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On May 23 2014 11:18 CursOr wrote:Show nested quote +On May 23 2014 05:57 JonnyBNoHo wrote:COLAs on a diet PUBLIC sector pensions in America are being cut, but in a subtle way. The latest report from the Center for Retirement Research (what would we do without it?) at Boston College shows that many states have managed to cut the cost of living adjustment, or COLA as it is known. Whole article: + Show Spoiler +A lack of inflation linking savaged the benefits of British pensioners, particularly in the 1970s. Even at 4% inflation, prices will double within 18 years, within the life expectancy of males and females retiring at 65. In other words, living standards will halve in such a scenario.
Most national govenment pensions (including the US's Social Security) try to offer inflation-linking to offset this risk. But around 25-30% of state and local government workers are not covered by the Social Security system, so the loss of this benefit could lead to substantial hardship, particularly in later years.
The problem for states and local governments is that defined benefit (final salary) pensions are easy to promise but expensive to deliver and the full bill takes decades to come due. A combination of buoyant equity markets and generous accoutnig assumptions made the promise seem fairly cheap in the 1980s and 1990s. And offering better benefits was a way of rewarding workers without pushing up the immediate pay bill (a move that might require higher taxes).
Cutting pensions is hard work. Many states have switched new employees to defined contribution plans, where the cost is strictly limited (there is no pension promise, and thus no shortfall to make up). But that does nothing to cut the cost of promises that have already been made. And courts have tended to rule that the benefits of existing employees are protected under contract law and thus cannot be reduced; join the workforce at 18 and the promise made by the employer must still be enforced at age 90.
One might think that such legal protection might apply to COLAs, but it seems not. The CRR says that of the 17 states that have reduced COLAs, 12 have been challenged in court. The courts have ruled in nine cases and have upheld cuts in all but one case. The CRR writes that
The main rationale for allowing the COLA cut is that COLAs are not considered to be a contractual right. For example, in Colorado, where the decision is currently under appeal, the judge found that the plaintiffs had no vested contract right to a specific COLA amount for life and that the plaintiffs could have no reasonable expectation of a specific COLA amount for life given that the General Assembly has changed the COLA formula numerous times over the past 40 years
Some changes in the COLA were surely overdue. Eight states had COLAs that were fixed at 2.5-3.5% a year regardless of the rate of inflation; in low inflation years, such as this one, that means a real increase in pension entitlement. Three of the states linked future COLA increases to the CPI, a perfectly sensible reform. Other states have COLAs linked to the CPI but with a cap; some have reduced the cap. At current low inflation rates, that won't hurt pensioners much (although, by the same token, it won't help the funding status of the plan much).
Some states have eliminated the COLA for a set period or for the forseeable future. These include New Jersey where a committee will be formed to determine whether the COLA can be brought back if the plan becomes 80% funded. As the CRR drily remarks
Since the state has allowed funding to decline since the legislation, the prospect of 80% funding is very unlikely
Cutting the COLA out completely can help a lot. The CRR estimates that eliminating a 2% COLA reduces lifetime benefits by 15-17%. And states probably need cuts of this magnitude. It takes a while for the figures in state pension plans to get updated (and the accounting is all wrong as mentioned before). But one can get an idea of the funding pressures from the private sector. After a good year in 2013, a lot of ground has been lost, largely because bond yields have fallen. According to Mercer, the pension plans of S&P 1500 companies have risen from $103 billion to $360 billion so far this year, leaving a funding ratio of 84%.
But is this the fairest way of cutting pension costs? The main worry is about people on low incomes, particularly those in state plans without social security. Better to have people retire later and to move to career average benefits, particuarly as final salary benefits mean that a few employees get huge and very costly retirement incomes (see the 12,200 Californians with six-figure pensions). But such approaches may not be legally possible; COLA cuts are the only weapon states can use. Also, a link to the referenced report. This is awesome ... so in 20 years a public employee that makes a lavish $22.00 an hour will probably have minimum wage catch up with him. They don't really do any work anyways.
COLAs for retirement benefits and current salaries are separate.
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On May 23 2014 11:28 JonnyBNoHo wrote:Show nested quote +On May 23 2014 11:18 CursOr wrote:On May 23 2014 05:57 JonnyBNoHo wrote:COLAs on a diet PUBLIC sector pensions in America are being cut, but in a subtle way. The latest report from the Center for Retirement Research (what would we do without it?) at Boston College shows that many states have managed to cut the cost of living adjustment, or COLA as it is known. Whole article: + Show Spoiler +A lack of inflation linking savaged the benefits of British pensioners, particularly in the 1970s. Even at 4% inflation, prices will double within 18 years, within the life expectancy of males and females retiring at 65. In other words, living standards will halve in such a scenario.
Most national govenment pensions (including the US's Social Security) try to offer inflation-linking to offset this risk. But around 25-30% of state and local government workers are not covered by the Social Security system, so the loss of this benefit could lead to substantial hardship, particularly in later years.
The problem for states and local governments is that defined benefit (final salary) pensions are easy to promise but expensive to deliver and the full bill takes decades to come due. A combination of buoyant equity markets and generous accoutnig assumptions made the promise seem fairly cheap in the 1980s and 1990s. And offering better benefits was a way of rewarding workers without pushing up the immediate pay bill (a move that might require higher taxes).
