Let california go bust and release us from these awful pension liabilities.
In my opinion State employees receive pensions that give them too much money rather than not enough. I live in New York and am in College and 6 months out of the year I work at a local state park. Every day I work I see just how lazy the year round state employees are and how easy their jobs are. Many of the heads of the park do nothing all day but sit with the guys in the garage doing the same thing. All of the work is done by seasonal employees like myself who for the entire day are out fixing the trails, cutting down trees, and filling in potholes while the older men play grab ass in the garage. These men always complain about how they don't get paid enough and how their pensions at about 30,000 dollars are not enough and they deserve more. I finally had heard enough of it one day and laid it to them. I told them how my father has worked for 40 years at a fortune 500 company, how he graduated top of his class at Syracuse and University of Illinois, how he spent every day while in college either working or studying and how he earned his top spot in Software engineering because of his hard work and how he is only receiving about 35,000 a year in pensions and is not complaining about it. How he never spent money lavishly while i grew up because he had six children. How he paid for all of our college educations and refused to accept help while doing it. He made sacrifices because he knew the difference between necessity and want. How he moved into a much smaller house than the one i grew up in because it was only him and my mother and they didnt need a big house anymore. He makes it by living as he always has, simply. On top of all his hard work he was an active member in his church and in the local education system being a member of the local school board for over 20 years. He did all of that and receives barely any more money than those lazy jerks would. They had nothing to say, a few attempted feeble arguments but most of them had either dropped out of school or only attended a year of forestry school and their arguments were fine example of ignorance and obnoxiousness. I will never feel as if I am entitled anything and my father taught me that in order to get what you want in life and to provide the kind of life you want for you family you must work for it. You must make sacrifices and learn to say no even when you want to say yes. So many people in this country think they deserve so much yet most of them don't. Most of them are people who worked in jobs that required little to no education and involved doing the same thing day in day out. My dad's job required his brain and he was constantly working on something new. I am sick of the people in this country, like all the people on Welfare who have the latest phones and nice cars. Stupidity is no excuse and to fork out money that has been paid by hard working people to pay for the stuff that idiots want but don't need is ridiculous. I will not live in this country when I am older, I will never let my children grow up in a place like this. America is a sinking ship and the uneducated, unprofessional, unmotivated, untalented, and unreal people who think they deserve more and more are the ones dragging it down. Until we finally decide to sweep them off and take care of the ones who really deserve it there will be no change.
I'm a teacher. From first day to last, I put 8.5% of my pay into the pension system. The state USED to put in 4%, but "suspended" that contribution in 1999 due to "Financial emergency." That in large part is WHY the plan is in financial trouble.
Haha that's rediculous. No way
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Ed Ring is right that there is a rising pension crisis in America but it is not about the pensions of public workers, which, despite his efforts at demonizing them, are modest.
The true focus of the pension debate should be on the fact that private sector pensions have eroded at an alarming rate. This enables Ring and the other pension busters to play off the frustration of private sector workers in factories and stores and offices who have seen their retirement plans eroded to nothing by an economy that throws away workers.
Fewer than one in five private sector workers have secure pensions, a low point in a decline that has been steady decline for decades. Only in this firestorm can the modest pensions for teachers and other public employees look large by comparison.
Modest? Yes as Ring himself notes, the average CalPERS pension is about $2,200 a month and half of all state retirees draw pensions of $1,500 a month or less. But it’s hard to argue that in 2011 a pension of $18,000 a year is excessive. So he crops the picture to suit his own ends, making the average pension seem far larger by lopping off the low of the scale and focusing on the small group of state pensioners who retired after 40 years at a high end job.
Of course these workers’ pensions are going to be substantially above the average for all and, if those are all you count, it appears there is a huge problem. But the average length of service for the largest group of state workers is just 23 years not 40, and their pension average is just $30,000 a year.
