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View Diary: The political underbelly of the pensions crisis: What broke the system, and how do we fix it? (84 comments)

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  •  Re (0+ / 0-)
    Politicians tend to prefer a higher discount rate, which reflects a better “expected” yield on assets in the pension fund, since it allows them to justify provisioning less for pensions now.
    Public unions prefer them for the same reasons. They can figure, hey, if the fund doesn't meet its expected performance then taxpayers will eat the difference anyway, so who cares?

    I would gladly give back the "wage penalty" if it meant public workers were in 401ks like the rest of us going forward.

    (-5.50,-6.67): Left Libertarian
    Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

    by Sparhawk on Tue Feb 25, 2014 at 04:14:37 PM PST

    •  Do you like your 401K plan? And if you do, (2+ / 0-)
      Recommended by:
      poitbrain, Chi

      why do you prefer it over more traditional pension plans?  Also, what percentage of your salary goes into it, and do you also particpate in Social Security?  

      Plutocracy (noun) Greek ploutokratia, from ploutos wealth; 1) government by the wealthy; 2) 21st c. U.S.A.; 3) 22nd c. The World

      by bkamr on Sat Mar 01, 2014 at 08:55:59 PM PST

      [ Parent ]

      •  Who cares (1+ / 0-)
        Recommended by:
        AlexDrew

        I am willing to offer public workers the same deal most private workers get: a matched 401k and Social Security. Whether I "like" it or not is not really relevant: what is relevant is that public workers get the same deal private ones (who pay their salaries) get.

        (-5.50,-6.67): Left Libertarian
        Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

        by Sparhawk on Sat Mar 01, 2014 at 09:33:15 PM PST

        [ Parent ]

        •  Just because private employers have abandoned the (9+ / 0-)

          social contract of a defined pension, it doesn't mean that public entities must automatically do the same.  There has been a deliberate effort by private industry to raid their pension funds and stiff their retirees that clearly breaks the social contract that existed after WWII to about some time in the late 70's or early 80's, when the courts let them get away with it.  

          And it feels like I'm livin'in the wasteland of the free ~ Iris DeMent, 1996

          by MrJersey on Sat Mar 01, 2014 at 10:41:04 PM PST

          [ Parent ]

          •  Yes that's exactly what it means (0+ / 0-)

            Every dime of public sector compensation is paid for by private workers. It is only fair to give private workers the most economical return on the money they pay, which means making pay and benefits the same in both spheres.

            Public workers always have the option of quitting and getting private jobs if they think they can make more elsewhere. That's what they told me in my private job when they cut our health plan last year.

            (-5.50,-6.67): Left Libertarian
            Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

            by Sparhawk on Sun Mar 02, 2014 at 08:28:18 AM PST

            [ Parent ]

            •  But they can't quit retroactively (3+ / 0-)
              Recommended by:
              MrJersey, dandy lion, Mostel26

              which is what they'd need to do when they find the pension they've worked 25 years for is being taken away from them.

              Also , this -  

              It is only fair to give private workers the most economical return on the money they pay, which means making pay and benefits the same in both spheres.
              isn't very logical.  An "economical return" on an investment has nothing whatsoever to do with equity in pay.  Taxpayers deserve to get value for the tax money they pay.  Workers deserve to get paid for the value they produce.  Neither of those things has any direct tie to pensions at all, although pensions may be part of the pay received by workers.
              •  Covering legacy pension obligations... (0+ / 0-)

                ...provides zero value to the taxpayer. It's paying again for work done years ago. Smart private sector workers avoid localities with significant legacy pension obligations like the plague.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Sun Mar 02, 2014 at 12:08:00 PM PST

                [ Parent ]

                •  We've had this argument before. (3+ / 0-)

                  I know your opinion is that no taxpayer should ever have to pay taxes for something that happened before they arrived or were born, and no taxpayer should ever have to pay taxes for something they personally didn't vote for.

                  I think it's crazy.

                  If a city mismanages its pension funds so that taxes have to be raised to cover the pensions, then the taxpayers get to pay for that whether or not they think they're receiving any value.  (They are, but that's another argument.)  The taxpayers elected people who didn't handle these properly.    Therefore, they get to pay for their mistake.

                  And it's not paying AGAIN for work done years ago...it's paying what you promised some worker years ago and withheld until a future date.  Pension money is deferred salary.  it's not some magical gift.