Cutting pensions is hard work. Many states have switched new employees to defined contribution plans, where the cost is strictly limited (there is no pension promise, and thus no shortfall to make up). But that does nothing to cut the cost of promises that have already been made. And courts have tended to rule that the benefits of existing employees are protected under contract law and thus cannot be reduced; join the workforce at 18 and the promise made by the employer must still be enforced at age 90.
One might think that such legal protection might apply to COLAs, but it seems not. The CRR says that of the 17 states that have reduced COLAs, 12 have been challenged in court. The courts have ruled in nine cases and have upheld cuts in all but one case. The CRR writes that
The main rationale for allowing the COLA cut is that COLAs are not considered to be a contractual right. For example, in Colorado, where the decision is currently under appeal, the judge found that the plaintiffs had no vested contract right to a specific COLA amount for life and that the plaintiffs could have no reasonable expectation of a specific COLA amount for life given that the General Assembly has changed the COLA formula numerous times over the past 40 years
Some changes in the COLA were surely overdue. Eight states had COLAs that were fixed at 2.5-3.5% a year regardless of the rate of inflation; in low inflation years, such as this one, that means a real increase in pension entitlement. Three of the states linked future COLA increases to the CPI, a perfectly sensible reform. Other states have COLAs linked to the CPI but with a cap; some have reduced the cap. At current low inflation rates, that won't hurt pensioners much (although, by the same token, it won't help the funding status of the plan much).
Some states have eliminated the COLA for a set period or for the forseeable future. These include New Jersey where a committee will be formed to determine whether the COLA can be brought back if the plan becomes 80% funded. As the CRR drily remarks
Since the state has allowed funding to decline since the legislation, the prospect of 80% funding is very unlikely
Cutting the COLA out completely can help a lot. The CRR estimates that eliminating a 2% COLA reduces lifetime benefits by 15-17%. And states probably need cuts of this magnitude. It takes a while for the figures in state pension plans to get updated (and the accounting is all wrong as mentioned before). But one can get an idea of the funding pressures from the private sector. After a good year in 2013, a lot of ground has been lost, largely because bond yields have fallen. According to Mercer, the pension plans of S&P 1500 companies have risen from $103 billion to $360 billion so far this year, leaving a funding ratio of 84%.
But is this the fairest way of cutting pension costs? The main worry is about people on low incomes, particularly those in state plans without social security. Better to have people retire later and to move to career average benefits, particuarly as final salary benefits mean that a few employees get huge and very costly retirement incomes (see the 12,200 Californians with six-figure pensions). But such approaches may not be legally possible; COLA cuts are the only weapon states can use. Also, a link to the referenced report. This is awesome ... so in 20 years a public employee that makes a lavish $22.00 an hour will probably have minimum wage catch up with him. They don't really do any work anyways. COLAs for retirement benefits and current salaries are separate.
From that report linked there it says this (pg2):
"Changes to COLAs, 2010-2013
Between 2010 and 2013, 17 states (with a total of 30
plans) enacted legislation that reduced, suspended, or
eliminated COLAs for current workers and often for
current retirees (see Figure 2)."
Note how current workers is ubiquitous, but "often" for current retirees. This will help stop the bleeding by the wages constantly being adjusted to the CPI... I can testify that the great liberal state of California is doing the same in many sectors.
...many government workers in CA have not had a cola adjustment since the 2008 dip. Though, its understandable because some adjustment is certainly needed.
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On May 23 2014 11:36 CursOr wrote:Show nested quote +On May 23 2014 11:28 JonnyBNoHo wrote:On May 23 2014 11:18 CursOr wrote:On May 23 2014 05:57 JonnyBNoHo wrote:COLAs on a diet PUBLIC sector pensions in America are being cut, but in a subtle way. The latest report from the Center for Retirement Research (what would we do without it?) at Boston College shows that many states have managed to cut the cost of living adjustment, or COLA as it is known. Whole article: + Show Spoiler +A lack of inflation linking savaged the benefits of British pensioners, particularly in the 1970s. Even at 4% inflation, prices will double within 18 years, within the life expectancy of males and females retiring at 65. In other words, living standards will halve in such a scenario.
Most national govenment pensions (including the US's Social Security) try to offer inflation-linking to offset this risk. But around 25-30% of state and local government workers are not covered by the Social Security system, so the loss of this benefit could lead to substantial hardship, particularly in later years.
The problem for states and local governments is that defined benefit (final salary) pensions are easy to promise but expensive to deliver and the full bill takes decades to come due. A combination of buoyant equity markets and generous accoutnig assumptions made the promise seem fairly cheap in the 1980s and 1990s. And offering better benefits was a way of rewarding workers without pushing up the immediate pay bill (a move that might require higher taxes).
Cutting pensions is hard work. Many states have switched new employees to defined contribution plans, where the cost is strictly limited (there is no pension promise, and thus no shortfall to make up). But that does nothing to cut the cost of promises that have already been made. And courts have tended to rule that the benefits of existing employees are protected under contract law and thus cannot be reduced; join the workforce at 18 and the promise made by the employer must still be enforced at age 90.
