This sucks! Pension costs for Fire and Police Soaring, Paralyzing Phoenix Budget

[wase4711]

All I can say is the nightmare state of Illinois that I am stuck in for another few months, wrote the book on what large pensions, that don't get funded properly from the get go can do to a state's economy..hopefully, AZ doesnt go down that dark, dreary path..

Illinois' unfunded pension liabilities reach $130 billion: study | Reuters

[JewelChick01]

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?

Burkmere didn't misunderstand. Whoever posted what Burkmere responded to completely misspoke.

This is what was stated:

"The employee chips in 1/3 of his salary and the employer matches it through their working career. So for a public employee who would gross 100k/year, but actually sees 67k/year gross, 33k/year is going into the pension fund from them, and 33k from the employer."

When you "chip in," you're taking money from your pocket and putting it into a larger pot that other people are contributing to. That's the definition of "chipping in." The next statement says "33k/year is going into the pension fund from them," the "from them" part is, once again, saying that the employee is giving a portion of their salary to the fund.

I thought the same thing as Burkmere, and wondered how that could possibly be true. But anyone reading that statement would make the exact same conclusion. Now, if the explanation as quoted above is actually how it works -- that an employee foregoes about a third of what they could be making in the private sector in order to take a public service position with a guaranteed pension -- then that makes sense. That's how it should have been explained to begin with.

Sorry to sound picky, but that's not what this is -- I'm a writer, and it bothers me that no one seems to value clarity anymore. But it's actually important, because when you're not clear, people can't understand you!

To contribute to a fund and to forego a percentage of your market worth are two very different things.

[FirebirdCamaro1220]

Originally Posted by JewelChick01

Burkmere didn't misunderstand. Whoever posted what Burkmere responded to completely misspoke.

This is what was stated:

"The employee chips in 1/3 of his salary and the employer matches it through their working career. So for a public employee who would gross 100k/year, but actually sees 67k/year gross, 33k/year is going into the pension fund from them, and 33k from the employer."

When you "chip in," you're taking money from your pocket and putting it into a larger pot that other people are contributing to. That's the definition of "chipping in." The next statement says "33k/year is going into the pension fund from them," the "from them" part is, once again, saying that the employee is giving a portion of their salary to the fund.

I thought the same thing as Burkmere, and wondered how that could possibly be true. But anyone reading that statement would make the exact same conclusion. Now, if the explanation as quoted above is actually how it works -- that an employee foregoes about a third of what they could be making in the private sector in order to take a public service position with a guaranteed pension -- then that makes sense. That's how it should have been explained to begin with.

Sorry to sound picky, but that's not what this is -- I'm a writer, and it bothers me that no one seems to value clarity anymore. But it's actually important, because when you're not clear, people can't understand you!

To contribute to a fund and to forego a percentage of your market worth are two very different things.

The bolded section was the point

[Java Jolt]

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.

This is just too sensible.

Public service employees, specifically police officers and firefighters not only serve the public good but they take on dangerous tasks that the average person would be unqualified, unfit, or unmotivated to do.

[Zippyman]

Originally Posted by Burning Madolf

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.

Jobs in government like "dmv employee" don't pay spectacularly anyway, especially in AZ. And I'd argue those kinds of employees are the ones you really *want* competency in - we've undergone a couple decades of "right sizing" in government, and now we're left with any further cutting resulting in the loss of "bone". We've eliminated all the easy-to-cut positions, and we're now left with functions that can't be outsourced or done any cheaper - they're functions that *need* to be performed, and the government won't be able to function at all if that stuff isn't done, and done efficiently.

