MSNBC's "Truth about Detroit's Pension Problems" distorts, tells half-truths, ignores facts, and demonizes! (salary, death)

[michiganmoon]

The truth about Detroit's pension woes | MSNBC

MSNBC is a joke of a news source (as are many other on the right and left).

In their discussing of the "Truth" about Detroit Pension problems nowhere do they mention the following facts:

(1) The pension was run by a majority of Union leaders

(2) The pension gave out 13th month bonus checks in good and bad years when the math of the program did NOT call for this in the plan.

(3) The Pension had hit rock bottom a decade ago and was bailed out with $1.4 Billion in city bonds in 2004, the Union leadership responded to this serious crisis by continuing 13th month bonus checks that were not called for in the plan or accounted for in the math.

(4) The Pension hit rock bottom again in 2014 and the union leadership wanted to continue on the same path with another bailout.

(5) The Pension has a supplemental plan where if employees put their own money in it is guaranteed a minimum rate of return of 7.9% no matter what.

(6) The Pension plan had nearly a 1.5% management fee, some of which went to the Union.

(7) MSNBC calls attention to the fact that the Detroit City Pension average is just $19,000 a year. This is a distorted number for 3 reasons.
-A) While ignoring that you can earn a pension after just 5 to 10 years of service (depending on situation) and many people on a Detroit City Pension work this bare minimum to secure the modest pension for life and then quit, moving on to something else with this bonus income. In fact most pensioners start collecting in their 30s and 40s now as they move on to other careers presumably.
-B) This number is also skewed by a growing number of pensioners who get placed on a separate disability program, which lowers their pension, but gives them additional money from a separate fund.
-C) This number ignores public safety pensions, which are higher and it doesn't include the lifetime health insurance benefits.

(8) The public union workers keep in power the union leaders and ultimately those who run this pension into the ground.

(9) Detroit has 54 people under the age of 20, 19 or younger, already collecting pensions -- for life. These teenage pensioners currently average a pension of $23,300 a year and will get increases for cost of living for life. When asked if this was accurate, Detroit responded that their records may be sloppy. The following year, Detroit clarified it to just 20 teenagers collecting pensions averaging $27,000 a year.

(10) Excluding the $1.4 Billion bailout that the pension got in 2004, the pension system has received tens of millions of dollars from state and federal grants to prop up the pension program.

Review & Outlook: Saving Detroit From Itself - WSJ

Detroit's Bankruptcy Retreat - WSJ

MSNBC ignores all of these pertinent facts, but they found time to demonize the Koch Brothers over the Detroit Pensions for pushing evil pension reforms!

[ntwrkguy1]

There's NO WAY that MSNBC lies --- after all, that's where Brian Williams works now, and he is a paragon of virtue.

Oh, wait......

[workingclasshero]

Originally Posted by michiganmoon;40100382............ cut to save space
(9) Detroit has 54 people under the age of 20, 19 or younger, already collecting pensions -- for life. [B

These teenage pensioners currently average a pension of $23,300 a year[/b] and will get increases for cost of living for life. When asked if this was accurate, Detroit responded that their records may be sloppy. The following year, Detroit clarified it to just 20 teenagers collecting pensions averaging $27,000 a year.

this is the one I find real interesting

somehow...20 or 54 TEENAGERS are getting 23k-27k per year for the rest of their life...... meanwhile they can also start their own career(s) and end up with 1 or 2 MORE pensions


how does a teenager get a pension...... is it a death benefit, or something like that ???

[Delahanty]

I would have liked to see this program. Maybe they'll air it again.

I'm tring to imagine any scenario in which a teenager would be collecting a pension.

[Goinback2011]

Originally Posted by Delahanty

I would have liked to see this program. Maybe they'll air it again.

I'm tring to imagine any scenario in which a teenager would be collecting a pension.

Detroit is Greece.

[nicet4]

Originally Posted by Goinback2011

Detroit is Greece.

But they do have a union horse shoer (ferrier sp?) employed whose job it is to put shoes on the feet of horses.

Union power!

[ntwrkguy1]

Originally Posted by nicet4

But they do have a union horse shoer (ferrier sp?) employed whose job it is to put shoes on the feet of horses.

Union power!

Farrier, actually.

While I don't believe there are any horses still in the city of Detroit, there is an abundance of jackasses, so perhaps that's the reason the union farrier is still around.

[tom1944]

Can anyone provide details of the funding formula and the benefit calculation for the Detroit pension so we can have a factual discussion on if the benefits are overly generous.

For example lets say the pension is funded with the employee contributing 7.5% of their salary and the employer contributing 4.1% of each employees salary. Say the benefit calculation is 1/60 or 1/65 times the last 5 years average salary not including overtime, bonus or any extra pay. Also include the retirement age and any penalty for retiring prior to that. With those data points we can have a real discussion.

[Goinback2011]

Originally Posted by tom1944

Can anyone provide details of the funding formula and the benefit calculation for the Detroit pension so we can have a factual discussion on if the benefits are overly generous.

For example lets say the pension is funded with the employee contributing 7.5% of their salary and the employer contributing 4.1% of each employees salary. Say the benefit calculation is 1/60 or 1/65 times the last 5 years average salary not including overtime, bonus or any extra pay. Also include the retirement age and any penalty for retiring prior to that. With those data points we can have a real discussion.

If the tax base doesn't support the benefits, the pension fund is operating at a loss. You need that figure too.

[michiganmoon]

Originally Posted by tom1944

Can anyone provide details of the funding formula and the benefit calculation for the Detroit pension so we can have a factual discussion on if the benefits are overly generous.

For example lets say the pension is funded with the employee contributing 7.5% of their salary and the employer contributing 4.1% of each employees salary. Say the benefit calculation is 1/60 or 1/65 times the last 5 years average salary not including overtime, bonus or any extra pay. Also include the retirement age and any penalty for retiring prior to that. With those data points we can have a real discussion.

As of a few years ago public safety officers in Detroit didn't have to contribute a single penny to their pension to get 85% of their salary if they retired by at age 55 and free health insurance for life and for their spouse.

However, your point about how much they contribute or don't is moot. If the city compensates the workers what they can and if they made the workers pay into the system - they would be able to pay them more. So the net effect in the end is negligible.

The real facts of concern is that-
#1 The managers of the pension are corrupt and/or incompetent and stay in power by handing out freebies.
#2 The math doesn't work, especially with the optional supplemental plan. Not enough money goes in to support the money going out plus management fees.
#3 The plan was bailed out a decade ago and the managers continued to mismanage with uncalled for bonus month checks in good and bad years.