126 replies
  1. Charles says:

    “The average public sector worker spends about 30 years in the workforce and 30 years retired, and the average private sector worker spends about 40 years in the workforce and 20 years retired.”

    Exactly what I am doing. Work 40 years and retired for twenty. The State paid more into my retirement than they did into Social Security. Which was exactly what was agreed to in 1969. So the agreement finally pays off. And I also get Social Security because we both paid into it.

    Perfectly fair. A Contract is a Contract.

    Nothing unfair or unreasonable here. Just numbers, risk and a lot of time invested.

    I did my part and the State did theirs and now I collect.

    So I keep hearing, take his money and put it into SS. Hey, I already paid into SS since I was 15 years old. How do you make that work. Oh, take all his money and put it into a 401(k). Private workers fell for that, I didn’t.

    Well then, shoot him and take everything he has, because I don’t have it.

    Every solution persons come up with for this are only Communist or Fascist or German style Nazi Socialist.

    Maybe you have something I would like to have. Keep it, it is yours. Just don’t come and rob me of what I have earned in a fair above the board deal.

  2. Pelye says:

    In those dot com years, if you ask a private employee to give up his private company job and 401k for a public sector job and pension program, he would think you are crazy. The underperformance of the private job market and stock market in the recent decade shattered his dream of having a wealthy life as a private sector employee or as a retiree from a private company job. He suddenly realized that the public sector job and pension program he condemned a few years ago is so much more covetable. Well, since the history can’t be undone, he is trying his best to make sure that those who chose public sector job a few years ago should pay for his bad decision as well. Talk about greedy. It is usually greedy against people who are in the same social caste: working class. That explains why there is no hard feeling agaist the wealthy employer or those who screw up his retuirement fund.

  3. Charles says:

    Pelye
    December 25, 2010 at 5:41 am
    “He suddenly realized that the public sector job and pension program he condemned a few years ago is so much more covetable.”

    Excellent wording as in “thy shall not covet.”

    Precisely what this is all about. “Tough Love” and company made the wrong decision and now they are full of anger. They didn’t take the longer, harder road. And now they are furious because they now know the made a mistake.

    So they shout “unfair, unfair” just like the grasshopper screamed to the hard working patient ant as winter snows arrived.

  4. Charles says:

    Pelye
    December 25, 2010 at 5:41 am
    \"He suddenly realized that the public sector job and pension program he condemned a few years ago is so much more covetable.\"

    Excellent wording as in \"thy shall not covet.\"

    Precisely what this is all about. \"Tough Love\" and company made the wrong decision and now they are full of anger. They didn\’t take the longer, harder road. And now they are furious because they now know the made a mistake.

    So they shout \"unfair, unfair\" just like the grasshopper screamed to the hard working patient ant as winter snows arrived.

  5. Editor says:

    Charles: This is not personal. Public sector employee pensions and benefits and rates of pay are unsustainable. Period. You think you are entitled to collect a pension that is three or four times what you would have made under social security, despite the fact you admit your pay was raised to match rates paid private sector late in your career and your pension was based on that unexpectedly higher final pay. Don’t you think that 90% pension should be calculated on 35% less final pay? Why not? Again, this is not personal, your case is one in millions, and collectively it is something we can’t afford. You claim you worked harder for less money as a public employee. What about all that vacation you took, all those times you didn’t have to work overtime – or were well compensated for it? What about the job security? You claim that private sector workers are angry – of course we are, because you think we’re supposed to pay for your failed pension fund finances through higher taxes. Why wouldn’t that make anyone angry? You seem to think your pension funds are not vulnerable to the same market drops that have decimated 401Ks. This is naive on your part. Not everyone is able to work in the public sector, and not all of us were irresponsible with our cash and our savings. In my opinion, it is your pension funds who constitute the greatest threat to our financial markets. They are pouring billions into more and more risky investments in a desperate attempt to maintain unrealistically high returns. You should consider that public employee pension funds ARE Wall Street. They ARE the brokers and gamblers, not me, not you. On this website I have tried to empathize with the plight of public sector employees who have been promised too much. It would further our dialogue if you would do the same. Merry Christmas.

  6. Charles says:

    Editor,

    I appreciate your candor. (Honesty, even when the truth is not pleasant.)

    I have difficulty listening to Tough Love when he constantly wishes the worst for persons who have worked hard for a lifetime. (Perhaps you should read his comments in the Sacramento Bee.)
    In my role as a Resident Engineer I have saved the State of California more than one half of a million dollars by simply being on my toes and paying attention to the plans and contracts.

    I have spent easily twenty years in the Mojave Desert where there is no shade. I earned every dime I received from taxpayers.

    Obviously it is disappointing to me to hear constant talk about GED bums sitting in cubicles pushing pieces of paper around. I probably spent at least 5% of my time sitting behind a desk, the other 95% in the field. Which is exactly where I wanted to be. Days go by fast without a clock on the wall.

    I have twice in my career worked seven days a week and at least 12 hours per day for three months straight working to open a State highway.

    ” What about all that vacation you took?

    I remember taking a vacation for one week in 1974. Other than that I took vacation here and there for a day or two because if I didn’t I would simply lose it.

    “Don’t you think that 90% pension should be calculated on 35% less final pay?”

    Just because I made 65% of pay in the private sector you are saying I should get 65% in retirement also? I don’t understand what you are saying here. I am not complaining about the past, Actually I loved my job. I frequently wondered “They are actually paying me to do something I enjoy?”

    “all those times you didn’t have to work overtime –”

    See above. In 1983 I worked 800 hours of overtime. Yes, the money was nice, but I was only 33 at the time. I don’t think I would be able to do that now. And as you get older it is easier to control your spending than to earn money at such a price.

    “What about the job security?”

    I was laid off from September of 1975 until September of 1977. What job security are you speaking of?

    “you think we’re supposed to pay for your failed pension fund finances through higher taxes.”

    Calpers is taking 19% of payroll. They took 18% in 1969. I know, I was there. Of course Social Security doesn’t pay anywhere near as well for dollars paid in. I suggest you drive to Washington, DC and shoot the rascals who have been raiding that fund literally for decades.

    “You seem to think your pension funds are not vulnerable to the same market drops that have decimated 401Ks.”

    Calpers has rebounded to $221,000,000, the largest in the country. Only an idiot sells low. They waited. And if this recession continues forever they will be all out of money in 2035. If I live that long I will be glad to see it. I will have outlasted my father by 5 years.

    “They are pouring billions into more and more risky investments in a desperate attempt to maintain unrealistically high returns.”

    I see this also. Calpers needs to be more conservative. However, I do not even pretend to understand financial markets. Apparently they have made up for most of their losses. I simply go by the fact that they have make 7.79% over the last 20 years. Their target was 7.75%. And they are considering lowering that to 7.5%.

    I think assuming a rate of 4% or less as in T-bills is idiotic. Those “wet behind the ears” kids at Stanford will not be a huge success in the real world.

    “despite the fact you admit your pay was raised to match rates paid private sector”

    No. My pay was raised to match Cities and Counties in California. Even the State Department of Personnel (meaning Arnold) admits this is still 11% below private total compensation.

    “It would further our dialogue if you would do the same. Merry Christmas.”

    Thank you! Take care…

  7. Charles says:

    I needed to add one more comment. The US Supreme Court has ruled that Social Security is a joke. The Government has NO obligation to pay off.