The dmv might be the classic example, but another that's near & dear to my own heart is fingerprint & background checks. Voters in AZ have a fetish for fingerprinting professionals in our state, and processing times for fingerprinting can vary widely based on time of year. Even though I had already been fingerprinted in December, when I got my nursing degree in May, I had to submit another set of fingerprints - prints & background check took 90 days. That's 3 months of being qualified & able to work, but not legally able to work. Then I got a job offer from the state.. Requires another background check - there are only a couple of investigators & accepting that job means *another* 3 months of sitting on your hands & waiting for the understaffed agency to chug through the paperwork. For a job that pays $6 hr less than the private sector. The benefits are good, but not that good. The combination of low pay and awful working conditions for correctional officers is so bad that 30% of the people they hire quit every year.. Which means they need to run more background checks on new employees.. Which means background checks take longer. See the cycle?

Just one, teeny-tiny function of government (checking backgrounds & issuing professional licenses) - affects tens of thousands of professionals in our state (doctors, real-estate agents, nurses & nurse's aides, jail guards, school teachers, mortgage brokers, etc), and none of them can work (or pay taxes) until they get that permission-slip from the government. Eliminating ten "paper pushers" means that several thousand newly-minted private-sector professionals get to sit on their hands for months on end every year. Did the government really "save" anything by "right sizing" itself in that area? , or did it cut off just as much tax revenue by becoming a hindrance to employment? I'm sure there are lots of examples like that throughout both local and state government, that's just one that has affected me personally.

[Burning Madolf]

Originally Posted by Zippyman

Jobs in government like "dmv employee" don't pay spectacularly anyway, especially in AZ. And I'd argue those kinds of employees are the ones you really *want* competency in - we've undergone a couple decades of "right sizing" in government, and now we're left with any further cutting resulting in the loss of "bone". We've eliminated all the easy-to-cut positions, and we're now left with functions that can't be outsourced or done any cheaper - they're functions that *need* to be performed, and the government won't be able to function at all if that stuff isn't done, and done efficiently.

The dmv might be the classic example, but another that's near & dear to my own heart is fingerprint & background checks. Voters in AZ have a fetish for fingerprinting professionals in our state, and processing times for fingerprinting can vary widely based on time of year. Even though I had already been fingerprinted in December, when I got my nursing degree in May, I had to submit another set of fingerprints - prints & background check took 90 days. That's 3 months of being qualified & able to work, but not legally able to work. Then I got a job offer from the state.. Requires another background check - there are only a couple of investigators & accepting that job means *another* 3 months of sitting on your hands & waiting for the understaffed agency to chug through the paperwork. For a job that pays $6 hr less than the private sector. The benefits are good, but not that good. The combination of low pay and awful working conditions for correctional officers is so bad that 30% of the people they hire quit every year.. Which means they need to run more background checks on new employees.. Which means background checks take longer. See the cycle?

Just one, teeny-tiny function of government (checking backgrounds & issuing professional licenses) - affects tens of thousands of professionals in our state (doctors, real-estate agents, nurses & nurse's aides, jail guards, school teachers, mortgage brokers, etc), and none of them can work (or pay taxes) until they get that permission-slip from the government. Eliminating ten "paper pushers" means that several thousand newly-minted private-sector professionals get to sit on their hands for months on end every year. Did the government really "save" anything by "right sizing" itself in that area? , or did it cut off just as much tax revenue by becoming a hindrance to employment? I'm sure there are lots of examples like that throughout both local and state government, that's just one that has affected me personally.

I was responding to another post using the "IT pro" example that people love to use. The DMV example is just a recognizable counter. It would be more appropriate to pick on the many overlapping bureaucrats in government like Asst. and Deputy City Managers and similar redundant heads of city departments. Always too many chefs and not enough servers in government at every level.

Back to the police and fire folks and their pensions, the reason this mess exists is a good thing gone amuck. Providing good pensions for safety folks is great, lacking the political b***s to fund properly or allow abuse is what created the monster. Spiking and DROP caused enormous damage and as usual someone down the road is left holding the bag. Changes were made but damage was done.

Here's a quote from an old article on the problem:

"Ten retirees significantly increased their lump-sum retirement benefits to more than $700,000 through the Deferred Retirement Option Plan. All also receive annual pensions greater than $114,000 a year."

Legality of boosting Phoenix pensions in question