As to the teacher pensions Ring makes so much of, perhaps he should read his own sources more thoroughly. He trashes teacher retirement benefits as huge, but as the NY Times reports, Marcia Fritz, whose group would slash public pensions, put out a study that showed public school teachers’ retirement benefits are smaller than those of virtually any other type of public employee, despite frequent claims that teachers’ pensions are excessive and diverting precious dollars from education and other essential government services.
Upon seeing the modest size of teacher pensions, Fritz commented: “It’s a game changer, I had no clue.” Moreover, teachers as with those who work in public safety (police, firefighters and the like) for the most part do not receive social security.
The study Fritz cites also finds that except for workers in the lowest wage classifications, such as custodians, groundskeepers, food service workers and the like, state worker salaries are comparable to and even a bit smaller than those in the private sector.
For these public workers, decent pensions are often the equalizer that keeps them in public service.
The question Mr. Ring ought to be asking is are these modest public worker pensions too costly? And here the answer is unarguably no. State worker pensions make up about 3% of the state budget and that percentage is falling as the amount state workers contribute to their retirement costs continues to rise. Where they once contributed 5 to 8 percent of income, they now pay 8 to 11 percent. Formulas for calculating pensions have been reduced and stringent new rules are being established to eliminate abuses like spiking.
In all, such changes – made through collective bargaining – have reduced state pension costs by some $600 million over the past two years.
The changes at the local level are equally dramatic. According to data kept by CalPERS, in more than 185 California cities, counties and local districts, public employees have agreed to increase employee pension contributions, reduce formulas and lower public costs. Ring would like to make state costs look far larger by making it look as if local pension payments come out of the budget money the state passes through to local government.
Local governments already account for these pension costs, regardless of their funding source. So Ring is double counting.
Moreover, those such as Ring who are seeking to cut pensions as a supposed means of cutting public costs should note that some 64 percent of CalPERS payments to pensioners in 2010 came not from taxpayers, but from pension fund earnings on investment, which have averaged 7.9 percent annually over the last 20 years.
Pensions paid to retirees by CalPERS in 2010 were $12 billion, more than a three-to-one return over what taxpayers put into the fund in that year. That stimulated $26 billion in total economic activity and supported 93,000 jobs.
That’s the story Ed Ring ought to be telling.
And SeeSaw, so you can see that OTHERS think your comments/position are as ludicrous as I do, in an article today, the author actually went out of his way to quote YOU ... and explain just how ridiculous your position is. Here it is (what YOU said, followed by HIS response):
Adds reader "See Saw": "If all of the private sector detractors would just stand back, and let the public sector pricipals (sic) solve their respective, pension sustainability problems, things will smooth out, in the future."
"We're hearing this more and more. Just as the stock market boom in the 1990s made the expansion of pension benefits possible, an eventual economic recovery and new market growth will help the pension funds grow their way out of a $500 billion hole. But the buzz-killers at California's Little Hoover Commission demolished this claim earlier in the year: "Barring a miraculous market advance and sustained economic expansion, no government entity--especially at the local level--will be able to absorb the blow [from rising pensions] without severe cuts to services."
And here's where you can find it:
So please, tell me (specifically) what I have said is "spin" and not the true. Certainly some of what I saw is my opinion ... I'm as entitled to that as you are.
As far as "we" understanding our (California's) problems, some certainly do, but you're not one of them. Your position is always, Civil Servants are "entitled" and the (non-Civil Servant) taxpayer be damned ... no matter that Civil Servant pension contributions (together with all the investment earnings on those contributions) RARELY pay for more than 10-20% of the pensions granted. The TAXPAYERS are on the hook for the balance.
So whose talking "spin" ?
It doesn't matter what anyone else says, TL. You take the comments of every person, that you don't agree with, and spin them so that you make that person look as bad, as you can. Stay in NJ. We don't need your snide, sniping in CA. We understand our problems, and we will solve them on our own, without any help from the great TL.
Quoting ....R Kirkpatrick ..."So for almost all of us, it is theonly retirement we receive."