    California State pensions are in fact covered by the United States Constitution Article One. (Notice the One)

    California can not go bankrupt.

    In any event, I am somewhat tired of lounging around the house doing nothing. So I go to the senior center and volunteer my time.

  8. oz says:

    Editor,

    “Decimated 401k’s” ???

    Please. Your hyperbole only serves to infuriate the uninformed.
    Was your 401k “decimated?” honestly?

  9. oz says:

    One more thing,

    I am not a socialist, but it is possible for essentially everyone to work
    in the public sector for a time, even in a capitalist country.
    (We had such a policy in place in the USA for quite some time)

    But, you already know my opinions on mandatory service.

    Maybe you could revisit your thoughts on that in a later post.

  10. Tough Love says:

    WOW … I seem to have really hit home with “Charles” … being attacked when I haven’t even commented.

    Good. I honestly believe Charles is angry with me for speaking the truth (a truth he cannot seem to come to terms with)… and clearly (and factually) describing the tsunami of financial pain (and lost services) bearing down on ALL of us.

    My work my me aware of this long ago. These pensions were NEVER affordable, disguised for a time by extraordinary and extended stock market performance (from 1980-1999) likely never to be repeated.

    “MY” comments will do nothing to fix these problems (meaning a substantial reduction in retiree healthcare and pension growth for FUTURE years of service for CURRENT employees), but (together with others … like Ed Ring) we ARE getting the attention of the powerful national media (ala the recent CBS 60 Minutes broadcast) that CAN spread the truth of the desperate situation we are in and if nothing else embarrace eouir elected officials sufficient to finally address this situation with REAL solutions … and NOT the ineffective clipping at -the0-edges reforems such as redcutions only for new employees.

  11. Tough Love says:

    WOW … I seem to have really hit home with Charles … being attacked when I haven’t even commented.

    Good. I honestly believe Charles is angry with me for speaking the truth (a truth he cannot seem to come to terms with)… and clearly (and factually) describing the tsunami of financial pain (and lost necessary services) bearing down on ALL of us.

    My work made me aware of this LONG ago. These pensions were NEVER affordable, disguised for a time by extraordinary and extended stock market performance (from 1980-1999) likely never to be repeated, and more recently, accounting trickery that would be illegal in the financial reporting of Private Sector Pensions Plans and OPEB.

    MY comments will do nothing to fix these problems (meaning massive outsourcing, a substantial reduction in retiree healthcare and pension growth for FUTURE years of service for CURRENT employees), but (together with others) we ARE getting the attention of the powerful national media (ala the recent CBS 60 Minutes broadcast) that CAN spread the truth concerning the desperate situation we are in, and if nothing else, sufficiently embarrass our elected officials to finally address this situation with REAL solutions … and NOT the ineffective clipping-at-the-edges reforms such as reductions only for new employees.

    And Charles ….. my career choice was extraordinary both in satisfaction and monetary rewards (far in excess of yours). Aggressive perhaps, but I’m trying to help. You too blind to see that.

  12. Tough Love says:

    WOW … I seem to have really hit home with Charles … being attacked when I haven’t even commented.

    Good. I honestly believe Charles is angry with me for speaking the truth (a truth he cannot seem to come to terms with)… and clearly (and factually) describing the tsunami of financial pain (and lost necessary services) bearing down on ALL of us.

    My work made me aware of this LONG ago. These pensions were NEVER affordable, disguised for a time by extraordinary and extended stock market performance (from 1980-1999) likely never to be repeated, and more recently, accounting trickery that would be illegal in the financial reporting of Private Sector Pensions Plans and OPEB.

    MY comments will do nothing to fix these problems (meaning massive outsourcing, a substantial reduction in retiree healthcare and pension growth for FUTURE years of service for CURRENT employees), but (together with others … like Ed Ring) we ARE getting the attention of the powerful national media (ala the recent CBS 60 Minutes broadcast) that CAN spread the truth concerning the desperate situation we are in, and if nothing else, sufficiently embarrass our elected officials to finally address this situation with REAL solutions … and NOT the ineffective clipping-at-the-edges reforms such as reductions only for new employees.

    And Charles ….. my career choice was extraordinary both in satisfaction and monetary rewards (far in excess of yours). Aggressive perhaps, but I’m trying to help. You’re too blind to see that.

  13. Fake SkippingDog says:

    Pelye
    December 25, 2010 at 5:41 am
    In those dot com years, if you ask a private employee to give up his private company job and 401k for a public sector job and pension program, he would think you are crazy. The underperformance of the private job market and stock market in the recent decade shattered his dream of having a wealthy life as a private sector employee or as a retiree from a private company job. He suddenly realized that the public sector job and pension program he condemned a few years ago is so much more covetable
    =============================

    LOL..yeah, everyone in CA worked in Silicon Valley in 1999 and made $10 billion, even janitors! I bet your dot com janitor was also your next door neighbor who made $500K a year doing loans after the dot com bust too!

    Another trough feeder whopper.

    The average CA state state salary is $33K, plus $10K in benefits-and it has remained there, or gone down, since 2000. Average public sector salary is $59K and another $60K in benefits and has risen 40% since 2000, in the case of “public safety” it has risen 97% since 2000.

    In addition the pension raises, as high as 50%, were all done retroactively which is illegal, so it is not a valid “contract” as the troughies put it.

    Hope the truth helps our GED gov employees see the truth.

  14. Rex The Wonder Dog! says:

    I needed to add one more comment. The US Supreme Court has ruled that Social Security is a joke. The Government has NO obligation to pay off.

    =========================

    Not true. But please feel free to cite the case.

    BTW, CA as a sovereign entity does not have to pay off any of it’s debts-including pensions-since the state itself cannot be sued under the 11th Amendment.

    Cities, counties and other subdivisions of the state can file Chapter 9 BK and shed any debt the BK court will allow.

  15. Rex The Wonder Dog! says:

    Tough Love
    December 29, 2010 at 12:08 pm
    WOW … I seem to have really hit home with “Charles” … being attacked when I haven’t even commented.

    =========================

    TL, Charles is a certified public employee milking the system, making the same old same old bogus claims, like the old favorite “we have a CONTRACT”, yet forgets that 50% of his retroactive pension was an illegal gift of public funds.

    When he takes a pension haircut – which he will – I hope he comes back here with his favorite talking point claim that he has a “contract”……lol, it kills me how these public employees have such the entitlement mentality and think they’re not going to be taking a hit. Newsflash – $28 billion deficit in a $90 billion operating budget.

  16. SkippingDog says:

    Here we go one more time before the end of the year. Rex and TL telling all of us how “unsustainable” their obligations are to the public employees who have provided years of service. Funny how, whenever the rhetoric heats up, there’s some event like the most recent Chicago fire to remind us of exactly how the work of public employees, particularly firefighters and police officers, is far different and more directly dangerous than other vocations.

    Nevertheless, Rex thinks such comparisons are unfair since cab drivers and 7-11 clerks get murdered on the job, and he and TL don’t seem to ever get the difference in circumstances through their thick skulls.

    Keep pounding away, but remember that the pensions you’re on the hook for will ultimately be paid. Even Rex’s favorite home town of Pritchard, in bankruptcy twice in the last decade, will eventually pay their retirees with state transfer funds.

  17. Algy Moncrief says:

    WORSE THAN BERNIE MADOFF – COLORADO’S 2010 PENSION THEFT.

    What do the Colorado Legislature and Bernie Madoff have in common? Both stole retirement benefits that were earned over many decades.

