Does anybody understand the Public Employees Pension situation? (unemployed, salary)

[Vascodagama]

Originally Posted by Phil306

Don't bet your bottom dollar on this. Remember, the state legislature, govenor, lieutenant govenor, judges, prosecutors, et al are in the same retirement system. For the assembly to vote to get rid of the retirement systems, they are voting to get rid of their OWN retirement. Many of these people have been in state government for 30+ years and are counting on that money.

Not too many people are going to shoot themselves in their own foots.

The corrupt state politicians made these contracts and never funded them properly and they must have known the cost would get unsustainable. I would imagine the state would go after private companies that did the same thing. At the end of the day the state does not have the capability to honor the contracts.

[Lovehound]

Originally Posted by Don9

At the end of the day the state does not have the capability to honor the contracts.

At the end of the day the state has very deep pockets, reaching all the way to your pocket and my pocket and every taxpayer's pocket. Maybe you understand now why I'm fixin' to get the hell out of California!

And yes, I understand that many if not most other states have similar problems. I am leaping first (selling my house) and then hitting the road (RV) and I'm planning on visiting places I think look interesting to live, and I'm going to do my research on the spot and make my decision to plop down (buy my next house) when the time seems right. Lucky me at least I won't have to worry about income taxes. (A little bit of sarcasm there, no income = no income taxes.) Tax-wise I'll be mainly concerned about property taxes and sales taxes.

If the state has to do it then I expect they'll enact whatever taxes they need to meet their financial obligations. If the state does not honor public employee retirement benefits then I expect the court will compel them to honor them. I doubt the courts can compel the state to enact taxes but I'm pretty sure it will result in a colossal mess. I don't see any way it won't be extremely unpleasant for every taxpayer in the state.

It will be interesting to see what happens when the taxpayers/voters want to enact a constitutional amendment to try and weasel out of paying retirement benefits. I'm pretty sure that will go all the way to the Supreme Court if any such measure passes the vote.

I wonder what the state is going to do when it's got to choose between paying welfare benefits and paying retirement benefits.

[.highnlite]

Dadgum Phil, you done good, these posts are not only the first you have made that was based on facts, you got all the facts right, Kudos.

As a further extension, those of you who complain about pensions, what is your retirement plan? SS? Stock Market?

Municipal bonds? I hope not, that is another bubble about to burst.

[Vascodagama]

Originally Posted by Lovehound

At the end of the day the state has very deep pockets, reaching all the way to your pocket and my pocket and every taxpayer's pocket. Maybe you understand now why I'm fixin' to get the hell out of California!

And yes, I understand that many if not most other states have similar problems. I am leaping first (selling my house) and then hitting the road (RV) and I'm planning on visiting places I think look interesting to live, and I'm going to do my research on the spot and make my decision to plop down (buy my next house) when the time seems right. Lucky me at least I won't have to worry about income taxes. (A little bit of sarcasm there, no income = no income taxes.) Tax-wise I'll be mainly concerned about property taxes and sales taxes.

If the state has to do it then I expect they'll enact whatever taxes they need to meet their financial obligations. If the state does not honor public employee retirement benefits then I expect the court will compel them to honor them. I doubt the courts can compel the state to enact taxes but I'm pretty sure it will result in a colossal mess. I don't see any way it won't be extremely unpleasant for every taxpayer in the state.

It will be interesting to see what happens when the taxpayers/voters want to enact a constitutional amendment to try and weasel out of paying retirement benefits. I'm pretty sure that will go all the way to the Supreme Court if any such measure passes the vote.

I wonder what the state is going to do when it's got to choose between paying welfare benefits and paying retirement benefits.

I'm one step ahead of you ... sold my house before the housing crash.

[Lovehound]

Yeah Don, but I may still be able to sell my house before THE housing crash.

[Phil306]

Originally Posted by Don9

The corrupt state politicians made these contracts and never funded them properly and they must have known the cost would get unsustainable. I would imagine the state would go after private companies that did the same thing. At the end of the day the state does not have the capability to honor the contracts.

The currupt state politicians made these contracts with YOUR approval. YOU made these contracts possible. For, if you and everyone else were truly against these contracts, you would have said so, 20 years ago. You did not. You kept your mouth shut and hid. You said good, lets show this country how socialism works.

NOW, its time to pay. And you don't want too. If the stock market and the economy were good, this would be a non issue. You would be voting for better retirements for our public employee's.

YOU are to blame; not me or anyone else. YOU. YOU allowed it, endorsed it, and brought more to the table.

If this were not true, you would vote the persons responsible out of office. You won't, ofcourse. You whine, *****, complain and moan. But you won't do anything, but complain, anonymously on an internet board, about your problem. VOTE your liberal democrat leaders out of office.