            •  Public workers pay taxes too, and they make sub (2+ / 0-)
              Recommended by:
              Mostel26, HM2Viking

              stantial contributions to their pension plans as well.  They make the trade off for stable benefits and lower immediate salaries.  I'll tell you what, since every public employee's salary and benefit package is a matter of public record, I would go along with your agenda if we were to allow the IRS to make everyone's salary and benefit package a matter of public record so we could truly assess who was being paid more or less for the same type of work.

              And it feels like I'm livin'in the wasteland of the free ~ Iris DeMent, 1996

              by MrJersey on Sun Mar 02, 2014 at 10:46:42 AM PST

              [ Parent ]

        •  I see (4+ / 0-)

          So public employees are now eligible for bonuses, holiday pay, and all those private sector things they don't get now?  

          There already is class warfare in America. Unfortunately, the rich are winning.

          by Puddytat on Sat Mar 01, 2014 at 11:47:04 PM PST

          [ Parent ]

          •  Don't forget (5+ / 0-)
            Recommended by:
            Chi, Mostel26, jbsoul, FindingMyVoice, Puddytat

            The company car, travel to conventions, professional association memberships, being permitted to have outside employment, being permitted to accept gifts (no lunches - if you drop cookies off at Xmas - they go to the homeless shelter) oh - and being allowed to be part of the electoral process?

            In my city - you can't even lend your name to support a candidate outside of work hours. Can't run for office. Can't be a delegate - be a party official etc.

            Certainly can't ever fire a rude customer.

            And - who's going to make up that 30 years worth of 401k match & appreciation at say a straight Dow market basket rate?

            They've never put in more than the legally required minimum by state law - not what was needed by contract. But - you can be sure the hedge fund guys running the pension fund - those contracts were fully paid out.

          •  Assumption is wrong (1+ / 0-)
            Recommended by:
            Sparhawk

            Every ounce of productivity is wrung from most in the private sector, and the perks you mention are relics of an earlier, more prosperous time.  Such job amenities are fiction for many of us who are not at the very top of management in corporate America.

            My husband and I are professionals. Our income plunged 40% during the recession and hasn't returned to previous levels.  We were lucky to keep our jobs! Neither of us gets our business expenses paid by our employers. I get a paid vacation but my husband does not. My husband is eligible for profit-sharing but there is no guarantee that there will be profit to share, and management is hinting that things aren't going so well. I consider us to be doing well but we

            What is worse: I can't think of anyone I know who is in their 20s who aren't working overtime in the form of a 2nd or 3rd job.

            Dementia, you better treat me good. ~Conor Oberst "Slowly (Oh So Slowly)"

            by NotActingNaive on Sun Mar 02, 2014 at 09:41:58 AM PST

            [ Parent ]

            •  So, instead of expecting to be raised up (2+ / 0-)
              Recommended by:
              HM2Viking, Darth Stateworker

              you'd rather have everyone be forced to join you?  At that rate, you'll end up working at a minimum wage job with no benefits because you will be forced to accept their standards.

              I don't support joining the race to the bottom.

              There already is class warfare in America. Unfortunately, the rich are winning.

              by Puddytat on Sun Mar 02, 2014 at 12:44:03 PM PST

              [ Parent ]

              •  Yes that's exactly what we support (0+ / 0-)
                you'd rather have everyone be forced to join you?  At that rate, you'll end up working at a minimum wage job with no benefits because you will be forced to accept their standards.
                And yet most people in the private sector make more than minimum wage. How is that possible by your theory?

                Public compensation and benefits should always generally follow private compensation and benefits. Declines or increases in private pay should drive similar changes in public pay. There is no earthly reason why it should be otherwise. Private workers pay all of public salaries.

                (-5.50,-6.67): Left Libertarian
                Leadership doesn't mean taking a straw poll and then just throwing up your hands. -Jyrinx

                by Sparhawk on Sun Mar 02, 2014 at 08:08:20 PM PST

                [ Parent ]

        •  No (0+ / 0-)

          What is the right thing is to get rid of the 401k model and replace it with guaranteed retirement accounts

          Your ignorance about the public pension system shines through in every comment

          The db plans when properly managed save taxpayers money in the long run

    •  A little more about the 401 k theft scheme (0+ / 0-)

      5. 40 Cents of Every 401(k) Dollar Goes to the Banks

      Saving $1,000 a year for  30 years in a non-fee 401(k) fund and then holding the accumulated sum for another 20 years would net an investor $269,000. With a smallish-sounding industry average fee of 1.3%, the same investor would net just $165,000, a 39% reduction.

      6. Two Dollars: The Approximate Wealth of Black Families for Every $100 of Wealth for White Families

      http://www.alternet.org/...

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