    We have 80-year old widows in Colorado, who worked hard for the State for thirty years, who trusted the State and made their pension contributions like clockwork for decades, only to see their contracted retirement incomes stolen by the State. This money was taken out of their pockets because the State failed to make pension contributions as recommended by their own actuaries, to the tune of $2.7 billion in the last seven years. If the state had responsibly followed the recommendations of its actuaries, the PERA trust funds would now be more than 90 percent funded. The Colorado pension shortfall is primarily a result of legislative action over the last decade, Bill Owens, et al, in 2000 cut contributions and allowed the purchase of cheap service credit, and now the Legislature wants retirees to bear the cost of legislative ineptitude. In testimony to the Legislature even the proponents of the reform bill acknowledged this historic under-funding of the pension. PERA claims that the pension fund was unsustainable without their actions, because the funded ratio of the pension stands at 68 percent. However, the funded ratio of the pension was in the low 50 percent range in the 1970s, and the pension still exists. If a funded ratio of 68 percent this year is unsustainable, how has the pension been sustained since the 1970s when the funded ratio was in the 50s? Not much of a rationale for breaking retiree contracts.

    If you find yourself short on funds, you rearrange your spending priorities, or raise additional revenue, YOU DON’T BREAK CONTRACTS! Why would the Colorado Legislature choose to break pension contracts before breaking other contracts, such as construction contracts? How can a state that is in default, that breaks contracts, maintain its credit rating?

    The fact that what Colorado did to public sector employees in this year’s pension reform bill (SB1) cannot be done to private sector employee pensions under I.R.C. Section 411(d)(6), says quite a lot about the moral underpinnings of SB1. This federal “anti-cutback rule” for private sector DB plans permits changes to the plans only if the changes operate on a prospective basis.

    Colorado PERA’s actions make it clear that the time has come for the inclusion of public defined benefit plans under all Internal Revenue Code Qualified Plan requirements. It is now obvious that allowing the states to regulate public defined benefit plans does not afford equal protection to state and local government employees.

    PERA has put it in writing in pension plan materials over the years, that the COLA “is guaranteed”. Members purchasing service credit gave PERA thousands of dollars based on these materials. Money that they could have left in their 401Ks. Expect a new lawsuit from these SB1 victims in the near future. PERA officials now claim that the members cannot rely on their pension plan documents regarding their defined benefits. How egregious is that? You print plan documents for your pension, and later state that the pensioners should not believe the documents you distributed? (This comment was made by PERA officials at a hearing before the JBC.) Note that Goldman Sachs recently paid a half billion dollar settlement to the SEC based on promises made in plan documents. Apparently, some judges believe that plan documents can set forth contractual terms. In any event, the contractual pension language is set forth clearly in Colorado law.

    Colorado’s retiree COLA (and those of 36 other states) are “automatic COLAs” as opposed to “ad hoc COLAs” (which exist in about a dozen states and can be periodically altered.) Colorado’s COLA of 3.5 percent is guaranteed in Colorado law in an identical fashion to the base retirement benefit itself. So, the PERA retiree’s claims are based on both statutory language and plan documents. This 3.5 percent COLA won’t look so hot in the coming years if inflation spikes. My guess is that just a handful of members of the Colorado Legislature could tell you the difference between an automatic COLA and an ad hoc COLA.

    The Colorado pension reform bill’s (SB1) proponents should accept that states cannot legislate away a debt for work that was completed in the past. What the state is attempting is a claw back of deferred pay. The bill’s sponsors should accept that states cannot avoid their contractual obligations simply because they prefer to spend resources on alternative public services or obligations. I have a contract with my mortgage company. They don’t care if I want to spend my mortgage payment money on a new TV.

    Some pension reform advocates argue that public sector pensions should be held to the same standards as private sector pensions. My response to that is “I agree wholeheartedly!” Under the federal Internal Revenue Code reducing accrued pension benefits for private pensions is illegal. If the public sector PERA pension were covered under this I.R.C. law and held to the same standards as private pensions, then last February’s theft of accrued benefits by the Colorado Legislature would not have been attempted. Essentially, federal law provides higher protection to private pensions than it does to public sector pensions. Public pension members are forced to appeal to the courts to prevent the theft of their benefits. (Happening, see saveperacola.com.)

    Members of the Legislature pointed out many times, to no avail, that the so called “pension reform bill” was a violation of contracts to which the State was a party. Here are some examples (on tape from the floor debate):

    Rep. Lambert: “I have heard from my constituents, as many of you have, that this proposal will breach retiree’s contracts.”
    Rep. Swalm: “We’re breaking new territory in this state by trying to reduce the COLA. We’re probably going to get a lawsuit out of that. If we cut the 3.5 percent COLA there will be a lawsuit.
    Rep. Gerou said that it is a disservice to the state to rush a bill through when her committee knew that it will go to litigation, and said what we are doing to the retirees is wrong.
    Rep. Delgroso said that it is tough for him to tell people that he is going to break their contract.
    Senator Harvey said “We have made a commitment. We have a contract with current retirees. That is already in place. Reforms should be made for new hires. We do not have that commitment to new hires.
    Senator Spence said “The bill places an unfair burden on retirees.”
    Senator Scheffel said “We are breaching our promises to existing retirees.”
    Senator Lundberg said “This bill is a deal that was cut before this body met.”

    The cavalier abandonment of contractual obligations brings shame to the state of Colorado, aligns Colorado with Third World countries like Bolivia. No person, Republican or Democrat should countenance the breach of contracts. Conservatives support contract law as the foundation of capitalism.

    So, why is the SB1 theft more egregious than the Madoff theft? The Colorado Legislature stole money from retirees who are less well off than Madoff’s pre-qualified hedge fund clients.

    The Madoff victims were taking risks to seek a higher return on their investments, the Colorado PERA victims simply trusted that their contracts would be honored.

    Colorado PERA and the Legislature justified their theft on false premises, citing 2008 market numbers when they knew the markets had recovered approximately 20 percent in 2009. PERA’s General Counsel stated on tape before the 2010 legislative session began that he expected a pension return “north of 15 percent”) for 2009.

    It appears that Colorado PERA used the very resources of PERA members to hire a team of lobbyists (up to a dozen) to take earned benefits from those same members. That is truly insane.

    Many members of the Legislature acted in ignorance. Spoonfed by the lobbyists, they ignored the legal rights of PERA retirees, and swallowed whole without question the assertions of PERA’s CEO and its chief legal counsel. If the members had read any case law, (for example, the state defined benefit pension case law summary by Prof. Amy Monahan at the University of Minnesota School of Law, Google it!), or even the 2004 Colorado AG opinion on pension benefits (retiree benefits are inviolate) they would not have supported the bill.

    PERA’s own General Counsel was quoted in a 2008 Denver Post article as follows: “The attorney general’s opinion seems clear that fully vested employees — those retired or with enough years of service to retire — cannot see any benefits reduced, including cost-of-living adjustments, Smith said.” Why would Smith state that an action is illegal, and then decide to champion that action in the following year? Sounds quite fickle.

    Although members of the Colorado PERA Board of Trustees are fiduciaries, charged to act only in the interests of the members and the retirees, they recommended SB1, acting primarily in the interests of PERA employers who were concerned with keeping their contribution rates low. This is the clearest case of groupthink I have seen in my life. Don’t they get it? It doesn’t matter if five or ten percent of your retired members endorse your plan. It doesn’t matter that you drove all over the state to visit with your pension members. That is not the standard for constitutionality in the US.

