Taxpayers and Public Pensions - Comments
Regarding today's post entitled "Taxpayers and Public Pensions," several people asked for air time. I've included their comments below. If you are interested in rebutting or adding a similar opinion, email contact@fiduciaryleadership.com.
"All public sector retirement plans should be the same. We need to cure the actuarial issues caused by retirees thinking they can contribute relatively minuscule amounts for 20 or 25 or 30 years and retire for 30 or 40 or even 50 years thereafter. It can't be done and we are seeing that now. Retirement before age 65 years should be discouraged. It is important to increase the number of years of participants' contributions and reduce the number of years associated with paying out benefits. I further recommend a maximum payout of $5,000 per month, regardless of sick days, overtime, unused vacation or any other nonsense included in the benefit calculation. Remember that the maximum payout for Social Security recipients is about $3,000 per month."
"Civil Servant pensions are extraordinarily generous (with rich formulas, early retirement ages, and post-retirement COLA increases) and therefor extraordinarily EXPENSIVE. The total cost (as a level annual percentage of cash pay) of civil servant pensions is typically 25+% for non-safety workers and 35+% for Safety workers (due to an even richer benefits). This compares to a private sector pension that generally costs the employer about 7.5% of an employee's pay. With cash pay in the public sector now equal to or greater than cash pay in comparable Private Sector jobs, there is ZERO justification for ANY (yes, ANY) larger public sector pension benefits. Therefore, the cost of public sector pension in excess of the 7.5% offered in the private sector should be paid-for by the EMPLOYEES .... NOT the taxpayers. Hence, non-safety workers should contribute 25% less 7.5% or 17.5% of each person's pay. Safety workers should contribute 35% less 7.5% or 27.5% of each person's pay. Now, do I really believe this will even happen? No, of course not. My point is to demonstrate how ridiculously EXCESSIVE the pensions are for public workers and to state that the best (and very NECESSARY) solution is an immediate reduction in the BENEFIT LEVEL of at least 50+% for FUTURE years of service for CURRENT (yes CURRENT) workers. The taxpayers have been hoodwinked long enough."