One might think that such legal protection might apply to COLAs, but it seems not. The CRR says that of the 17 states that have reduced COLAs, 12 have been challenged in court. The courts have ruled in nine cases and have upheld cuts in all but one case. The CRR writes that
The main rationale for allowing the COLA cut is that COLAs are not considered to be a contractual right. For example, in Colorado, where the decision is currently under appeal, the judge found that the plaintiffs had no vested contract right to a specific COLA amount for life and that the plaintiffs could have no reasonable expectation of a specific COLA amount for life given that the General Assembly has changed the COLA formula numerous times over the past 40 years
Some changes in the COLA were surely overdue. Eight states had COLAs that were fixed at 2.5-3.5% a year regardless of the rate of inflation; in low inflation years, such as this one, that means a real increase in pension entitlement. Three of the states linked future COLA increases to the CPI, a perfectly sensible reform. Other states have COLAs linked to the CPI but with a cap; some have reduced the cap. At current low inflation rates, that won't hurt pensioners much (although, by the same token, it won't help the funding status of the plan much).
Some states have eliminated the COLA for a set period or for the forseeable future. These include New Jersey where a committee will be formed to determine whether the COLA can be brought back if the plan becomes 80% funded. As the CRR drily remarks
Since the state has allowed funding to decline since the legislation, the prospect of 80% funding is very unlikely
Cutting the COLA out completely can help a lot. The CRR estimates that eliminating a 2% COLA reduces lifetime benefits by 15-17%. And states probably need cuts of this magnitude. It takes a while for the figures in state pension plans to get updated (and the accounting is all wrong as mentioned before). But one can get an idea of the funding pressures from the private sector. After a good year in 2013, a lot of ground has been lost, largely because bond yields have fallen. According to Mercer, the pension plans of S&P 1500 companies have risen from $103 billion to $360 billion so far this year, leaving a funding ratio of 84%.
But is this the fairest way of cutting pension costs? The main worry is about people on low incomes, particularly those in state plans without social security. Better to have people retire later and to move to career average benefits, particuarly as final salary benefits mean that a few employees get huge and very costly retirement incomes (see the 12,200 Californians with six-figure pensions). But such approaches may not be legally possible; COLA cuts are the only weapon states can use. Also, a link to the referenced report. This is awesome ... so in 20 years a public employee that makes a lavish $22.00 an hour will probably have minimum wage catch up with him. They don't really do any work anyways. COLAs for retirement benefits and current salaries are separate. From that report linked there it says this (pg2): "Changes to COLAs, 2010-2013 Between 2010 and 2013, 17 states (with a total of 30 plans) enacted legislation that reduced, suspended, or eliminated COLAs for current workers and often for current retirees (see Figure 2)." Note how current workers is ubiquitous, but "often" for current retirees. This will help stop the bleeding by the wages constantly being adjusted to the CPI... I can testify that the great liberal state of California is doing the same in many sectors. ...many government workers in CA have not had a cola adjustment since the 2008 dip. Though, its understandable because some adjustment is certainly needed.
If I'm not mistaken they're referring to current worker's retirement plans.
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Sounds fair, why should retired people get raises when they haven't done anything? Me paying for the excellent service of people who retired 20 years ago isn't cool.
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On May 23 2014 12:10 Wolfstan wrote:
Sounds fair, why should retired people get raises when they haven't done anything? Me paying for the excellent service of people who retired 20 years ago isn't cool.
Because maybe we should show some solidarity towards the older people of our society because they've built up most of our wealth? Or do you want to spent your last 20 years of your life just 'scraping by'?
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On May 23 2014 11:41 JonnyBNoHo wrote:Show nested quote +On May 23 2014 11:36 CursOr wrote:On May 23 2014 11:28 JonnyBNoHo wrote:On May 23 2014 11:18 CursOr wrote:On May 23 2014 05:57 JonnyBNoHo wrote:COLAs on a diet PUBLIC sector pensions in America are being cut, but in a subtle way. The latest report from the Center for Retirement Research (what would we do without it?) at Boston College shows that many states have managed to cut the cost of living adjustment, or COLA as it is known. Whole article: + Show Spoiler +A lack of inflation linking savaged the benefits of British pensioners, particularly in the 1970s. Even at 4% inflation, prices will double within 18 years, within the life expectancy of males and females retiring at 65. In other words, living standards will halve in such a scenario.
Most national govenment pensions (including the US's Social Security) try to offer inflation-linking to offset this risk. But around 25-30% of state and local government workers are not covered by the Social Security system, so the loss of this benefit could lead to substantial hardship, particularly in later years.
The problem for states and local governments is that defined benefit (final salary) pensions are easy to promise but expensive to deliver and the full bill takes decades to come due. A combination of buoyant equity markets and generous accoutnig assumptions made the promise seem fairly cheap in the 1980s and 1990s. And offering better benefits was a way of rewarding workers without pushing up the immediate pay bill (a move that might require higher taxes).
Cutting pensions is hard work. Many states have switched new employees to defined contribution plans, where the cost is strictly limited (there is no pension promise, and thus no shortfall to make up). But that does nothing to cut the cost of promises that have already been made. And courts have tended to rule that the benefits of existing employees are protected under contract law and thus cannot be reduced; join the workforce at 18 and the promise made by the employer must still be enforced at age 90.
One might think that such legal protection might apply to COLAs, but it seems not. The CRR says that of the 17 states that have reduced COLAs, 12 have been challenged in court. The courts have ruled in nine cases and have upheld cuts in all but one case. The CRR writes that
The main rationale for allowing the COLA cut is that COLAs are not considered to be a contractual right. For example, in Colorado, where the decision is currently under appeal, the judge found that the plaintiffs had no vested contract right to a specific COLA amount for life and that the plaintiffs could have no reasonable expectation of a specific COLA amount for life given that the General Assembly has changed the COLA formula numerous times over the past 40 years
Some changes in the COLA were surely overdue. Eight states had COLAs that were fixed at 2.5-3.5% a year regardless of the rate of inflation; in low inflation years, such as this one, that means a real increase in pension entitlement. Three of the states linked future COLA increases to the CPI, a perfectly sensible reform. Other states have COLAs linked to the CPI but with a cap; some have reduced the cap. At current low inflation rates, that won't hurt pensioners much (although, by the same token, it won't help the funding status of the plan much).
