CA Unfunded Pensions Approach $1 Trillion (unemployment, luxury, tax rates)

[leonard]

Originally Posted by SportyandMisty

2) ALL payments to public sector union retirees should be deducted from the paychecks of currently working public sector union employees. ZERO should come from taxpayers. That way, the cry to increase compensation to retirees has a real cost to current employees. That way, the union has a real function - to take care of its own. It should be a discussion between current workers & retirees rather than a discussion between employees and the government where the government is always seen as a money tree.

Now there is a thought.

Social Security is paid or by all workers who can later draw from it. Public pensions, like private ones, should be paid for ONLY by those who will draw from it, the public employees.

[nullgeo]

Originally Posted by user_id

It is, but nothing has been done because the boomers are still the largest voting bloc.

What...you mean the "social contracts" that were created by and for the benefit of the boomers at the detriment of younger generations?

Its not a "social contract" when the decisions were one-sided........but this is going to work its way through the system one way or another. The least painful, for everyone involved, will be one of mutual sacrifice....but the boomers aren't interested in that. "Its mine...I was promised it". So....instead brutal austerity will be forced on younger generations to pay for the entitlements but the austerity will destroy the economy (largely by devaluing its human capital) and along with it the entitlements will vanish to even a greater degree. America is awesome!

I did not realize that only "boomers" are covered by these contracts -- that younger generations have separate, less lucrative deals ... except that's not true, is it ... many younger, non-boomer, public workers are working toward retirement under the same benefits as the "boomer" generation. In fact, many of today's pension deals have been struck by negotiations with boomers and non-boomers alike.

[darkeconomist]

Originally Posted by nullgeo

I did not realize that only "boomers" are covered by these contracts -- that younger generations have separate, less lucrative deals ... except that's not true, is it ... many younger, non-boomer, public workers are working toward retirement under the same benefits as the "boomer" generation. In fact, many of today's pension deals have been struck by negotiations with boomers and non-boomers alike.

Not so much the case for the most recent generation of college graduates, Millenials, for whom there is a rough road ahead of smaller incomes and larger burdens.

[nullgeo]

Originally Posted by darkeconomist

Not so much the case for the most recent generation of college graduates, Millenials, for whom there is a rough road ahead of smaller incomes and larger burdens.

Not the point. The point is that user_id is saying that the boomers are responsible for irresponsibly hijacking the future selfishly. My point is that boomers are not the only generation covered by the kinds of pension plans considered now unsustainable. Nor were they the sole negotiators of these pension plans over the years.

I don't have any real argument with the observation that many pension plans are unrealistic and unsustainable. I have issue with singling out boomers as the evil and sole beneficiaries. Human nature is the guilty party.

What to do now that the deals have been made and people planned and lived their lives around contracts that are too costly to continue? Good question. Simply blame one generation and demand concessions is both wrong and overly simplistic.

[user_id]

Originally Posted by nullgeo

I did not realize that only "boomers" are covered by these contracts -- that younger generations have separate, less lucrative deals ... except that's not true, is it ...

Hogwash..... Not only are two-tier systems relatively common solutions to pension issues, but you also have to look at contribution levels in relation to benefits. For example, if the boomers contributed 7% of their salary and younger cohorts contribute 10% and both groups receive the same benefits then clearly the boomers are receiving larger benefits that are being subsidized by the younger cohorts.

You can find examples of both, that is two-tier systems and higher contributions for younger works throughout California. So...it is in fact happening.

Like you're demonstrating now, mutual sacrifice is totally off the table because boomers think all their entitlements are fair and really don't care what happens with younger generations...... Of course the irony is that when you steal from your children....you are ultimately stealing from yourself. But when have Americans ever thought past a few years?

[nullgeo]

Originally Posted by user_id

Hogwash..... Not only are two-tier systems relatively common solutions to pension issues, but you also have to look at contribution levels in relation to benefits. For example, if the boomers contributed 7% of their salary and younger cohorts contribute 10% and both groups receive the same benefits then clearly the boomers are receiving larger benefits that are being subsidized by the younger cohorts.

You can find examples of both, that is two-tier systems and higher contributions for younger works throughout California. So...it is in fact happening.

Like you're demonstrating now, mutual sacrifice is totally off the table because boomers think all their entitlements are fair and really don't care what happens with younger generations...... Of course the irony is that when you steal from your children....you are ultimately stealing from yourself. But when have Americans ever thought past a few years?

Obfuscation sir.
Boomers are not the only beneficiaries of these negotiations ... nor the only negotiators of the plans.
The existence of "two-tier" systems doesn't cover all cases, and likely not even a majority. Whereas you are making a blanket accusation.
Your citation doesn't disprove my point ... to which point you are adding assumptions about things I have never said.

