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Old 10-25-2010, 12:01 AM
 
7,420 posts, read 8,106,724 times
Reputation: 2940
Quote:
Originally Posted by wellyouknow View Post
I've never been a state employee, so I don't know how it works, but isn't it unfair that state employees are *entitled* to a pension just by the virtue of being hired on the tax dollars by the sate, whereas the majority of the taxpaying population (which pays for those state employee pensions) being employed by private firms must fend for themselves with 401Ks and IRAs private retirement plans which are mostly a stock gamble?

I would abolish these state guaranteed pensions altogether and have the state employed folks have to do what every other employee has to - 401K, IRA, private retirement funds... WITH THE SAID EMPLOYEE HAVING TO CONTRIBUTE THEIR OWN, OFTEN AS HIGH AS 100%, PORTION (when the firm doesn't do the matching).
If you don't know how it works, I advise you go find out how it works before commenting on it. I know it is out of fashion these days, but knowing how things work is often considered a very important factor in understanding them and providing intelligent (or at least meaningful) opinions about them.

As mentioned above, state employees contribute a portion of their paycheck to the pension fund, and the employer matches that amount. It takes years to vest into the pension and more years to be eligible to receive any retirement benefit--and years beyond that before the benefit is really enough to retire on, unless you are someone on the very high end of the state pay scale.

The overall fund for PERS is the same sort of "stock gamble" as a 401K, really--it works like a big, relatively low-risk mutual fund. Its value goes up in good years and down in bad years. Because it is designed to be relatively low risk, it doesn't skyrocket in good years (and then it gets criticized for not investing in things like junk bonds, dot-com stocks and mortgage derivatives) and doesn't plummet that badly in bad years (sure, PERS took a 25% hit in the last crash, but that's actually pretty good compared to the 40-50%+ hit a lot of mutual funds took in the same crash.) The advantage of pooling money and investing over time is that time and pooling limit risk--it's not like playing Lotto or picking individual stocks. The key to retirement wealth in the stock market is "Get Rich Slowly"--invest over time, and in the aggregate over decades, generally you'll make money.

The product is similar to something you can purchase in the private sector, called an annuity. Basically, you give a company a lump sum, and they pay you X dollars a month for the rest of your life. It's kind of a bet, like life insurance in reverse--they're betting you die before you get your money's worth of that annuity, you're betting you don't die. But the money is guaranteed as long as the fund exists.

All of this is pretty standard if you are familiar with private-sector retirement options...and I assume that you completely understand how those work, right?

But really, no, it isn't fair that private employees don't have pensions...because they used to! Private industry took them away and traded them for the 401(K), which was never really intended as a retirement account, more of a tax dodge. Maybe we should go back to insisting that corporations provide pension funds for private workers again, the way they used to.

And, as curmudgeon points out, the good retirement package for state employees is intended to make up for the rather pokey paycheck. State employees tend to be older and better-educated than the private sector workforce, and if you take into account the age and education of the average state worker, they are actually underpaid compared to the same jobs in the private sector.
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Old 10-25-2010, 12:20 AM
 
Location: Dublin, CA
3,814 posts, read 1,813,190 times
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Yep, remember this when you go to the polls. Who was it who made these pensions the way they are? Jerry Brown and guess what, you LIBERALS wanted it. You wanted it, you voted for it, and you approved it. You are only upset, because: YOU aren't getting it; if you were, this would be a non issue.

However, guess what? You liberal/socialists in California (I live in CA, but definately am not a liberal), are going to re-elect, the same person, who started these pension programs to begin with. You people are fools and idiots. However, I will benefit, so I could care less. Re-elect Moonbeam.
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Old 10-25-2010, 07:16 AM
 
7,151 posts, read 4,155,316 times
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Quote:
Originally Posted by Phil306 View Post
... However, I will benefit, so I could care less...
Perfect ... a shining example ... this, Phil, is exactly the problem of which politicians are merely a symptom ... it's called 'human-nature' revealed ... 'liberal' / 'conservative' have nothing to do with it all.
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Old 10-26-2010, 07:05 AM
 
Location: San Diego California
5,975 posts, read 3,227,389 times
Reputation: 4230
Quote:
Originally Posted by NewToCA View Post
While not disputing pensions are certainly an issue that both parties agree need to be addressed, let's also put the problem in perspective here.

This publication objectively analyzes the pension funding in multiple states, and finds California is in relatively good shape overall:

Pension liability: $454 billion
Percent funded: 86.89%
Employees in Pension Plans: 1,995, 169
California finds itself at the bottom of the list with the highest unfunded pension liability: $59.49 billion. Although the Golden State has the largest outstanding balance, it's still funded above the GAO-recommended 80 percent level. The state also has the highest amount of assets with $394.46 billion, with New York in a not-so-close second of $151.68 billion.