Some states have eliminated the COLA for a set period or for the forseeable future. These include New Jersey where a committee will be formed to determine whether the COLA can be brought back if the plan becomes 80% funded. As the CRR drily remarks
Since the state has allowed funding to decline since the legislation, the prospect of 80% funding is very unlikely
Cutting the COLA out completely can help a lot. The CRR estimates that eliminating a 2% COLA reduces lifetime benefits by 15-17%. And states probably need cuts of this magnitude. It takes a while for the figures in state pension plans to get updated (and the accounting is all wrong as mentioned before). But one can get an idea of the funding pressures from the private sector. After a good year in 2013, a lot of ground has been lost, largely because bond yields have fallen. According to Mercer, the pension plans of S&P 1500 companies have risen from $103 billion to $360 billion so far this year, leaving a funding ratio of 84%.
But is this the fairest way of cutting pension costs? The main worry is about people on low incomes, particularly those in state plans without social security. Better to have people retire later and to move to career average benefits, particuarly as final salary benefits mean that a few employees get huge and very costly retirement incomes (see the 12,200 Californians with six-figure pensions). But such approaches may not be legally possible; COLA cuts are the only weapon states can use. Also, a link to the referenced report. This is awesome ... so in 20 years a public employee that makes a lavish $22.00 an hour will probably have minimum wage catch up with him. They don't really do any work anyways. COLAs for retirement benefits and current salaries are separate. From that report linked there it says this (pg2): "Changes to COLAs, 2010-2013 Between 2010 and 2013, 17 states (with a total of 30 plans) enacted legislation that reduced, suspended, or eliminated COLAs for current workers and often for current retirees (see Figure 2)." Note how current workers is ubiquitous, but "often" for current retirees. This will help stop the bleeding by the wages constantly being adjusted to the CPI... I can testify that the great liberal state of California is doing the same in many sectors. ...many government workers in CA have not had a cola adjustment since the 2008 dip. Though, its understandable because some adjustment is certainly needed. If I'm not mistaken they're referring to current worker's retirement plans.
Naw, the COLA for current employees means exactly that, right at the start of the article too ... it saves money for pension because people will end up retiring making less money. Your retirement is based off of time worked and amount made. This report is looking projections for cost "eliminating a 2-percent compounded COLA reduces lifetime benefits by 15-17
percent... Eliminating a 3-percent COLA on the same initial benefit reduces lifetime benefits by 22-25 percent."
Currently hired employees are not under the same contract in these states so they just are not guaranteed automatic pay increases based on CPI, or in some cases, a fixed amount per year (which is more questionable for sure, 2.5 or 3.5%) To be fair that is not to say that they are never going to increase pay, it just wouldn't happen automatically.
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On May 23 2014 12:10 Wolfstan wrote:
Sounds fair, why should retired people get raises when they haven't done anything? Me paying for the excellent service of people who retired 20 years ago isn't cool.
I agree with this, a retirement plan should be based on the fact that it's going to be a fixed income. Increasing existing retirement payouts should be the first thing cut for sure. Though, it would suck if your cost of groceries when you retired was $50 a week and was $150 a week by the time you were 80 but.. honestly, that is a problem everyone would have to deal with.
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On May 23 2014 12:20 CursOr wrote:Show nested quote +On May 23 2014 11:41 JonnyBNoHo wrote:On May 23 2014 11:36 CursOr wrote:On May 23 2014 11:28 JonnyBNoHo wrote:On May 23 2014 11:18 CursOr wrote:On May 23 2014 05:57 JonnyBNoHo wrote:COLAs on a diet PUBLIC sector pensions in America are being cut, but in a subtle way. The latest report from the Center for Retirement Research (what would we do without it?) at Boston College shows that many states have managed to cut the cost of living adjustment, or COLA as it is known. Whole article: + Show Spoiler +A lack of inflation linking savaged the benefits of British pensioners, particularly in the 1970s. Even at 4% inflation, prices will double within 18 years, within the life expectancy of males and females retiring at 65. In other words, living standards will halve in such a scenario.
Most national govenment pensions (including the US's Social Security) try to offer inflation-linking to offset this risk. But around 25-30% of state and local government workers are not covered by the Social Security system, so the loss of this benefit could lead to substantial hardship, particularly in later years.
The problem for states and local governments is that defined benefit (final salary) pensions are easy to promise but expensive to deliver and the full bill takes decades to come due. A combination of buoyant equity markets and generous accoutnig assumptions made the promise seem fairly cheap in the 1980s and 1990s. And offering better benefits was a way of rewarding workers without pushing up the immediate pay bill (a move that might require higher taxes).
Cutting pensions is hard work. Many states have switched new employees to defined contribution plans, where the cost is strictly limited (there is no pension promise, and thus no shortfall to make up). But that does nothing to cut the cost of promises that have already been made. And courts have tended to rule that the benefits of existing employees are protected under contract law and thus cannot be reduced; join the workforce at 18 and the promise made by the employer must still be enforced at age 90.