Haven't you even heard of SAVING ON YOUR OWN .... just like 99.9% of Private Sector workers who someday hope to retire ?
What make you (and most other Civil Servants) so "special" that your entire retirement needs should be 100% covered by a pension where TAXPAYER contributions (and the investment earnings thereon) pay for 80-90% of it ?
The numbers you cited as to retirement amounts for teachers is wildly off. At 25 years of service, a teacher at the top of the salary schedule in our district would be getting about 79,000 per year. Retirement is about 60 percent of that amount, or about 48,000. Absolutely no teacher I know receives your asserted amount of 87k a year in salary, let alone pension. And remember-educators were rolled out of social security at Reagan's behest while he was governor because he said we shouldnt be able to double dip. So for almost all of us, it is theonly retirement we receive. And calstrs contributions are dollar for dollar matches, with employees contributing fifty percent
Obviously the answer here is the same as all Liberal Politicians. Tax the Rich.
Simply cap yearly payouts of CALPERS and CALSTRS at 40k. And don't cap contributions.
Of course those wonderful public employees making over 100k will not complain, they are only paying their fair share, right?
Because numerical issues can be hard to follow in a narrative format, I think it would be very useful if someone were to generate a series of simple numerical grids (spreadsheet-style) or graphs illustrating public vs. private sector retirement incomes, years-worked vs. public pension generated, public pension share of government budgets, etc.
These devices make it much easier for the casual observer of the pension debate to grasp the ruinous, corrupt economics at play - quickly.
These occasional observers are the median voters in the political process - the fulcrum in terms of what decisions will actually be made.
Thank you for your efforts.
Two words for these gutless shills:
There is buying on credit... Then there is spending way beyond your means.... Then, there is California; spending way beyond other people's means. Just because everybody doing it, not only makes it not right, it severely compromises the ability of the nation (or the world) as a whole to recover.
It makes one wonder, is this simply institutionalized stupidity? Or are our "leaders" intentionally scuttling the worlds economy in some grand "Cloward - Piven Strategy" forcing absolute government dependance?
Answer's simple. Tax excess governmental pension income at 90%. What is "excess?" I'd say anything above 250% of the median private-sector salary. (Comes out to about $100K/yr). Any former governmental employee who cannot live comfortably on 250% of what the average working stiff makes should have gone into the private sector and the risks associated with private sector employment. Indexing the level to private sector salaries invests gummint workers into the performance of the private sector -- which should be a feature.
Richard, Couldn't agree with you more, and to add a few items you missed...
(1) Public Sector workers retire with unreduced benefits 5, 10 , even 15 years earlier than Private sector workers.
(2) And when there ARE early retirement reductions, instead of the 6%/yr (the TRUE annual, actuarial reduction that Social Security charges), it's often then half that, or even less.
(3) and let's not for get the pay spiking, and the inclusion of sick-day payouts and miscellaneous "allowances" into "pensionable compensation".
Some other points about government pensions:
1. In too many jurisdictions, the government pays the EMPLOYEE'S contribution for them. Fortunately (though belatedly) that is changing.
2. Government employees get to retire years before private sector workers -- which means even larger pension payout obligations.
3. Essentially all government defined benefit pensions include some cost of living feature, usually capped at 2%-3% annual increase. But essentially NO private sector pension includes this giveaway.
4. Government employees too often are counted as "disabled" which means that they get up to half of their pension income tax free -- thereby reducing their tax obligation by 60- t0 80%. One study found government employees on average are 28 times more likely to successfully claim disability than private sector employees.
5. "Spiking" pensions (bulking up the pension the year one retires with various legal gimmicks) is all too common.
6. In some jurisdictions, the surviving spouse gets the SAME pension with no "joint survivor" reductions.
7. In certain occupations and governments, the employees also receive excellent lifetime health coverage -- often paying little or nothing for the benefit.
Adjusting downward these public pensions is an uphill battle, though we can win some victories. It's a problem at every level of government, though local government is the biggest disaster.