    Adding insult to injury the Legislature stole more money than it needed. The pension theft bill sought to increase PERA’s funded level to 100 percent, although an 80 percent funded level is considered well-funded among pension experts and actuaries. You don’t have to pay off your mortgage tomorrow, and PERA doesn’t have to pay off all of its pension obligations tomorrow. They have 30 years.

    There were many other options available to address the pension shortfall, options that have been adopted, or are under consideration in dozens of states. See the legal, prospective pension reform that was accomplished in Utah this year. Look Legislature . . . when the real pension reform happens in Colorado in a few years, please take the time to examine these prospective, legal reform options. You are members of the National Conference of State Legislatures, listen to their people, they will let you know what legal reforms are being made by states.

    The Legislature had the ability to investigate the legality of its actions up front, but chose to act with no legal advice. Throughout the floor and committee debates on SB1 the members displayed an ignorance of, or an intentional disregard for the relevant case law. They failed to conduct the due diligence expected of an elected body. State legislatures across the nation are examining the legal limitations on their actions regarding pension reform, exploring all legal options prior to acting. (PERA claimed to have a legal opinion to justify their actions, but never released it.) Where is this secret legal opinion?

    Members of the Legislature have taken an oath to uphold the constitution and yet voted to violate the Contract Clause and the Takings Clause. Proponents of Senate Bill 1 refused to see that the retiree COLA (annual benefit increase) is set forth in Colorado law with the same force, status and weight as is the base retirement benefit. Only tortured legal reasoning, and wishful thinking, lead them to believe otherwise.

    PERA has been disingenuous by claiming that the reform bill represents “shared sacrifice” among employees, employers, and retirees, by not making it clear that retirees bear most of the burden of their proposed reforms, for many retirees the confiscation of benefits will reach one-quarter of their total retirement benefits received over the rest of their lives. In debate, the bill’s sponsors said that retirees would bear 90 percent of the cost of the reform. In any event, I am not relieved of my contractual obligations just because someone else has better terms in their contract. The entire premise is ludicrous.

    While ignoring its own contractual pension obligations (underfunding of $2.7 billion in the last seven years according to PERA’s own actuaries) the State of Colorado has pumped half a billion dollars into pension obligations that are not its responsibility, those of local governments (Old Fire Police Pension obligations). (This half billion is documented in a brief by the JBC staff.)

    The Legislature made a pact with unions to support the “pension reform bill” (SB1) to protect union jobs. Incredibly, these union members tossed their former members, their retired “brothers” under the bus. From the beginning the plan was “let’s steal the money we need from retirees.” During the debate on SB1, the Chairman of the House Finance Committee essentially stated that the retiree COLA had to be seized “because that’s where the money is.” Listen to the end of the tape of the House Finance hearing on the bill.

    Finally, Madoff eventually admitted to his crime, but the Colorado General Assembly is still pretending that their theft of pension benefits is something to be celebrated. They tout it as a “bi-partisan accomplishment.” This will be a long-standing embarrassment to and black mark on our state.

  18. Editor says:

    Skipping Dog: Most of us appreciate the services provided by police and firefighters. I certainly do. But those of us who have been paying attention are not happy that, over the past 10-20 years, labor unions have quietly taken control of the agenda of public safety associations and “negotiated” unsustainable compensation agreements with politicians whose campaigns were funded by union dues.

    There is no question that public safety workers should receive a premium for the risks they take. Not because their jobs are the riskiest jobs in America (fishing, mining, and several other jobs rank higher in statistical risk than police and firefighting jobs), but because they take these risks to protect US, and that is worth paying a premium. But how much premium is too much? You tell me. Do you think the average police officer or firefighter should make more per year than the average doctor or engineer? Because when you take into account the current year funding requirements for their pensions and retirement health benefits, that’s what we’ve got – at least in California.

    Even if you actually believe this – that police officers and firefighters should earn more than doctors or engineers – the problem is we absolutely can’t afford it. Taxpayers cannot afford to pay the average public safety employee total compensation of $200K per year, which is roughly what police and firefighters make in California. Please understand the reason nobody throws around numbers this big is because we are still in denial regarding how much these pension funds can actually earn via their investments, and because we aren’t even calculating the current year funding required for retirement health care. But denying this reality will not change it. It would be helpful if members of public safety organizations faced this and contributed to a rational discussion of how to scale back their compensation to sustainable and equitable levels. If we paid them less, we could afford to hire more of them, which would decrease the risks they encounter in their work.

  19. Charles says:

    Rex The Wonder Dog!
    December 29, 2010 at 1:05 pm
    I needed to add one more comment. The US Supreme Court has ruled that Social Security is a joke. The Government has NO obligation to pay off.

    =========================

    “Not true. But please feel free to cite the case.”

    OK

    Social Security benefits are not guaranteed.

    They are not guaranteed legally because workers have no contractual or property rights to any benefits whatsoever. In two landmark cases, Flemming v. Nestor and Helvering v. Davis, the U.S. Supreme Court ruled that Social Security taxes are not contributions or savings, but simply taxes, and that Social Security benefits are simply a government spending program, no different than, say, farm price supports. Congress and the president may change, reduce, or even eliminate benefits at any time.

    “BTW, CA as a sovereign entity does not have to pay off any of it’s debts-including pensions-since the state itself cannot be sued under the 11th Amendment.”

    Directly from the California Constitution:

    Amendments of 1992 to Article XVI, Section 17

    “Notwithstanding any other provisions of law or this Constitution to the contrary, the retirement board
    of a public pension or retirement system shall have plenary authority and fiduciary responsibility for
    investment of moneys and administration of the system, subject to all of the following:
    (a) The retirement board of a public pension or retirement system shall have the sole and exclusive fiduciary responsibility over the assets of the public pension or retirement system. The retirement board shall also have sole and exclusive responsibility to administer the system in a manner that will assure prompt delivery of benefits and related services to the participants and their beneficiaries. The assets of a public pension or retirement system are trust funds and shall be held for the exclusive purposes of providing benefits to participants in the pension or retirement system and their beneficiaries and defraying reasonable expenses of administering the system.

    In short you would need a new amendment to the California Constitution to change this and even then it is protected by Article One of the US Constitution under the Contracts Clause.

  20. Don Levit says:

    Folks:
    We need to distinguish between employer-employee relationships and citizen-government relationships.
    Local and state employees have an employer-employee relationship.
    These are exchange transactions, in which employees willingly took lower pay for constitutionally-guaranteed benefits.
    Social Security is a non exchange transaction, in which citizens are forced to pay taxes, and government has the discretion how to use those taxes for the genertal welfare.
    If they pay out to Social Security beneficiaries, fine.
    The government has no obligation to do so beyond the current year.
    The earlier commenter is correct about the Supreme Court.
    I can post the excerpts and links, for those who are interested.
    Taxes are not an assessment of benefits.
    They are a way to pay for government.
    I can also provide links and excerpts on exchange and non exchange transactions for those who are interested.
    These excerpts and links come from reputable governmental web sites.
    Don Levit

  21. SkippingDog says:

    Editor,

    I don’t know what the “proper premium” might be for police and firefighters in particular, but they are the only public employees who intentionally go into harm’s way on behalf of others. The reduction in police and fire deaths is largely attributable to improvements in equipment and training, but the fact remains that others who are hurt or killed on the job are the victims of crimes or accidents, not the result of conducting inherently dangerous activities on behalf of others.