One might think that such legal protection might apply to COLAs, but it seems not. The CRR says that of the 17 states that have reduced COLAs, 12 have been challenged in court. The courts have ruled in nine cases and have upheld cuts in all but one case. The CRR writes that
The main rationale for allowing the COLA cut is that COLAs are not considered to be a contractual right. For example, in Colorado, where the decision is currently under appeal, the judge found that the plaintiffs had no vested contract right to a specific COLA amount for life and that the plaintiffs could have no reasonable expectation of a specific COLA amount for life given that the General Assembly has changed the COLA formula numerous times over the past 40 years
Some changes in the COLA were surely overdue. Eight states had COLAs that were fixed at 2.5-3.5% a year regardless of the rate of inflation; in low inflation years, such as this one, that means a real increase in pension entitlement. Three of the states linked future COLA increases to the CPI, a perfectly sensible reform. Other states have COLAs linked to the CPI but with a cap; some have reduced the cap. At current low inflation rates, that won't hurt pensioners much (although, by the same token, it won't help the funding status of the plan much).
Some states have eliminated the COLA for a set period or for the forseeable future. These include New Jersey where a committee will be formed to determine whether the COLA can be brought back if the plan becomes 80% funded. As the CRR drily remarks
Since the state has allowed funding to decline since the legislation, the prospect of 80% funding is very unlikely
Cutting the COLA out completely can help a lot. The CRR estimates that eliminating a 2% COLA reduces lifetime benefits by 15-17%. And states probably need cuts of this magnitude. It takes a while for the figures in state pension plans to get updated (and the accounting is all wrong as mentioned before). But one can get an idea of the funding pressures from the private sector. After a good year in 2013, a lot of ground has been lost, largely because bond yields have fallen. According to Mercer, the pension plans of S&P 1500 companies have risen from $103 billion to $360 billion so far this year, leaving a funding ratio of 84%.
But is this the fairest way of cutting pension costs? The main worry is about people on low incomes, particularly those in state plans without social security. Better to have people retire later and to move to career average benefits, particuarly as final salary benefits mean that a few employees get huge and very costly retirement incomes (see the 12,200 Californians with six-figure pensions). But such approaches may not be legally possible; COLA cuts are the only weapon states can use. Also, a link to the referenced report. This is awesome ... so in 20 years a public employee that makes a lavish $22.00 an hour will probably have minimum wage catch up with him. They don't really do any work anyways. COLAs for retirement benefits and current salaries are separate. From that report linked there it says this (pg2): "Changes to COLAs, 2010-2013 Between 2010 and 2013, 17 states (with a total of 30 plans) enacted legislation that reduced, suspended, or eliminated COLAs for current workers and often for current retirees (see Figure 2)." Note how current workers is ubiquitous, but "often" for current retirees. This will help stop the bleeding by the wages constantly being adjusted to the CPI... I can testify that the great liberal state of California is doing the same in many sectors. ...many government workers in CA have not had a cola adjustment since the 2008 dip. Though, its understandable because some adjustment is certainly needed. If I'm not mistaken they're referring to current worker's retirement plans. Naw, the COLA for current employees means exactly that, right at the start of the article too ... it saves money for pension because people will end up retiring making less money. Your retirement is based off of time worked and amount made. This report is looking projections for cost "eliminating a 2-percent compounded COLA reduces lifetime benefits by 15-17 percent... Eliminating a 3-percent COLA on the same initial benefit reduces lifetime benefits by 22-25 percent." Currently hired employees are not under the same contract in these states so they just are not guaranteed automatic pay increases based on CPI, or in some cases, a fixed amount per year (which is more questionable for sure, 2.5 or 3.5%) To be fair that is not to say that they are never going to increase pay, it just wouldn't happen automatically.
If you do the math, eliminating a 3% COLA on just the retirement benefits you get the 22-25% reduction in pension value.
Certainly states can and do change COLAs for wages / salaries, but that's a different issue than COLAs on pensions.
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On May 23 2014 11:11 JonnyBNoHo wrote:
We can't pretend that pensions aren't an issue. The need to be reasonable and they need to be funded. If they can't be funded than the public needs to decide what's going to change. We can't kidding ourselves that taxes won't go up, pensions will be fully funded and no programs will be cut. That fairy tale doesn't have a happy ending.
I'm glad we agree jonny. Taxes will have to go up.
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On May 23 2014 09:39 Nyxisto wrote:Show nested quote +On May 23 2014 09:22 Danglars wrote:
In California, the problem is public employee unions extracting lavish pensions with their political clout, and continuing demanding the same and more as the state sinks. $71 bil shortfall just for teachers, $100bil for the rest. Too few payments in for what they take out. So sometimes, it's just union bosses with politicians in their back pocket bankrupting the state. It's not always some little guy powerless against the mean rich people. Oh yes,public teachers! Widely known as the most vampiric group of today's society. Come out here, you'll be surprised. They used to have a sterling reputation, something lèse-majesté to criticize. Slowly but surely they earned their current reputation in the state.
On May 23 2014 09:51 IgnE wrote:
Oh right, "lavish pensions." Pensions bargained for under a contract-based system between two equal parties. It's really disgusting how you can come in here and say bullshit like that when everyone knows that if we were talking about other business contracts that involved far more "lavish" compensation you would defend to the death the right of the entity to collect its contracted due. Like Wall Street bonuses after 2008, for example. Perhaps a bunch of Schwarzenegger-approved tax cuts over the last decade were short-sighted? Perhaps the government of California needs to collect more in taxes?