BY FAR the best solution is to privatize every possible government function. Get rid of most government emplolyees ASAP.
Not only will we save money immediately via competitively bid contracts to the lower-cost, more efficient private sector, but we will eliminate the opportunity for politicians to buy public labor union support by giving away future benefits that don't have to be paid for today -- the "unfunded liability" of both pensions and retiree health care.
One popular political compromise solution is to go to "managed competition" where the public sector bids against the private sector. But these bids get rigged to keep the jobs in the public sector. One way they do it is simply not take into consideration the massive unfunded liabilities resulting from using "public servants."
One other BIG benefit of contracting out -- it guts the public employee labor union membership -- the most harmful constituency in California.
Break the backs of the unions and he bureaucrats -- contract damn near everything out.
Howell , Perhaps there is solace in knowing that one day (in the not very distant future when these Plans fails), we'll be hearing them sing ...
"but we were promised"
"but we were promised"
"but we were promised"
"but we were promised"
Paul Friedman, I hate to clue you in, but ..... depriving Public Sector Unions of their rights to collective bargaining and union busting.... are EXACTLY what we (the TAXPAYERS) MUST do.
And it's just the 1-st inning !
Quoting SeeSaw ..."If all of the private sector detractors would just stand back, and let the public sector pricipals solve their respective, pension sustainability problems, things will smooth out, in the future. "
What a hoot. In who's future, our great great great great grandchildren ?
Calm down marincountyman.
We have NO Intention of actually paying them.
SkippingDog, Interesting how with an ARTICLE giving reams of facts on how supporters of the Gov't worker largess distort and lie, you choose to comment only on a minor misstatement by a no-name commenter.
I guess you couldn't find anything substantive to refute in the ARTICLE.
The US has a labor force of well over 150 million people, even now. Of that number, slightly more than 20 million work for the government at all levels, including members of the military and public school teachers throughout the nation.
I have no idea if Mr. Zorn was insufficiently home-schooled, but 20 million isn't even close to 50% of 150 million.
This article and others like shold be circulated as widely as possible, especially to college students and young adults who find this boring. If someone paid college students to read this, it would be one of the best uses of money I know.
The pensions may be impossible to undo wihtout a bankruptcy, if it is possible for states to file one.
In the meantime, California is being fleeced like a blind tourist: unions will never voluntarily reduce benefits to any reasonable level. Not the UC professors who can retire at age 50 with a pension; not the prison guards who are paid "walking time" to walk from their cars to work (which is why they cannot be searched for contraband cell phones--the LA times reported that it would be too costly to pay them to wait and be searched, so contraband cell phones still reach inmates); not the Newport Beach motorcycle cops who are paid $5,000 in overtime to wax and polish their cycles each year. None are going to surrender their "rights."
They seem to think this can go on forever. To them, its just a matter of raising the already high income tax, sales tax, property tax. And of course, finding a way to ditch the current constitutional requirement of a 2/3 vote to raise taxes, and eliminating Prop 13 whihc capped property taxes.
They don't seem blind, they are blind. Please spread the word. Get to the young people.
Acknowledging all your facts, public employee unions in California and around the country have given back or have been willing to give back many of their current benefits. This occurred in the process of collective bargaining. The "issue" is not that unions are being asked to give back their benefits. The issue is that they are being deprived of their rights to collective bargaining and are the victims of union busting.
Why do we blame the unions for accepting benefits given to them by politicians who, basically, found it expedient to buy their votes and let the next guy worry about paying the bills? If you want to hold someone accountable, it's management/government that should be scrutinized and skewered, not the unions.
Fourth paragraph, last sentence: unfunded liabilities is half a "TRILLION" not "billion".
Back off, the attack dogs! Every public worker I know has taken a pay cut in the last couple years, and pension formulas are being downgraded, for future workers. The public sector was not at fault for the world-wide economic collapse of Sept. 08, and it has been taking the hits, as if it were, ever since. If all of the private sector detractors would just stand back, and let the public sector pricipals solve their respective, pension sustainability problems, things will smooth out, in the future.