    I don’t know where you and others get the repeated assertion that police and fire personnel are paid at a higher rate that physicians. If you focus only on California, even family practice physicians make upwards of $250k in nearly every non-public practice. If you wish to compare the public sector wages of police officers/firefighters to physicians, then we get closer, although the flat rate for physicians is still close to the $200k range. No field level police officer or firefighter really makes anything close without a lot of overtime, which is not generally computed as pensionable income.

    Relative worth of various jobs is a different discussion from market level pay considerations. Many physicians have had their educational expenses paid by their public employers, particularly those who have taken advantage of military education programs, so I’m not sure why you keep trying to make such a distinction.

    Are physicians more intelligent than most people? Certainly, in terms of their science aptitude. However, many physicians have a very limited ability to deal with people in the midst of real world problems. Does that make them unqualified for their service? Of course not, but comparing physicians salaries with other professions is far less about public service and more about the kind of people we tend to put on pedestals in our society.

  22. Tough Love says:

    Editor,

    Did you really expect SkippingDog to agree with you? He missed your whole point of comparing the Fireman’s TOTAL compensation (including the value of pensions and benefits) with the doctor’s total net compensation AFTER his/her myriad of business expenses.

    His response, and that of Charles just shows how difficult reform will be.

    Civil Servants get indoctrinated into the “entitlement mentality” very quickly. It’s as though it becomes part of their DNA. Convincing them that they are NOT entitled to so much more is akin beating your head against a brick wall. It’s impossible to convince them of this dire nature of the circumstances, let alone get them to agree to concessions sufficient to begin fixing the problem.

    My opinions and recommendations are direct and get to the point quickly without pussyfooting around. I realized long ago that any elected official that says changes should be “negotiated” or dealt with at the “bargaining table” cares more about maintaining Union support in the next election than real reform. VERY few have the stomach for the battle that will result from REAL reform efforts

    Former President Reagan had it right when dealing with the striking air traffic controllers. When it comes to pension/benefit reform, we need THAT kind of leadership.

  23. Rex The Wonder Dog! says:

    Funny how, whenever the rhetoric heats up, there’s some event like the most recent Chicago fire to remind us of exactly how the work of public employees,
    ==================

    More convienience store clerks are murdered every year working for minimum wage on graveyard shifts than all the deaths from cops and FF’s put together for the last 5 years combined (which BTW the vast majority of on the job cop/ff deaths are from traffic accidents).

    Same for construction.

  24. Rex The Wonder Dog! says:

    I needed to add one more comment. The US Supreme Court has ruled that Social Security is a joke. The Government has NO obligation to pay off.

    =========================

    Not true. But please feel free to cite the case.

    =============================

    Social Security benefits are not guaranteed.

    They are not guaranteed legally because workers have no contractual or property rights to any benefits whatsoever. In two landmark cases, Flemming v. Nestor and Helvering v. Davis, the U.S. Supreme Court ruled that Social Security taxes are not contributions or savings, but simply taxes, and that Social Security benefits are simply a government spending program
    =================
    Actually Charles-the two cases you have cited do NOT prove up your claim that SS was called a “joke” by the SCOTUS.

    Fleming stands for the fact that the Congress can “AMEND” SS. We all know this already Charles, Congress has raised the retirement age several times, to the current age of 67.

    Helvering just stands for the fact that the SS was a valid act, and is not an insurance program. That had nothing to do with you calling it a “joke”. I wonder if it is even valid law today since it is a 1937 case.

    All you need to read Charles is the 11th Amendment, states cannot be sued in either federal court or state court-they therefore can default on any obligation they wish-including ANY “contract”, and there is not a thing you or anyone else can do about it. That day is coming, simple math.

    You can’t have GED gov employees “retiring” at age 50 after just 30 short years of “service” with a $100K+, COLA indexed pension and living to age 86 (for women, 82 for men).

    If you think for one second your gov pension is safe I feel sorry for you, I really do.

  25. Rex The Wonder Dog! says:

    Don Levit

    These are exchange transactions, in which employees willingly took lower pay for constitutionally-guaranteed benefits.

    ========================
    Don, do we look like we just fell off the turnip truck?? Gov job pay AND compensation FAR EXCEED private sector pay (and even further for benefits) for the same work.

    Your claim was true in 1950, maybe 1960, it is not true today, and has not been true for at least the last 20 years.

    Here, this is for you Don;

    Government pay ahead of private industry
    By Dennis Cauchon, USA TODAY
    Updated 3/8/2010

    Government employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of government data finds.

    http://www.usatoday.com/news/nation/2010-03-04-federal-pay_N.htm

  26. Charles says:

    SS is unsustainable. It has been robbed of 2 and a half trillion dollars since Lyndon Johnson put its money in the general fund. There is no trust fund, only a bunch or worthless IOUs. I don’t want to put More money into it. I have already paid close to the max for 45 years.

    People who believe in SS should be the ones who need to worry.

  27. Charles says:

    Also, the California DPA has proven by their salary surveys that State Engineers still lag Private Engineers by 11% in total compensation. The DPA is governor Arnold and they certainly have no reason to make the numbers favorable to State Engineers. Also, USA today is only one small step above the reliability of weekly rags like the National Inquirer.

  28. Editor says:

    Charles: Social security is not unsustainable, though it will not remain solvent if we lower the rate of withholding – which apparently will occur in 2011. Did you read this post? Using rough numbers, here’s a summary of the averages, that’s AVERAGES, Charles, this isn’t about you:

    (1) Social security recipients work 40 years and spend 20 years retired. Public pension recipients work 30 years and spend 30 years retired.

    (2) The ratio of workers to retirees for social security is on track to be 2:1. The ratio of workers to retirees for public pensions is on track to be 1:1.

    (3) Social security recipients, on average, receive 1/3rd of their average earnings in the form of a social security benefit. Public pension recipients on average, receive 2/3rds of their average earnings in the form of a retirement pension benefit.

    (4) Public sector workers, on average, receive base salary that is 50% greater than private sector workers.

    For these reasons, total public sector pension benefits are projected to cost THE SAME AMOUNT OF MONEY per year as social security benefits for nearly six times as many people. The math is spelled out on the 3rd chart of this post. You think investing this money in the market makes up the difference. I do not. You think this is fair. I do not.

    One of the biggest canards in America today is that some sort of equivalency exists between the pension crisis and the social security challenges. They are night and day. Social security will always be solvent – barring incredible stupidity on the part of pandering, financially illiterate politicians – because on a pay-as-you-go basis, social security can remain solvent with relatively minimal, incremental changes to the rates of withholding and the level of benefits. Public sector pensions, on the other hand, are a financial obscenity, threatening to completely destroy our already fragile economy.

    As for your rates of compensation, Charles, again, this is not about you. Maybe some job classifications in the public sector are still at base pay rates below the private sector. This is not the case across the board. Not even close. And when you include the value of the benefits, which you must in any honest assessment of relative compensation, public sector employees are grossly overpaid relative to private sector workers. For California, here are the numbers, with references, once more:
    https://civicfinance.org/2010/12/09/calculating-public-employee-benefit-overhead/

  29. Tough Love says:

    ED,

    I told you … the “entitlement mentality” is deeply entrenched.

    You’ll NEVER change the thinking of Charles, SkippingDog, etc.