Arguing that pensions, which thousands of people are relying on as the primary source of income into their old age, need to be cut is just galling. Contracts and negotiation are sacred when it comes to the rich and powerful, but lower taxes take precedence over well-earned pension plans for the middle class. Mendacity at its finest. One party has the power of demagoguery (but the Children!) and a massive war chest to any politician brave enough to challenge their primacy in negotiating. Just like Schwarzenegger's ballot measures that all went down in flames with massive union opposition, it isn't even close when you make the wrong enemy. He learned his lesson quick and went passive thereafter. CalPERS/CalSTRS is an unfunded albatross over the shoulders of the California taxpayer that is driving my state into bankruptcy. The time to reform them has long passed. Now, we get to reap the pain, and maybe just a couple liberals will discover just how compassionate it is when there's no more money left for the thousands depending on their pensions.
EDIT: Just some numbers to bring a sense of scale. If you were full time, and retired 4 years ago having worked 25-30 years, you can expect to receive $50,772 a year. That's the average according to CalSTRS's annual report. But let's say you put in 35-40 years of service. That'll put you over $86,000 a year retirement pay.
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I don't get your point. Someone nearly gamed the system to a mere 400k and this is your argument that pensions are out of control and unreasonable? One person almost, but not quite, got away with less than a million extra dollars total and therefore we should scrap the whole thing because it's clearly corrupt? Doesn't that mean the system is working, that she didn't get away with it?
Do you know how many people took home bonuses worth hundreds of times that on Wall St after the collapse?
http://www.motherjones.com/politics/2010/01/wall-street-bailout-executive-compensation
CLAIM TO FAME: Mr. Credit-Default Swap. In 2008, his unit cost AIG $99 billion. (AIG then paid $1.5 billion in bonuses and awards.)
QUOTE: Before the crash: "It is hard for us...to even see a scenario within any kind of realm of reason that would see us losing $1 in any of those transactions."
HIS BONUS, 2008: $34 million
HIS HAUL, 2000-2008: $280 million
CLAIM TO FAME: Ordered a $50 million private jet, announced huge layoffs, and jacked up credit card APRs—after getting bailed out
QUOTE: Told Congress last February, "My salary should be $1 per year with no bonus." Didn't mention that he took $1.6 million in stock options as Citi lost $18.7 billion in 2008.
HIS HAUL, 2008: $10.8 million
CLAIM TO FAME: As Clinton's treasury secretary, he pushed to overturn regulations prohibiting finance-bank hybrids such as...Citigroup. QUOTE: Wishes he could have reined in Citi but "I don't know what I could have done" as just a board member.
HIS HAUL, 1999-2009: $124 million
The list goes on. This idiotic characterization of the average pensioner as someone who nearly got away with an extra $400k is part of the mendacious narrative that corporations and business interests in these localities have spun in order to get you to cut pensions rather than increase their taxes . . . so that they can pay their executives outrageous sums of money. It's complete garbage.
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On May 23 2014 14:16 Danglars wrote:Show nested quote +On May 23 2014 09:39 Nyxisto wrote:On May 23 2014 09:22 Danglars wrote:
In California, the problem is public employee unions extracting lavish pensions with their political clout, and continuing demanding the same and more as the state sinks. $71 bil shortfall just for teachers, $100bil for the rest. Too few payments in for what they take out. So sometimes, it's just union bosses with politicians in their back pocket bankrupting the state. It's not always some little guy powerless against the mean rich people. Oh yes,public teachers! Widely known as the most vampiric group of today's society. Come out here, you'll be surprised. They used to have a sterling reputation, something lèse-majesté to criticize. Slowly but surely they earned their current reputation in the state. Show nested quote +On May 23 2014 09:51 IgnE wrote:
Oh right, "lavish pensions." Pensions bargained for under a contract-based system between two equal parties. It's really disgusting how you can come in here and say bullshit like that when everyone knows that if we were talking about other business contracts that involved far more "lavish" compensation you would defend to the death the right of the entity to collect its contracted due. Like Wall Street bonuses after 2008, for example. Perhaps a bunch of Schwarzenegger-approved tax cuts over the last decade were short-sighted? Perhaps the government of California needs to collect more in taxes?
Arguing that pensions, which thousands of people are relying on as the primary source of income into their old age, need to be cut is just galling. Contracts and negotiation are sacred when it comes to the rich and powerful, but lower taxes take precedence over well-earned pension plans for the middle class. Mendacity at its finest. One party has the power of demagoguery (but the Children!) and a massive war chest to any politician brave enough to challenge their primacy in negotiating. Just like Schwarzenegger's ballot measures that all went down in flames with massive union opposition, it isn't even close when you make the wrong enemy. He learned his lesson quick and went passive thereafter. CalPERS/CalSTRS is an unfunded albatross over the shoulders of the California taxpayer that is driving my state into bankruptcy. The time to reform them has long passed. Now, we get to reap the pain, and maybe just a couple liberals will discover just how compassionate it is when there's no more money left for the thousands depending on their pensions.
Or they could just raise the taxes and pay the people what they are owed.
You must be high or something. What is this alternate reality where capital bows down before the mighty power of unions?
