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2. I think most of us agree taht teachers deserve fair pay. However, we must also consider they do not work a full year, and get extended holidays. I also think most of agree that they should have a retirement, but why should the taxpayers provide a defined pension which is no longer sustainable; what's wrong with a 401K plan?
401k plans are a con-job designed by corporate America to screw the working man out of his hard-earned pension. The question the private sector should be asking itself isn't why are public employees getting these unfair benefits, but why aren't we in the private sector getting them any more. It isn't because companies can't afford it. GDP and productivity have increased substantially over the past few decades while private sector wages, and in the past ten years, employment have stagnated and even fell.
At the same time the share of total wealth held by the top 1% has increased exponentially, even more so for the top .01%. That's what's unsustainable and leads to real problems like civil unrest.
At any rate, lots of places including NC have 401k plans as part of the state and local employee benefits package, and they've taken a real dive in the past couple years. If someone took their retirement funds and blew it in Vegas we'd say they're insane or an idiot or both, but if they package it with a fancy name and blow it on Wall St. we call that sound fiscal planning. Why is forcing workers of any stripe to gamble away their earnings considered a good idea?
401k plans are a con-job designed by corporate America to screw the working man out of his hard-earned pension. The question the private sector should be asking itself isn't why are public employees getting these unfair benefits, but why aren't we in the private sector getting them any more. It isn't because companies can't afford it. GDP and productivity have increased substantially over the past few decades while private sector wages, and in the past ten years, employment have stagnated and even fell.
At the same time the share of total wealth held by the top 1% has increased exponentially, even more so for the top .01%. That's what's unsustainable and leads to real problems like civil unrest.
At any rate, lots of places including NC have 401k plans as part of the state and local employee benefits package, and they've taken a real dive in the past couple years. If someone took their retirement funds and blew it in Vegas we'd say they're insane or an idiot or both, but if they package it with a fancy name and blow it on Wall St. we call that sound fiscal planning. Why is forcing workers of any stripe to gamble away their earnings considered a good idea?
"Governments should offer a 401K like most other employeers; it's that simple"
Or, they could have a pension that is properly funded with reasonable payouts, like NC and not contribute to shifting the burden of supporting the elderly to the next generation. All 401ks are doing is shifting the responsibility from employers to tax payers. These people aren't going to have enough money to get by.
When section 401(k) was added to the tax law, it was never intended to replace pensions or be used by the average worker. It was meant to allow companies to supplement the retirement packages for executives.
"Governments should offer a 401K like most other employeers; it's that simple"
Or, they could have a pension that is properly funded with reasonable payouts, like NC and not contribute to shifting the burden of supporting the elderly to the next generation. All 401ks are doing is shifting the responsibility from employers to tax payers. These people aren't going to have enough money to get by.
When section 401(k) was added to the tax law, it was never intended to replace pensions or be used by the average worker. It was meant to allow companies to supplement the retirement packages for executives.
Properly funding a pension menas tax payers have to fund it. NC has lower taxes than NJ, but the residents are funding a pension, and in the majority of cases they only have a 401K. So, what makes public employees believe that they should be so select to have a tax payer funded pension.
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Originally Posted by marc515
Properly funding a pension menas tax payers have to fund it. NC has lower taxes than NJ, but the residents are funding a pension, and in the majority of cases they only have a 401K. So, what makes public employees believe that they should be so select to have a tax payer funded pension.
Look, The NJ pensions were supposed to be jointly funded by the employee & the employer (the state). Initially the teacher pensions were funded by the employee & the district but the state took them over. Then the state took over the county courts & got their grubby paws on those pensions. The pension money has been deducted from those employees in every paycheck. The state has failed to make their payments, inspite of it being a contractual obligation since Christy Whitman. The problem is Christie Whitman's tax cut.
If Whitman had not gotten the law changed there would be no problem with the NJ pension.
Properly funding a pension menas tax payers have to fund it. NC has lower taxes than NJ, but the residents are funding a pension, and in the majority of cases they only have a 401K. So, what makes public employees believe that they should be so select to have a tax payer funded pension.
Pensions come directly out of employee pay; it's a form of deferred compensation. If they weren't getting the pension they'd get that same amount of money minus accrued interest the pension fund gains over the years in their paycheck. It's actually in the general economy's interest to have large pension funds as they build interest over time. And not get raided by corrupt politicians to pay for asinine tax cuts.
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Originally Posted by box_of_zip_disks
Pensions come directly out of employee pay; it's a form of deferred compensation. If they weren't getting the pension they'd get that same amount of money minus accrued interest the pension fund gains over the years in their paycheck. It's actually in the general economy's interest to have large pension funds as they build interest over time. And not get raided by corrupt politicians to pay for asinine tax cuts.
Pensions come directly out of employee pay; it's a form of deferred compensation. If they weren't getting the pension they'd get that same amount of money minus accrued interest the pension fund gains over the years in their paycheck. It's actually in the general economy's interest to have large pension funds as they build interest over time. And not get raided by corrupt politicians to pay for asinine tax cuts.
Someone would have to do the math and show us how it's in the best interest to have a pension fund vs a 401K. Will the pension actually grow enough to fund the pensions?
To help the current underfunded situation states need to increase employee contributions. Arizona just increased employee contributions to 10.5 percent from 9.6 percent.
I'm sure most of the general public who only have contributory 401K pension plans, are begining to wonder why public employees need a defined pension plan.
It's only a matter of time before all public employees have a 401K plan.
"I'm sure most of the general public who only have contributory 401K pension plans, are begining to wonder why public employees need a defined pension plan."
Sounds like jealousy to me. But some of you want to cut your nose off to spite your face. The real reason a lot of private companies are phasing out pensions is because they were irresponsible and didn't fund them. They are not victims, they are opportunists. The difference is, NC's pension is properly funded. What I am hearing is that people want to use other pensions failings as an excuse to stop properly funding the pension.
You have to look at employee compensation as a whole. If you replace the pension with a 401k, you would either need to increase pay or contribute more to the 401k than they do to the pension (in many years, nothing). The pension reduces turnover, which helps to hold salaries down. State government is already on the bring of losing its best people over excessive family healthcare premiums.
I am a young, skilled state employee (M.S. Computer Engineering, 10 years of experience) who is preparing to start a family. I'm not going to be sticking around if I have to pay $580/month to provide healthcare to my family. In my job searches so far, I'm seeing premiums under $200 in private industry. The only thing that gives me pause is the prospect of losing my years of service in the pension. It would suit me fine to convert my pension to a 401k, but it isn't in the taxpayers interests. When I leave, you will have to pay a higher salary to replace me. Years of lackluster pay raises has my salary well below market rate.
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Originally Posted by marc515
Someone would have to do the math and show us how it's in the best interest to have a pension fund vs a 401K. Will the pension actually grow enough to fund the pensions?
To help the current underfunded situation states need to increase employee contributions. Arizona just increased employee contributions to 10.5 percent from 9.6 percent.
I'm sure most of the general public who only have contributory 401K pension plans, are begining to wonder why public employees need a defined pension plan.
It's only a matter of time before all public employees have a 401K plan.
Why? The NJ employees met their contractual obligation. Their contributions were deducted from every paycheck. The state did not meet its obligations, plain & simple. Want to get the missing payments plus interest? So sue Christie Whitman.
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