    That’s why a no-holds-barred/take-no-prisoners approach to effecting change is necessary. If you think otherwise, rumor has it that the disastrously ineffective snow cleanup in NYC is due to a Union slowdown in response to layoffs.

    President Reagan had the right idea.

  30. SkippingDog says:

    TL seems to forget that Reagan fired the air traffic controllers only after they left their jobs on an illegal strike. If you find any public employees, particularly public safety employees, who will go out on an illegal strike, feel entirely free to fire them and know that you’ll have my support. Unfortunately for you, it’s an extremely rare event.

    It’s neither illuminating nor correct to propose that the proper response to an illegal act is the proper response to people who are maintaining that the consideration they’ve been promised contractually and legally is binding.

    That’s not an “entitlement mentality;” it’s how business is conducted in a free society.

  31. Don Levit says:

    Editor wrote:
    Social Security will always be solvent.
    Could you elaborate on that?
    Are you part of the bunch of people who think that, due to a fiat currency, and the dollar being the world’s reserve, we can infinitely churn out dollars, with no consequences?
    Is the U.S. Government somehow immune to what has happened to other countries in the past, because we are God’s chosen nation?
    There are 2 things I know, Editor.
    There is a God, and it is not the U.S. Government!

    What you are saying, I believe, is that as long as the trust fund has a balance, that it has the authority to withdraw from the Treasury without an appropriation.
    But doing so is the same mechanics as paying for battleships – the dollars come from current revenues and debt.
    The trust fund makes it no easier to pay beneficiaries than without a trust fund, for the trust fund dollars have been lent to the Treasury, spent on current expenses, and (artificially) lowered the deficits.
    Even the U.S. Government can’t put the same dollars in 2 pots!
    I can provide third party governmental excerpts and links to back up my statements if anyone is interested.
    Don Levit

  32. Don Levit says:

    Rex:
    Those 2 Supreme Court cases do, indeed, state that Social Security is not a retirement/savings program, by which the government is contractually bound.
    That is because taxes and benefits are not directly related. Taxes pay for the general welfare, not for a particular benefit that one can say is his private property.
    Here are some excerpts and links:
    Flemming v. Nestor, 363 U.S. 603 (1960)
    “Each worker’s benefits, though flowing from the contributions he made to the national economy while actively employed are not dependent on the degree to which he was called upon to support the system by taxation. It is apparent that the noncontractual interest of an employee covered bv the Act cannot be soundly analogized to that of the holder of an annuity, whose right to benefits is bottomed on his contractual premium payments.”
    http://caselaw.lp.findlaw.com/scripts/printer_friendly.pl?page=us/363/603.html.

    U.S. Supreme Court Helvering v Davis, 301 U.S. 619 (1937)
    “The first section of this title (the Social Security Act) creates an account in the Treasury known as the Old-Age Reserve Account. No present appropriation, however, is made to that account.
    Not a dollar goes into the account by force of the challenged Act alone, unaided by Acts to follow.
    http://caselaw.lp.findlaw.com/scripts/printer_friendly.pl?page=us/301/619.html.
    Don Levit

  33. Editor says:

    Don: If you read additional posts here, you will certainly not come away with the impression that I am “part of the bunch of people who think that, due to a fiat currency, and the dollar being the world’s reserve, we can infinitely churn out dollars, with no consequences?” Try these:
    https://civicfinance.org/2010/12/18/national-debt-and-rates-of-return/
    https://civicfinance.org/2010/03/15/the-razors-edge-inflation-vs-deflation/

    My points about Social Security implicitly concede that the “trust fund” is somewhat of a fiction. The analysis here attempts to demonstrate, however, that on a pay-as-you-go basis, where current worker withholdings are used to fund current retiree benefits, social security does not face an inordinate financial challenge.

  34. Don Levit says:

    Editor:
    Current worker withholdings do pay beneficiaries.
    It is the surplus withholdings that have been spent over the years.
    Social Security doesn’t have unfunded liabilities, only in the sense the federal government considers only the current year’s benefits as a liability.
    In fact, the FASAB, the accounting advisor for the federal government, considers FICA and SECA taxes as non exchange transactions.
    Which means, that the citizens are compelled to pay the tax, yet the government, if it pays out benefits, is actually doing you a favor!
    I can provide excerpts and links to support these statements from reputable governmental web sites.
    Don Levit

  35. Don Levit says:

    Editor:
    Current worker withholdings do pay beneficiaries.
    It is the surplus withholdings that have been spent over the years.
    Social Security doesn\’t have unfunded liabilities, only in the sense the federal government considers only the current year\’s benefits as a liability.
    In fact, the FASAB, the accounting advisor for the federal government, considers FICA and SECA taxes as non exchange transactions.
    Which means, that the citizens are compelled to pay the tax, yet the government, if it pays out benefits, is actually doing you a favor!
    I can provide excerpts and links to support these statements from reputable governmental web sites.
    Don Levit

  36. Tough Love says:

    SkipingDog,

    Quoting from a discussion of the dire situation in Pittsburgh …

    “The mayor and the city council should have one master, the people of Pittsburgh, not the police and fire unions. Pittsburgh’s city council’s obligations to the city are to produce the most services for city residents at the least cost. Public unions provide the fewest services at the most cost. It is time to put an end to this widespread practice that threatens to bankrupt numerous cities in the country this year.”

    THIS is your mantra …. which needs to and will be changed. Obviously, with you and your ilk kicking and screaming.

  37. SkippingDog says:

    TL – Elected officials, in Pittsburgh or anywhere else, actually have a higher master than the people who elect them. It’s called the Constitution and the law, and it is what every elected official takes an oath to protect and defend when they take office. It’s nice to talk about “the people,” but our system was never designed to be a direct democracy, even in Pittsburgh.

    The Constitution protects contracts and prevents the imposition of ex post facto laws throughout our country, so Pittsburgh and other cities will just have to work through the problems they are facing in a legal manner, with the cooperation of their employees, and with the cooperation of the citizens they represent.

  38. Tough Love says:

    Quoting SkippingDog …”so Pittsburgh and other cities will just have to work through the problems they are facing in a legal manner, with the cooperation of their employees, and with the cooperation of the citizens they represent.”

    Hopefully (with the help of a bankruptcy judge, if that’s what it takes), the solution will include significantly reduced pay & benefits, and a hard freeze to the all pension plans … all with the goal of (a) matching expenses to revenue (with appropriate, but not unreasonable taxes), and (b) pension & benefits being no greater (as a % of pay) than that of the average Private sector taxpayer.

  39. Rex The Wonder Dog! says:

    Today’s CNN story about police officers killed in the line of duty. Something for Rex and TL to consider.

    http://www.cnn.com/2010/CRIME/12/29/us.law.enforcement.deaths/index.html?hpt=Sbin
    =========================

    Today’s story about convenience store clerk killed in the line of duty while working the grave yard shift for minimum wage, or about 1/10th of what a GED educated cop or FF get comped. And this story is repeated 20 times for every ONE time it happens to a cop or FF.

    Something for Skippy to consider.

    http://www.kctv5.com/news/26312439/detail.html

  40. Rex The Wonder Dog! says:

    States can repudiate their debts-in whole or in part. IL, CA, NJ and NY can and will do this in some form-there is simply not going to be any other choice (feds will not be bailing these states out-TARP like bailouts for irresponsible states are over).

    State subdivisions, local muni’s, can file CH 9 BK in federal court.