I never said it was or wasn't happening, so I don't know why you are italicizing that.
I have never said that mutual sacrifice is "off the table" ...
Nor have I ever stated that I think boomer entitlements are fair ...
Nor that I don't care what happens to future generations ... in fact it is quite obviously the case that people like me have sacrificed greatly with concern for future generations.

I said: you are aiming blanket accusations of willfully irresponsible selfishness at an entire generation -- many of whom aren't involved in any way whatsoever with unions of course -- and of willful disregard of future generations. Your accusations are out of line with facts and decency both. How you can select an age group and assign to it moral depravity differing from humanity at large is beyond me. As if boomers have a uniquely altered and flawed genetic makeup from the rest of the species. Ridiculous.

The causes of the reality are not immoral disregard, as you seem to suggest. The stupidities behind the plans are not unique to boomers. And the problems and solutions are complex. You lament the future -- which hasn't happened so we don't really know what it holds for ability to pay -- though I agree it doesn't look easy. At the same time you don't acknowledge the past lives lived under commitments and assumptions about outcomes. If the boomers knew their plans might be taken away, how differently might they have lived their lives and prepared for their retirements?

As I have said before, each generation does have to pick up the pieces and figure out how to pay for where the previous generation got them. There are plenty of gifts from the past to go with the liabilities.

[user_id]

Originally Posted by nullgeo

Boomers are not the only beneficiaries of these negotiations ... nor the only negotiators of the plans.

Of course they are. Though obviously generational lines are rough and things are crafted statistically.

Show a proposal for a two-tier system that gives improved benefits to younger workers. You won't find it...without fail two-tier systems are used to reduce younger workers' benefits while keeping the benefits of the boomers intact.

This isn't just about California either, the same tricks are being tried with social security and medicare. Folks are pushing for reduced medicare for younger workers and the cut offs are, you guessed it, roughly the dividing line between Generation X and the boomers.

Originally Posted by nullgeo

The causes of the reality are not immoral disregard, as you seem to suggest.

Whether or not the boomers have been the most short-sighted and selfish generation isn't the issue. The boomers are the only generation that had the power, given its large size, to control national politics. As a result, even if other generations were just as selfish they couldn't achieve the same results.

Originally Posted by nullgeo

At the same time you don't acknowledge the past lives lived under commitments and assumptions about outcomes.

Yep...and the reason is real simple. The "commitments and assumptions" were created with complete disregard for younger generations in an era when today's young workers couldn't even, in principle, vote against them. Why should younger generations honor a social contract that robs them of their future...that they never agreed to in the first place?

Originally Posted by nullgeo

There are plenty of gifts from the past to go with the liabilities.

There are? Like what? What gifts have the boomers blessed the nation with?

[TVC15]

Things are not going to improve for the US until the entitlement mentality ceases to exist and we become a nation of manufacturing.

Stephen Moore: We've Become a Nation of Takers, Not Makers - WSJ.com

[Malloric]

Originally Posted by leonard

Now there is a thought.

Social Security is paid or by all workers who can later draw from it. Public pensions, like private ones, should be paid for ONLY by those who will draw from it, the public employees.

My mom and dad both worked for Sutter. Both had private pensions they did not contribute to as well as 403(b) retirement plans that both they and Sutter contributed to. Defined benefit pensions are pretty rare in the private sector but still exist, especially in health care. So... I agree, public pensions should be like private pensions. It's a contract between employee and employer. The generous pension was the main reason my mom took the county job two years ago. The benefits and not commuting two hours a day made up for the $20/hour cut in pay for her. It's not something I would have done. I don't trust the state to honor its contractual obligations. I'll take the higher cash in hand payment. Most of the counties pay $50-60 an hour for per diem. It's not great money (it's gross, I net about 2/3rd and no benefits at all) I can make twice that private sector on lucrative jobs, but the work isn't steady. As the government lays off people, I'm getting more and more contract work. If I could land a "full-time" per diem position somewhere I liked, I'd probably take it. A lot of people would not. The total pay isn't as good (no four weeks' paid vacation, no health insurance) as a state employee would get or competitive for people with established clients in the private sector.

[Phil306]

Originally Posted by leonard

Now there is a thought.

Social Security is paid or by all workers who can later draw from it. Public pensions, like private ones, should be paid for ONLY by those who will draw from it, the public employees.

Well intentioned point. However, what do you do with people who far surpass what they put into social security, then they take out? Cut them off?

Not too mention, the simple fact of social security is it was never intended to be a "retirement system." It was intended to supplement the pension system, ALL persons received after working for said company for 30 years. Private and public. However, private companies decided to cancel pension programs, BECAUSE of social security. They could reduce costs, make shareholders money, etc and why? Jane/John Doe have social security. There is no reason for them to pay these persons, after they retire.

There are millions of people who are receiving far more in benefits, then they paid in. MILLIONS. Some people are collecting from social security, who never paid a dime into the system. Yet, no one want to do anything about that.