At bottom, the problem is this - public sector unions being allowed to donate what are essentially taxpayer monies to political campaigns. Is it any surprise that ALL of this taxpayer money goes to ONE party - the Democratic Party - and in return Democrats give the people who donate lavish pay and benefits? It should have taken a rocket scientist to predict that result.
But...is it fair to allow the funneling of taxpayer monies to one political party? Why should one party get subsidized by government?
Public unions are entirely a creature of statute - there is no 'right' for public sector workers to unionize. If it is to be allowed, why not prohibit political donations, since they are being used as a means to increase wages and benefits, and are corrupting the entire political system?
As for people leaving California - Democrats do not see this as a problem, since most of those leaving are Republicans, and the population loss can always be made up from south of the border, and these people are more inclined to vote for Democrats, who give them benefits in return for doing so. So, this isn't a problem for Democrats who could care less if California is beggered in the process. There will always be a way to find the minimum amount of money to make it all work. Who cares that the state has gone from first to last on education, and the economy is failing?
Power is all that matters, and the situation in California is far from unfavorable, if you are a Democrat.
After all, it is not as if the media will point any of this out - the media is firmly behind the Democrats, for reasons that don't make sense, but it is a fact of life.
In short, from the Democrat point of view there is no problem in California that needs to be solved. Everything is perfect.
This is generational theft..pure and simple. This is not just a moral crisis of the first order, this is the moral crisis of our age. We are collectively endangering our children's economic futures without giving them the slightest say in the matter. We are doing this systematically and with malice aforethought. Worst of all, we are pretending not to notice. Shame on the unions and their crony toadie union politicians that have sacrificed our children's future by consuming future budgets for the next 30 years. Los Angeles is predicted to be BANKRUPT by 2014, San Francisco by 2016….as entire budgets are swept to pay the new $100k – 300k for life for folks retiring in their 50’s and on the take for 20 – 35 years plus free medical (that does a millionaire make and does not represent “middle class”) these unions have created the new elite – the new bourgeois - by clearly gaming and bribing the system to enrich themselves over our children and future. Pathetic….and shame on the politicians for enabling them and accepting the bribes.
Native Tarheel here transplanted to Oklahoma in the late 70's.
I have many customers from California. They have retired here and in Texas.
Love the view in Northern California. Vacation
there when I have the time. The Orwellian state is quite a bit of fun in very short doses.
I am waiting for the decree that allows immigration into California, but exiting the state is no longer allowed.
There are probably some ex-stasi union types that could help set that situation up.
Or capital could bring the jobs back on shore and restart the US economy and we could earn our way out of this mess.
Regarding the comment: "Government sector accounts to close to 50% of the country's workforce and seems to be climbing" -sounds like another Tea Party or Republican extremist basing assumtions on right-wing ideology and/or emotion.
Try 17% fed, state, or local employees, ranging from 38% in DC to 12% in Ohio. Source: Gallop Daily
After 20 yrs I won't get much, it's the medical that makes it worth it
I started campaigning in 1976 in the state of Victoria, Australia, to deal with the looming problem of the most expensive of Australian state superannuation (pension) funding obligations. I was elected to the state legislature that year and it took till 1993 to get a satisfactory result despite some usefully educational committee hearings and modest legislative improvements in the 1980s.
Good luck California!
"... averages included retirees who hadn’t worked full-time, ..."
As usual, statistics are used to hide facts. Show us the mean and mode as well as the "average". (The average wealth of the city Bill Gates lives in is pretty high.) Then show us the top 10% and the bottom 10%.
There's an odd system that's used in the public sector: employees pay into their retirement accounts, matched - up to some percent - by their employers.
Realizing that the suggestion is laughable, it still sounds like a good idea to employ that ridiculous plan in the government sector.
Especially considering that the government sector accounts for close to 50% of the country's workforce - and seems to be climbing.