Pension Preparedness
Here is some reality for you.....

To keep their promises to retirees, the California Public Employees Retirement System, the biggest plan, the California State Teachers Retirement System, the second-largest, and the University of California Retirement System may have combined liabilities of more than 5.5 times the state’s annual tax revenue by fiscal 2012, according to the study released today by the Milken Institute. Levies are forecast to reach about $89 billion in the year that began July 1.
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Old 10-26-2010, 07:43 AM
 
Location: Sacramento
13,450 posts, read 15,901,321 times
Reputation: 5245
Quote:
Originally Posted by jimhcom View Post
Here is some reality for you.....

To keep their promises to retirees, the California Public Employees Retirement System, the biggest plan, the California State Teachers Retirement System, the second-largest, and the University of California Retirement System may have combined liabilities of more than 5.5 times the state’s annual tax revenue by fiscal 2012, according to the study released today by the Milken Institute. Levies are forecast to reach about $89 billion in the year that began July 1.
And, in keeping consistent with my quoted post, how much of that (as a %) is already funded?
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Old 10-26-2010, 08:05 AM
 
Location: Sacramento
13,450 posts, read 15,901,321 times
Reputation: 5245
Looking at the complaints about public sector employees, it all dovetails down to a single aspect, there is a segment of our society who believes that they are overpaid. All of this stuff about pensions and other benefits is just another way to get to that central point, but it still comes down to being overcompensated.

So, in light of this overall sentiment, here is an analysis from Cal Berkeley evaluating public vs private employee compensation (public document, not subject to copyright):


What is the relative pay and total compensation of public sector workers compared to those in the private sector? The CPS data on earning with the ECEC data on benefits allow us to answer these questions.

The ECEC data are employed to calculate total employer compensation costs for each employee in the sample. Each observation has an earnings and total compensation measure. Table 5 reports the results of a standard earnings equation on four measures: annual and hourly earnings; and annual and hourly total compensation.

The estimates represent the earnings and total compensation premium of California state and local government workers relative to private sector workers. Columns 1 and 2 provide estimates for employee wages. The annual wages of state and local California public employees are 7.77% less than comparable private sector workers (earning results are all statistically significant). The estimates in rows 2 and 3 separate out state and local workers. State workers earn 7.55% less than workers in the private sector and local government workers earn 7.86% less. The results in column 2 compare hourly wages. Overall, the hourly wages of California’s state and local employees are 6.36% less than employees in the private sector. Separately, the hourly wage gap is 8.92% for state and 5.38% for local government workers in California.

Now that it has been established that public sector workers are not overpaid what happens when benefits are considered? Results on total compensation, annual and hourly, show that the more generous benefits received by public sector workers is just enough to make up for the significant negative wage gap—these results are reported in columns 3 and 4. Importantly, the point estimates are very small and none of the estimates are statistically different from zero. There is no measurable difference in total compensation between public and private sector workers.

The results presented here provide strong evidence that California public employees are not over-compensated when compared to similar private sector workers.


http://www.irle.berkeley.edu/cwed/wp/2010-03.pdf

Last edited by NewToCA; 10-26-2010 at 09:24 AM.. Reason: edited to correctly format the paragraph structure
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Old 10-26-2010, 09:20 AM
 
7,420 posts, read 8,106,724 times
Reputation: 2940
The "add to reputation" button won't let me add to yours for that, NewToCA, but thanks for linking that report. Nothing like a fast application of facts to dispel ignorance, or at least make it wander off in a daze.
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Old 10-26-2010, 10:58 AM
 
7,151 posts, read 4,155,316 times
Reputation: 3806
Quote:
Originally Posted by wburg View Post
The "add to reputation" button won't let me add to yours for that, NewToCA, but thanks for linking that report. Nothing like a fast application of facts to dispel ignorance, or at least make it wander off in a daze.
... what wburg said ...
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Old 10-26-2010, 11:48 AM
 
2,659 posts, read 2,928,517 times
Reputation: 1254
Quote:
Originally Posted by bulldogdad View Post
A violent public reaction is the only thing that is going to get the people of the this state off their fat tit sucking asses and elect the right people to run this state. I for one support a France style revolt except for the opposite reasons less government spending. Even then who knows?

Keep it up you stupid assed Californians.


http://www.youtube.com/watch?v=dLVND6mJ5-U
please move to kentucky and never come back
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Old 10-26-2010, 02:30 PM
 
Location: Hills & Hollers of the Aux Arcs
18,986 posts, read 15,762,943 times
Reputation: 16840
Quote:
Originally Posted by Majin View Post
please move to kentucky and never come back
What do you have against Kentucky? I was stationed there years ago and drove the length of it last year. It's a lovely state.
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