Oh, but wait, that will mean you will lose money out of your pocket. The pocket which takes from everyone else, to give to you.

[wehotex]

Originally Posted by Curmudgeon

I understand it to a fair extent. I retired from the state a little over two years ago so I try to stay current since I do have a dog in this fight. Read on.



This might help explain some of it.

Daniel Borenstein: Ballot measure would reduce future public employee pension benefits - ContraCostaTimes.com



Hi, Guy. Thanks for the vote of confidence. I'm one of those "greedy bastards" who's already retired and receiving a pension from the state after 25 years of service. My bad!

Guess you missed the part about the employees and their bargaining units agreeing to increases in retirement withholdings.

Thanks for your service, curmudgeon

[wehotex]

Originally Posted by Lovehound

The article was interesting although doesn't quite answer my question, except perhaps reading between the lines that evidently the pension fund can't go broke because the state is responsible for it and a US state cannot declare bankruptcy. I don't have any argument, I've said all along that a contract is a contract and cannot be arbitrarily backed out of just because one of the parties doesn't like it anymore. If the pension fund was a separate entity and went bankrupt then that would open the possibility of the retirees losing their benefits, but evidently that's not the case. I believe such has either happened or is likely to happen in some private pension funds, raising the specter of the government being asked to fund them (bail them out) from Social Security.

I quarrel with the characterization of public employees being "greedy bastards." They took the best deal they were offered. I would have taken it myself, and in fact in just the last couple years I've lamented that I didn't work in the public sector instead of having my career in private industry. I've made maximum contributions to my IRA/401k every year I was able (was unemployed in other recessions and couldn't contribute anything) and my friends who worked in the public sector now have retirements about quadruple what I have. (And that doesn't even include their generous health plans.) I wish I had realized this years ago. I thought I had a good plan but evidently not. Too bad, there's no going back.

The real blame goes to the politicians and political parties who made overly generous contracts with public employees and their unions, and to stupid voters who allowed their elected politicians to do that. Voters, these are your chickens coming home to roost. Likewise to those who didn't vote at all.

I don't see how California and the cities and counties can afford to pay out these benefits. Furthermore I don't see how the federal government can continue to pay out Social Security benefits. It's like a speeding train and trouble on the tracks ahead, too late to slow down and no place to turn. We're headed for a train wreck!

I've always heard that public sector jobs pay LESS than private sector ones. Aren't the benefits supposed to be the extra perk that makes it worthwhile? If the workers agreed to this back when they were working, I think that it is a promised benefit that should be provided to them in their retirement.

[Vascodagama]

Originally Posted by Phil306

The currupt state politicians made these contracts with YOUR approval. YOU made these contracts possible. For, if you and everyone else were truly against these contracts, you would have said so, 20 years ago. You did not. You kept your mouth shut and hid. You said good, lets show this country how socialism works.

NOW, its time to pay. And you don't want too. If the stock market and the economy were good, this would be a non issue. You would be voting for better retirements for our public employee's.

YOU are to blame; not me or anyone else. YOU. YOU allowed it, endorsed it, and brought more to the table.

If this were not true, you would vote the persons responsible out of office. You won't, ofcourse. You whine, *****, complain and moan. But you won't do anything, but complain, anonymously on an internet board, about your problem. VOTE your liberal democrat leaders out of office.

Oh, but wait, that will mean you will lose money out of your pocket. The pocket which takes from everyone else, to give to you.

I don't blame you for the problem. I don't blame me for the problem. I have been voting against liberals in California all my voting life. The liberals have ruined this state and this pension crisis is yet just another example. I never voted for extravagant pensions with healthcare for life for the public employees. That's ludicrous, no one gets that. Most people don't have a pension; they just have 401K and social security.

I'm a realist and I can look at the situation and see there are limited options here to resolve the problem. The bottom line is the corrupt politicians and public employee unions lied to the public employees and the general public. The problem is not caused by the recession; the ponzi scheme was just prematurely exposed because of the recession. This crisis was going to be realized even if the economy was good.

[Curmudgeon]

Originally Posted by wehotex

I've always heard that public sector jobs pay LESS than private sector ones. Aren't the benefits supposed to be the extra perk that makes it worthwhile? If the workers agreed to this back when they were working, I think that it is a promised benefit that should be provided to them in their retirement.

That was true when I started in county and then state service following my federal service. Over the years I think some measure of parity was achieved in salaries but the benefits certainly rose in value as corporations off-shored, down-sized in the states and chipped away at benefits previously offered while often laying off people nearing retirement and before they were vested. By the time I retired, public service wasn't a bad gig at all.