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On May 23 2014 14:19 IgnE wrote:Show nested quote +On May 23 2014 14:16 Danglars wrote:On May 23 2014 09:39 Nyxisto wrote:On May 23 2014 09:22 Danglars wrote:
In California, the problem is public employee unions extracting lavish pensions with their political clout, and continuing demanding the same and more as the state sinks. $71 bil shortfall just for teachers, $100bil for the rest. Too few payments in for what they take out. So sometimes, it's just union bosses with politicians in their back pocket bankrupting the state. It's not always some little guy powerless against the mean rich people. Oh yes,public teachers! Widely known as the most vampiric group of today's society. Come out here, you'll be surprised. They used to have a sterling reputation, something lèse-majesté to criticize. Slowly but surely they earned their current reputation in the state. On May 23 2014 09:51 IgnE wrote:
Oh right, "lavish pensions." Pensions bargained for under a contract-based system between two equal parties. It's really disgusting how you can come in here and say bullshit like that when everyone knows that if we were talking about other business contracts that involved far more "lavish" compensation you would defend to the death the right of the entity to collect its contracted due. Like Wall Street bonuses after 2008, for example. Perhaps a bunch of Schwarzenegger-approved tax cuts over the last decade were short-sighted? Perhaps the government of California needs to collect more in taxes?
Arguing that pensions, which thousands of people are relying on as the primary source of income into their old age, need to be cut is just galling. Contracts and negotiation are sacred when it comes to the rich and powerful, but lower taxes take precedence over well-earned pension plans for the middle class. Mendacity at its finest. One party has the power of demagoguery (but the Children!) and a massive war chest to any politician brave enough to challenge their primacy in negotiating. Just like Schwarzenegger's ballot measures that all went down in flames with massive union opposition, it isn't even close when you make the wrong enemy. He learned his lesson quick and went passive thereafter. CalPERS/CalSTRS is an unfunded albatross over the shoulders of the California taxpayer that is driving my state into bankruptcy. The time to reform them has long passed. Now, we get to reap the pain, and maybe just a couple liberals will discover just how compassionate it is when there's no more money left for the thousands depending on their pensions. Or they could just raise the taxes and pay the people what they are owed. You must be high or something. What is this alternate reality where capital bows down before the mighty power of unions?
As if they couldn't just move to a right to work state if they don't like that the state they are in has unions. (That's what one would say to a wage earner about their job right?) Union influence is so ridiculously overblown.
Outside an individuals ability to put pressure on management to raise wages or benefits (usually pretty minimal) unions are the only thing giving individuals any real influence on wages and conditions.
Things were so much worse before unions, perhaps better if your a heartless capitalist, it just seems insane to me that people are so ardently against unions when they are essentially just labor corporations at worst. They do nothing that corporations don't do, except fight for better worker compensation and conditions. (Oh the Horror!!!)
They are fighting against people who would endanger the life and livelihood of their workers every second of every day if they thought it was more profitable. Without a law corporations would happily let those people work in those life threatening conditions indefinitely, without telling them how dangerous it was (Basically every manufacturing plant where there are dangerous chemicals is an example of this).
Those same corporations will fight and pay millions to try to prevent admitting how dangerous some condition is and/or calculate if it is cheaper to just pay safety fines rather than meet the legal safety standards in place. If it's cheaper to commit the crime and pay the fine than it is to ensure their workers safety, you can bet they will likely risk their workers lives to make a little more money.
The worst things Unions ever did were during the Hoffa days, since then they are a kitten in a aquarium of sharks (corporations). I challenge anyone to find something a Union has done (or settled and denied wrongdoing) that is worse than something you can find from a corporation? (Keep in mind the Mob and Casinos worked together too, so all the Hoffa stuff was pretty well paralleled by those corporations)
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National Employment Law Project Report on Job Recovery
We find that during the labor market downturn (measured from January 2008 to February 2010), employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries. By contrast, during the recovery (measured from February 2010 to February 2014), employment gains have been concentrated in lower-wage industries. Specifically:
Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth.
More dismal news about this jobless recovery. It was nice to see Geithner admit to Jon Stewart that the economy was still abominable.
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On May 23 2014 16:53 IgnE wrote:National Employment Law Project Report on Job RecoveryShow nested quote +We find that during the labor market downturn (measured from January 2008 to February 2010), employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries. By contrast, during the recovery (measured from February 2010 to February 2014), employment gains have been concentrated in lower-wage industries. Specifically:
Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth. More dismal news about this jobless recovery. It was nice to see Geithner admit to Jon Stewart that the economy was still abominable.
Could you imagine the rhetoric had the Bush administration and Republicans been able to privatize social security and injected that money into the financial crisis pushing the collapse just past the end of his presidency?
Could you imagine if instead of Bush it was Obama who had to pass TARP?
Not that facts matter to Americans....
Only a third of Americans (34%) correctly say the Troubled Asset Relief Program (TARP) was enacted by the Bush administration. Nearly half (47%) incorrectly believe TARP was passed under President Obama.
Source
Like seriously... I was clearly too ambitious wanting to get universal agreement on the earth being >~9,000 years old...
How the shit is this possible? 'Don't Know' was an option....
I seriously don't understand how this happens? Is disinformation that powerful, is it just (internalized) prejudice against democrats, probably some combination of that and more?