    It is going to be one big domino effect…… once the first few medium to large muni BK ‘s get filed-and get relief- all the rest will be lining up. Once that happens, and once we get the first gov public pension plan renegotiated in BK court, either by party stipulation or by the BK judge, the house of cards is going to come tumbling down on public union pensions. Haircut City!

    In fact once a handful of CH 9 BK’s completely shed or give partial haircuts to their public pension plans (and confirm public pensions are subject to federal jurisdiction in BK court) then there is not even going to be a need to file a CH 9 BK, just the THREAT of it is going to strike the fear of God into the public unions, and that alone will get them in line.

  41. Tough Love says:

    Rex, Although our goals …. of pension/benefit reductions “fair” (and affordable) to taxpayers … are similar, I doubt that Civil Servant Unions and members will “fall into line” easily. I believe we will follow the unfortunate pattern seen in Europe first … with massive strikes, battles, and likely some violence by very angry Civil Servants.

    And it will be much more difficult here, due to the myriad of differing State, county, city, and municipal Pension Plans well as separate Plans for Teachers, Policeman, etc.

    It’s going to be a HUGE and UGLY mess…… but unfortunately necessary … as the status quo will certainly bankrupt us.

  42. Rex The Wonder Dog! says:

    Change is coming TL, and soon, just like in Europe.

    I feel sorry for the gov employees who have modest pensions of $30K-$50K, becuase they too will be taking a haircut, at the expense really of the “public safety” pensions.

    Cops and ff’s are now making $100K+ in salary alone, why they pay nothing towards their own pensions is amazing, and a down right theft. Those making the most are the ones most able to fund their own pensions, yet in the upside down world of gov employment the ones making the most fund the least towards their pensions-zero.

    The state is currently contributing 44% of salary to the 3%@50 pensions (CHP & prison guards), in addition to whatever the employee portion is, usually 7%-9%. That total is well over 50% of salary just for the pension benefit-unheard of in the real world for private sector employees-and in the private sector GED jobs don’t have $100K salaries either.

    But the worst part-the contribution rates are still LOW, because CalTurds uses a 7.75% ROI discounted rate for their investment returns-that is about 30% TOO HIGH! They should be using 5%, or 5.5% maximum. For every 1 point of ROI loss the pension contribution needs to be jacked by 25%. 7.75%-5.5% is 2 full points, so the pension rates should be jacked by 50%, to over 100% of salary (44% state +9% employee + 50% for using unrealistic ROI of 7.75%= 103%). 105% pension contribution is what the real costs of a 3%@50 pension are today-could be more if CalTurds returns less than 5.5% ROI.

  43. SkippingDog says:

    The convenience store clerk murder is certainly a tragic crime, but it has no relationship to men and women who knowingly and intentionally risk and sometimes lose their lives on behalf of others. Comparing police officers and firefighters to store clerks, truck drivers, and roofers doesn’t take into account the essentially different nature of the tasks being performed, nor the commitment police and firefighters make to risk or even sacrifice their own lives in their duty to save another from harm.

    Although Rex doesn’t get this, most sane people do.

    As to Rex’s suggestion that municipalities use the threat of bankruptcy to roll their employees during contract negotiations, it clearly reflects his complete lack of understanding of the term “good faith,” and would severely undermine any trust that might be necessary to ensure effective public services.

    Rex and TL are perfect examples of why we need a strong and vigorous legal system to protect the contractual and statutory rights of public employees.

  44. Tough Love says:

    SkippingDog, As much as we need a “strong and vigorous legal system”, we also need a strong and viable financial system and growing economy. The excessive pensions and benefits currently granted to Civil Servants in ALL positions are at odds with that desirable goal … unless you feel ONLY Civil Servants are to be the beneficiaries of such growth.

    Today’s article addressing the situation in Mass. … and specifically the very modest and typical (but very ineffectiveness) reforms proposals … summed it up nicely …

    “Those changes were symbolically important, because they exposed the ways that powerful insiders had abused the system. But their effect on long-term pension finances will be relatively minor. The more serious financial concern isn’t the laughable excesses, but the regular benefits that far exceed the private sector.”

  45. Rex The Wonder Dog! says:

    The convenience store clerk murder is certainly a tragic crime, but it has no relationship to men and women who knowingly and intentionally risk and sometimes lose their lives on behalf of others. Comparing police officers and firefighters to store clerks, truck drivers, and roofers doesn’t take into account the essentially different nature of the tasks being performed, nor the commitment police and firefighters make to risk or even sacrifice their own lives in their duty to save another from harm.

    Although Rex doesn’t get this, most sane people do.

    ===================
    Skippy, you’re the one who doesn’t get it-your “hero” claims used to milk the system are over.

    You are no braver than the 7-11 clerk that died in the line of fire-neither are any of your cop “brothers”. You do NOT put your life on the line to protect others-you do a job where if faced with danger you do not engage. I understand that-safety is job #1. So please stop your spin. You’re no hero, you get paid very handsomely for doing a job that 1,000’s apply for, are qualified for, and would be willing to do for the compensation offered.

  46. Rex The Wonder Dog! says:

    Rex and TL are perfect examples of why we need a strong and vigorous legal system to protect the contractual and statutory rights of public employees.
    ==========================

    LOL..here it is AGAIN-the “but we have a contract” line.

    The “contract” you have that gave you 50% retroactive pension raises is not a contract because it is VOID. Elected officials have no legal authority (hence no contract) to raise pensions retroactively (decades) after the work has already been performed, under the ORIGINAL contract. I guess they forgot to teach you that in cop law school.

  47. Editor says:

    Skipping Dog: You’re right that police officer deaths in the line of duty do not directly compare to on the job deaths in civilian occupations – because police officers protect us, people taking risks in other occupations are not doing that. But there are two tough questions that have to be answered: (1) How much of a premium should police officers earn in return for bearing this risk, and (2) Should police officer unions, or any public sector unions, for that matter, be permitted to spend money on political activity.

    Focusing on question (1), how much of a premium is appropriate to pay police officers, requires taking a look at the actual degree of risk they assume. You’re right, 2010 had a higher than average number of police deaths in the line of duty in the U.S., as the article you reference states, 160 of them were killed last year:
    http://www.cnn.com/2010/CRIME/12/29/us.law.enforcement.deaths/index.html?hpt=Sbin

    To put this risk into perspective, according to the U.S. Bureau of Labor Statistics, in 2008 there were about 884,000 police and detectives in the U.S. (scroll halfway down to “Projections Data”):
    http://www.bls.gov/oco/ocos160.htm

    This means that last year, for every 100,000 police officers in service, 18 of them were killed. Now compare this to general mortality statistics in the United States from the Center for Disease Control:
    http://www.disastercenter.com/cdc/Table_9_2006.html

    As the table indicates, among people between the ages of 35 and 44, which is probably where the median age of a police officer falls, the chances that someone in that age group will die in any given year is 190 per 100,000. For people between the ages of 45 and 54, that number shoots up to 427 per 100,000. This means that a person between the ages of 35 and 44 who works as a police officer has a risk of death elevated by about 10% compared to the general population. A person between the ages of 45 and 54 who works as a police officer has a risk of death elevated by about 4% compared to the general population.

    This is not an insignificant increase in risk. Moreover, police officers may have a relatively low – between 4% and 10% – level of increased risk of death in normal times, but they live with the knowledge that there is always the possibility of a catastrophe where larger numbers of them will die protecting us. Clearly police deserve to make more money than people doing ordinary jobs requiring similar levels of skills and effort.

