. No employer, public or private, can afford full or near full pay for two workforces — one working and another retired. The only way to cover future pension obligations is to raise taxes or cut public services (which means fewer jobs in the agencies that provide those services). In my opinion, those calling attention to the pension issue have made a stragegic mistake by focusing too much on the extreme cases. That makes for good headlines, but gives people the impression that the need for a pension fix is limited to those few examples and hurts the case for broader reform, as evidenced by the frequent use of “average pension” statistics to argue there is not a problem.

By: judy

judy — Sat, 07 Nov 2009 05:47:48 +0000

Yup!Public unions say taxpayers be damned !

By: Kris Hunt

Kris Hunt — Sat, 07 Nov 2009 05:13:26 +0000

Immediately following the filing of the pension initiatives, the teachers union filed two initiatives that would create a split roll property tax. Apparently it is going to be hardball.

By: judy

judy — Sat, 07 Nov 2009 01:55:51 +0000

No, 50% or median of people would be too low. Most people with the ability are moving out of state. Ca is mostly going to be a state of public employees, welfare recipients, and cash under table illegals…going to be hard to fund if we don’t REAL about retirement ages. Retirement age would still be much below the real world.

By: Concordian

Concordian — Sat, 07 Nov 2009 01:33:53 +0000

Why not a simpler approach of a cap on retirement benefit? The public servants (including police/fire etc) cannot receive a retirement that is greater than the median income of someone in the state of California. This way you are not gong to have people making more money than 50% of the people in the state.

By: judy

judy — Sat, 07 Nov 2009 01:27:53 +0000

IF, that’s IF CA is to survive, this must pass. We don’t need to hear about poor older retirees, The GRAND THEFT has only been happening in the last 10 years. Just like, what was then, isn’t now, and what is proposed will NOT affect anybody NOW, so we don’t need to hear from anybody currently employed. The big changes are about NEW hires. Any employee with any decency will HELP SAVE CA WITH SENSIBLE CHANGES…more IN LINE with the REAL WORLD !!!

By: David

David — Sat, 07 Nov 2009 00:01:25 +0000

Instead of dragging public employees down by destroying their retirement income, why don’t people spend their time trying to improve pensions in the private sector, so that they are as good as public ones? Anyone in the private sector who wishes their retirement plans were better is only cutting off their nose to spite their face by slashing somebody else’s retirement. Better you should use their retirement benefits as an example to your own employers, to enable you to demand parity with public employee pensions. Also, the average pension of California public employees is $25,212, and 78 percent of all retirees receive less than $36,000 per year. Does that sound shockingly exorbitant to you? It doesn’t to me. If the problem is the relatively small number of people who receive extremely large payouts, then go after them directly: there is no need to cut the relatively modest pensions that the vast majority of public employees receive.

By: John W.

John W. — Fri, 06 Nov 2009 23:26:43 +0000

It’s good to see this finally making its way to the voters. However, you know how big the problem is when even what the reformers propose is too generous relative to private sector standards. Waiting to Social Security retirement age to get full benefits for non-safety employees is on target. But the income replacement rates are still too high. And there shouldn’t be cost of living increases. I assume the 75% replacement cap is for safety people and that we’re talking 60% for non-safety. Few in the private sector get any kind of defined-benefit plan anymore. But, for those who do, the replacement rate at full-retirement age (usually 65 or age+years of service = 90) is less than 50%. The idea is that pension plus Social Security replaces about 80%. Plus, there normally are no cost of living adjustments. The starting pension amount stays at that amount for life. If you choose to retire early — say at 60 — the pension benefit would typically be reduced 5 percentage points for each year under 65. To be fair, at least some public employees contribute to their pension plans, whereas private sector people generally don’t. To the extent public employees really do contribute (not the wink-wink deals like BART where the employer pays the employee share), I suppose a somewhat more generous replacement rate can be justified. But we still have the problem of the taxpayers (as the employer) bearing all the pension investment risk, which isn’t working too well of late. For safety, the higher replacement rate should not apply to the upper incomes earned in the chief and deputy chief positions, when the wear and tear and career shelf-life factors are not relevant. If you make it to that level, you can serve until a normal retirement age. Still, the proposed reforms would be a huge improvement over the status quo.