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On May 23 2014 17:36 GreenHorizons wrote:Show nested quote +On May 23 2014 16:53 IgnE wrote:National Employment Law Project Report on Job RecoveryWe find that during the labor market downturn (measured from January 2008 to February 2010), employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries. By contrast, during the recovery (measured from February 2010 to February 2014), employment gains have been concentrated in lower-wage industries. Specifically:
Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth. More dismal news about this jobless recovery. It was nice to see Geithner admit to Jon Stewart that the economy was still abominable. Could you imagine the rhetoric had the Bush administration and Republicans been able to privatize social security and injected that money into the financial crisis pushing the collapse just past the end of his presidency? Could you imagine if instead of Bush it was Obama who had to pass TARP? Not that facts matter to Americans.... Show nested quote +Only a third of Americans (34%) correctly say the Troubled Asset Relief Program (TARP) was enacted by the Bush administration. Nearly half (47%) incorrectly believe TARP was passed under President Obama.
SourceLike seriously... I was clearly too ambitious wanting to get universal agreement on the earth being >~9,000 years old... How the shit is this possible? 'Don't Know' was an option.... I seriously don't understand how this happens? Is disinformation that powerful, is it just (internalized) prejudice against democrats, probably some combination of that and more?
At some point the light bulbs should turn on and realize that the Prussian model of Education that the pro-Government Nationalization of Education side wants to shovel more and more power and money into has created Idiocracy, coupled with the Corporatization and inculcation of Media and State. I mean, libertarians weren't warning about how this would turn out since 1910 and Albert Jay Nock...Oh, but that lovely Massachussets authoritarian Horace Mann. Hooray!
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Cayman Islands24199 Posts
if i am not mistaken pension funds are kind of dependent on yheir investment returns. some have done well while others have 'lent' to govt to cover budget shortfalls like social security has done.
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On May 23 2014 14:07 IgnE wrote:Show nested quote +On May 23 2014 11:11 JonnyBNoHo wrote:
We can't pretend that pensions aren't an issue. The need to be reasonable and they need to be funded. If they can't be funded than the public needs to decide what's going to change. We can't kidding ourselves that taxes won't go up, pensions will be fully funded and no programs will be cut. That fairy tale doesn't have a happy ending. I'm glad we agree jonny. Taxes will have to go up.
That's for voters to decide. And if voters feel that government workers have better benefits than they do, they may not want to support that.
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On May 23 2014 17:36 GreenHorizons wrote:Show nested quote +On May 23 2014 16:53 IgnE wrote:National Employment Law Project Report on Job RecoveryWe find that during the labor market downturn (measured from January 2008 to February 2010), employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries. By contrast, during the recovery (measured from February 2010 to February 2014), employment gains have been concentrated in lower-wage industries. Specifically:
Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth. More dismal news about this jobless recovery. It was nice to see Geithner admit to Jon Stewart that the economy was still abominable. Could you imagine the rhetoric had the Bush administration and Republicans been able to privatize social security and injected that money into the financial crisis pushing the collapse just past the end of his presidency? Could you imagine if instead of Bush it was Obama who had to pass TARP? Not that facts matter to Americans.... Show nested quote +Only a third of Americans (34%) correctly say the Troubled Asset Relief Program (TARP) was enacted by the Bush administration. Nearly half (47%) incorrectly believe TARP was passed under President Obama.
SourceLike seriously... I was clearly too ambitious wanting to get universal agreement on the earth being >~9,000 years old... How the shit is this possible? 'Don't Know' was an option.... I seriously don't understand how this happens? Is disinformation that powerful, is it just (internalized) prejudice against democrats, probably some combination of that and more?
TARP was great. Obama should be glad he's being credited for it.
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On May 24 2014 00:11 JonnyBNoHo wrote:Show nested quote +On May 23 2014 17:36 GreenHorizons wrote:On May 23 2014 16:53 IgnE wrote:National Employment Law Project Report on Job RecoveryWe find that during the labor market downturn (measured from January 2008 to February 2010), employment losses occurred throughout the economy, but were concentrated in mid-wage and higher-wage industries. By contrast, during the recovery (measured from February 2010 to February 2014), employment gains have been concentrated in lower-wage industries. Specifically:
Lower-wage industries constituted 22 percent of recession losses, but 44 percent of recovery growth.
Mid-wage industries constituted 37 percent of recession losses, but only 26 percent of recovery growth.
Higher-wage industries constituted 41 percent of recession losses, and 30 percent of recovery growth. More dismal news about this jobless recovery. It was nice to see Geithner admit to Jon Stewart that the economy was still abominable. Could you imagine the rhetoric had the Bush administration and Republicans been able to privatize social security and injected that money into the financial crisis pushing the collapse just past the end of his presidency? Could you imagine if instead of Bush it was Obama who had to pass TARP? Not that facts matter to Americans.... Only a third of Americans (34%) correctly say the Troubled Asset Relief Program (TARP) was enacted by the Bush administration. Nearly half (47%) incorrectly believe TARP was passed under President Obama.
SourceLike seriously... I was clearly too ambitious wanting to get universal agreement on the earth being >~9,000 years old... How the shit is this possible? 'Don't Know' was an option.... I seriously don't understand how this happens? Is disinformation that powerful, is it just (internalized) prejudice against democrats, probably some combination of that and more? TARP was great. Obama should be glad he's being credited for it.
LOL? You don't see a problem with 47% of people not being able to comprehend an incredibly simple and provable fact?
Your takeaway was that Obama should be happy that people are totally oblivious? That's an insatiably cynical view.
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EPT
