This sucks! Pension costs for Fire and Police Soaring, Paralyzing Phoenix Budget (2013, fingerprints)

[Java Jolt]

Originally Posted by FirebirdCamaro1220

But they take MUCH greater physical risk than pretty much any other profession. Without some type of sweet reward, no one would do it

I agree and their on-the-job pay is rather measly considering how high-risk their occupations are.

These people take on dangerous tasks that the average person would be unfit for.

[FirebirdCamaro1220]

Originally Posted by Burkmere

There's no way the employee contributes 33% of his income into the pension fund.

You misunderstand, an employee "passes up" 33% of their salary while working to get it back when they retire. So if there was no pension, a $50k public employee would get $75k instead, but no pension. Get it?

[stevek64]

Well, it's clear this is on an unsustainable course/poorly managed and it's simply a matter of balancing the books to make this sustainable.

1.) Making workers pay more into the retirement system out of their paychecks(perhaps via new retirement tier for new workers hired)
2.) Cutting pension payouts
3.) Raising age one can collect a pension
4.) Increase taxes on Phoenix residents to make up the shortfall
5.) Review investment strategy making sure risk/reward is up to par and investments are performing properly.
6.) Kick the can down the road, no changes made, and the shortfall will continue to increase

And mix of 1-5 will fix this imbalance.

I put high odds on option 6.)

[Burning Madolf]

Originally Posted by FirebirdCamaro1220

You misunderstand, an employee "passes up" 33% of their salary while working to get it back when they retire. So if there was no pension, a $50k public employee would get $75k instead, but no pension. Get it?

Do you have a link to where your understanding comes from of how the Phoenix police and firefighter pensions work? I'm trying to follow your logic, but can't quite get it.

[Burning Madolf]

Originally Posted by stevek64

Well, it's clear this is on an unsustainable course/poorly managed and it's simply a matter of balancing the books to make this sustainable.

1.) Making workers pay more into the retirement system out of their paychecks(perhaps via new retirement tier for new workers hired)
2.) Cutting pension payouts
3.) Raising age one can collect a pension
4.) Increase taxes on Phoenix residents to make up the shortfall
5.) Review investment strategy making sure risk/reward is up to par and investments are performing properly.
6.) Kick the can down the road, no changes made, and the shortfall will continue to increase

And mix of 1-5 will fix this imbalance.

I put high odds on option 6.)

My favorite it #5. Just read last week that in Surprise projected returns were 7.5%. Actual was .7%.

Happens all over the country this way (police, fire, teamsters, doesn't matter). Friend told me he once suggested to the pension board he was on that they should project at zero, that way when they missed every year it wouldn't disappoint. He said he was only half joking.

At least the spiking is under control?

[FirebirdCamaro1220]

Originally Posted by Burning Madolf

Do you have a link to where your understanding comes from of how the Phoenix police and firefighter pensions work? I'm trying to follow your logic, but can't quite get it.

Had a friend who was retired NYPD, and moved out here. He explained the way that the City of New York does it. Where his pay his last year working (as a detective) before retirement "would have been" $120k/year, but $40k/yr went into the pension fund, so his adjusted gross afterwards was only $80k/yr. And he collects $60k/yr in pension from the City of New York now.

[pbenjamin]

Don't make the mistake of assuming that public pensions in general are a problem. Some, such as the Arizona State Retirement System, which is the largest such system in the state, are on solid financial footing. We need to fix the ones that are broken, but the solution is NOT to convert everybody to 401K style programs, unless you raise salaries to make up for it. If you take a typical IT job, for example, and compare the salaries in private industry vs. state, municipal, school district, etc. you'll see a large difference. The only reason that anyone would choose public over private is the pension benefit. Take that away and you'll never get anybody of any competence to fill the jobs.

[stevek64]

Originally Posted by Burning Madolf

My favorite it #5. Just read last week that in Surprise projected returns were 7.5%. Actual was .7%.

Happens all over the country this way (police, fire, teamsters, doesn't matter). Friend told me he once suggested to the pension board he was on that they should project at zero, that way when they missed every year it wouldn't disappoint. He said he was only half joking.

At least the spiking is under control?

Good point. I've read the same that some of these pensions funds throughout the country are managed horribly in regards to getting even a half way decent return. I think they have to post returns/it's public info so perhaps the numbers are out there.

[stiffnecked]

Originally Posted by Potential_Landlord

There's 9 private sector jobs with higher fatality rate before police and fire isn't even in there at all. Where's the pension crisis for fishers and lumberjacks? If anyone then they deserve it.



fishers and related fishing workers: 116.0
logging workers: 91.9
aircraft pilots and flight engineers: 70.6
farmers and ranchers: 41.4
mining machine operators: 38.7
roofers: 32.4
refuse and recyclable material collectors: 29.8
driver/sales workers and truck drivers: 21.8
industrial machinery installation, repair and maintenance workers: 20.3, and
police and sheriff’s patrol officers: 18.0.

You jest, eh? Fishermen and Lumberjacks are private sector employees. If they want pensions then they should negotiate that with their employers. Big differences between public and private sector.

[Burning Madolf]

Originally Posted by pbenjamin

Don't make the mistake of assuming that public pensions in general are a problem. Some, such as the Arizona State Retirement System, which is the largest such system in the state, are on solid financial footing. We need to fix the ones that are broken, but the solution is NOT to convert everybody to 401K style programs, unless you raise salaries to make up for it. If you take a typical IT job, for example, and compare the salaries in private industry vs. state, municipal, school district, etc. you'll see a large difference. The only reason that anyone would choose public over private is the pension benefit. Take that away and you'll never get anybody of any competence to fill the jobs.

While AZ is in decent shape, unfunded and under-funded public pension and health obligations are a huge problem across the country.

Also, to counter your IT example, if you take half the jobs in government, there is no private sector equivalent so those people would be doing something else or possibly nothing. It's like states that pay state employees retention bonuses (as if companies are banging at the door to steal DMV employees ), a good system gets way out of whack for political reasons.

But for this thread we should stick to police and fire because they have a different risk profile.