Public Pensions

How long will “public pensions” exist?

Question of the day: How long will (or can) public pensions for government employees last?

public pension dollarsThe reason I ask is, that it’s quite mind-blowing how much these local governments expect to siphon money from others to pay (former) (city, state, school, [insert agency name here]) employees for decades and decades after they’ve actually contributed anything at all! Often at multiples of what they earned while they worked! Not to mention that most of these hacks didn’t really do anything while they did work! Shuffle papers, kiss ass, look the other way? What a racket!

What re-invigorated my disdain for the whole concept was when I stumbled on this article from a few years ago, how the top 100 pension receivers in the Illinois Educational system (just 100 people) will receive close to $1 billion dollars of other people’s money for the course of their “retirement.”

I’m sure at some given point in time – the general populous might have seen merit in “rewarding” someone who risked their lives for the benefit of society. Let them have a nice “retirement.”

But what often happens is that these people double, and triple dip into the system, and build a massive amount of wealth at the expense of others. A huge chunk of Hoboken’s annual budget is dedicated to pay people who are sitting on the beach or working other jobs. How screwed up is that?

billions of dollars public pensionsThe most astonishing fact is that now because so MANY people are beneficiaries of this type of system (countrywide), that it’s insanely difficult to build momentum to reform the process. They almost outnumber people who DON’T receive this meal-ticket to Easy Street!

Sadly – a very small minority of the population understands that it’s 100% unsustainable – and will come crashing down at some point in time. Not if, but a matter of when. Perhaps this is a good message for younger folks in the system who are “dreaming” of a lavish retirement – to start hedging their bets to look for more sustainable future revenue sources. Don’t count on it guys, just because you were told, or “they said so.” Just read a few history books (that haven’t been revised) to find out what can happen.

My $0.02 for the day here. Have a nice day, dreamers!

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5 Comments on "Public Pensions"

rich k
Member
rich k

The real problem, and one not easily fixed, is that for decades our public officials negotiated retirement benefits with no plan in place to pay for them, or if they initially did, succeeding administrations at all levels couldn’t resist the temptation to steal from that pot to pay for today’s frills or even necessities. I’ve worked public and private sector. One of the big inducements on the public side has always been “accept a lower (often much lower) paycheck now, for a good retirement later, while you’re still young enough to enjoy it.” Break that promise, and your pool of willing works will dry up, as Kansas and other states are discovering with teachers, the current scapegoats for irresponsible governance.

Ironically, the Congress’s mean spirited effort to kill the USPS in 2006 by forcing them to fund 75 years of retirement costs in just 10 years is an example of how to do it right. The Post Office is now completely independent of the Federal Government for funds, and is paying it’s own way. But most governmental services do not pay for themselves directly, they provide, through taxes, the common foundation (roads, sanitation, basic research, police, fire, courts, etc.) that private individuals and companies need to function.
Hoboken, and New Jersey as a whole, missed the golden opportunity in the last 20 years to upgrade infrastructure, including funding and right-sizing pensions, by insisting that the developers who profited so greatly contribute their fair share to the services that made their projects valuable.

HansBrix
Member
HansBrix

While not as notoriously abused as public compensation systems, things ain’t rosy in the private area either.

Defined benefit plans are all but extinct (for anyone hired within the last 10 – 20 years). For those grandfathered in, many have a glowing bulls eye painted on their backs which is quite visible to cost cutters with layoffs in mind.

Both systems suffer from wildly optimistic investment return assumptions made long before the zero interest rate era.

But don’t worry we can always rely on social security!

escaped68
Member

WHEWWHEW

YOU ARE A DOUCHE BAG

whewwhewwhew
Member

Seems fair to work 20 years as a fireman and then collect 80% of your salary for the next 40-50 years plus free healthcare. Most of these guys double dip while working by owning Plumbing or Roofing companies as well. Sit in the fire house for 35 hours a week gawking at girls while pretending to wash the truck outside and be paid for life. Look at the top 10 most dangerous jobs and Fireman and Police don’t even appear on this list. They will tell you this is why they deserve this but what about fisherman? Convenience store clerks? All higher death rates.
I love a few years ago when the city laid 2 cops off and at the town hall meeting they marched up about 50 people telling the council how the poor guy was about to be married and had to call the whole thing off because he was losing his job. Welcome to the real world.
Remember the Hooters trip? I am sure those guys are all getting their 80% to this day.

briank
Member
briank
You are off a little bit but the message is basically correct in intent. It is 25 years for Hoboken and the average is closer to 70-75% of allowable salary. Take a look at nj-pensions.findthedata.com It is really amazing how much is paid out. A generation ago, government workers were given the long term benefits to make up for lower salaries vs the private sector. But now the government salaries have outstripped private sector ones, while the benefits and short amount service required have stayed the same. The abuse of the system then comes from the back loading of sick and vacation time into the last year of service (creating a balloon payout, which is then used in the 3 year average calculation to determine the ongoing pension payout. For instance, a guy gets paid $89k per year, but his last year gets $125k because of built up sick and vacation time. Now instead of getting 75% of $89k, he gets 75% of $101k). The other huge abuse comes from disability payments- about 66% of FDNY firefighters collect disability. nypost.com/2015/06/17/2014-fdny-retirees-taking-in-100k-pensions/ Other unions have been caught with similar exaggerated disability claims upon retirement, most notably the MTA. We need longer service (for instance firefighters who physically can not perform some tasks should be reassigned other roles at lower salary reflecting less important roles). 25 years of service is absurd. And no government employee should be able to collect more than one pension. (This wouldn’t be a problem if public employees weren’t… Read more »
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