    One of the goals of this website is to move beyond the emotional arguments and try to assess the quantitative realities that need to govern policy decisions affecting the financial solvency of governments. There is no objective way to come up with a fair rate of compensation for police officers. Before discussing a fair number, moreover, it is necessary to determine how much they really make. Because I don’t believe CalPERS and other major public employee pension funds can deliver the returns they have in the past, the number I come up with – including estimates of what I believe are realistic current year funding requirements for future retirement pensions and health benefits – is much higher than the reported numbers. But I think they are more accurate. And despite the tragic fact that every few days, somewhere in America, a police officer dies in the line of duty, I don’t think that means we can afford to pay them, on average, over $200K per year. And that is what my calculations indicate are quite common in California:
    https://civicfinance.org/2010/12/01/why-california-is-bankrupt/
    https://civicfinance.org/2010/08/27/the-cost-of-firefighters/
    https://civicfinance.org/2010/06/17/the-price-of-public-safety/

    With great respect, I think it is important to remember that nobody forces anyone to become a police officer or firefighter. And I believe, as California’s incoming Governor Jerry Brown has even said, that the amounts that total compensation for public safety personnel are costing government budgets are too great for them to be excluded from discussions of pay and benefit cuts.

  48. Tough Love says:

    Dear Editor (and SkippingDog),

    To put this in financial perspective, assuming an officer or FF with the 90%@50 formula retires at age 55 with 30 years of service and with a pensionable salary of $125,000, the “value” of his pensions (meaning the cost to the Plan to purchase a guaranteed stream of future payments per Plan provisions) is $2.5-$3.0 Million.

    If significant reductions aren’t made (for CURRENT employees), many cities will wind up like Prichard Alabama…. with the funds running out and retirees losing their pensions.

  49. SkippingDog says:

    I certainly agree that the cost of public safety personnel should be part of our overall discussion about the proper role of government and how much we are collectively willing to pay for all such services. However, predictable comments like those from TL and Rex illustrate the lack of respect so often shown by too many on your side of the discussion. Perhaps when we are able to have a rational discussion about the qualitative differences in the type of services provided by public safety people with those in other vocations, it will give us a better ability to focus on your valid concerns.

    That’s never going to happen when your talking points devalue the service such people give by claiming “nobody forces anyone to become….” The same could be said for anyone serving the the armed forces, but you and your minions would never have the guts to actually come out and say or write such a thing.

    Until people on your side acknowledge that existing pension obligations are valid debts that must be paid, you shouldn’t expect any olive branches from me or anyone else who has spent three or four decades performing the often dangerous and frequently sordid kind of work public employees perform only to have you, Rex, and others openly ponder how you might finagle some kind of escape from your debt to us.

    That’s no more an entitlement than that of your mortgage holder or car finance company. It’s a debt you owe for services rendered. Once you acknowledge that fact, we may be able to move forward on other possible solutions to what we all agree is a problem. Otherwise, you’re no better than the person who runs out of a fine restaurant after dining without paying your bill.

  50. SkippingDog says:

    Rex — Once more you demonstrate your complete lack of understanding about how public pension plans are created, negotiated, and ultimately paid. Since oral arguments at the 2nd District are just a few weeks away, I’m not going to waste any more time trying to educate you — your mind is already made up and no facts, however valid or compelling, will change your stance.

    You regularly denigrate public safety personnel, so we all know where you stand. The good part is that most people aren’t like you.

  51. SkippingDog says:

    TL — Although Pritchard is Rex’s favorite city now, it would be helpful for you to acknowledge the unique circumstances of that city. Among others, this is the second time in only a decade that Pritchard has been in bankruptcy. The city has a “pay as you go” pension program funded in the general budget, and Pritchard, like many small working class towns, has seen a significant drop in both employment, growth, and its property tax base. With or without pensions, Pritchard was already a basket case with few options.

    When you get right down to it, Pritchard make Vallejo look like America’s best run city. Further comparisons, other than those using Pritchard as some theoretical municipal Hell, aren’t supported by any of the facts readily available. When you start using facts, applying them equally, and not merely cherry picking those that happen to support your position, you might begin to be taken more seriously.

  52. Tough Love says:

    SkippingDog, You said …”Until people on your side acknowledge that existing pension obligations are valid debts that must be paid ….”

    Lets follow this thought …. I have said many times that pensions already accrued for PAST service should be honored. acknowledging that this is “valid debt”. (Actually, I do not feel so for “retroactively granted” increases, but lets put that aside for the sake of this discussion.)

    What I strongly advocate for are reductions in pension accruals for FUTURE years of service for CURRENT employees. With the vast majority of salaries in the Public Sector now equal to or greater that those of comparable Private Sector jobs, FUTURE-year Public Sector pension accruals should not be greater than (as a % of pay) pension accrual granted Private Sector taxpayers.

    I have noticed that your responses carefully sidestep this specific distinction.

    Your thoughts ?

  53. Editor says:

    Skipping Dog: Truly defining these sides is an elusive goal, and minions are everywhere. Here’s something to consider: cities and counties should not be paying a crippling financial tribute to be gambled by Wall Street pension funds every month, but that’s what we’re doing. Looking at compensation, including pension payments, as a budget item where incoming cash collections pay all of these compensation costs, can be very helpful when evaluating how much taxpayers can truly sustain. Contracts are necessarily amended in bankruptcy courts, and that’s where we’re headed under the current system. Voters were never told what politicians were really signing up for in negotiations – and everyone was suckered by Wall Street wizards. Now we have a choice: We can continue to send money to investors to gamble with in large funds, or we can adopt pay-as-you-go budgeting and cash flow planning to our public entities. This issue, whether or not cities and counties should have to participate in these gigantic pension funds, or manage their own, much lower risk, lower return funds, with much lower management costs. These funds would be sustainable, but they would require across the board cuts to public sector levels of total compensation. The inspiring possibility is that if cuts to compensation were accompanied by deregulation in California, the cost of living itself would decline faster than the cuts in compensation.

  54. SkippingDog says:

    TL — As you well know by now, I am a retired law enforcement officer. During my career, I worked under at least four different pension plans, some better than others. Your concern with “retroactive” pension increases misstates the facts. A “retroactive” pension increase would have applied to people who were already retired and collecting a pension. That didn’t happen with 3@50 or any of the other programs we constantly discuss. What did happen is that existing employees negotiated improvements to their pension plans, which were approved by the many city councils, county boards of supervisors, and even the Governor of California as a component of lawful contract negotiations.

    Depending on the actuarial cost and the specific pension agency involved, those improved pension plans were “paid for” either through direct increases in employee contributions, decreases in other employment benefits (generally medical insurance plan payments), foregone salary increases in multiple year contracts, or some combination of all those things. Unless you understand these facts, you’ll never truly appreciate the level of resistance you or anyone else will receive if you attempt to change the conditions on a benefit that has long since been bought and paid for by the employees.

    As to continuing accrual of existing benefits for future years of service, I have no standing to speak for those who continue to work in public agencies. I know if I were still working, I would fight such an effort with all of the money, legal talent, and political influence at my disposal. As a former public manager, and a fairly senior one at that, I also recognize that the existing statutory and case law are not as clear on a reduction on the accrual of future benefits as they are on vested benefits. Therefore, that really becomes a political fight, rather than a finance decision, although the financials may influence the course of the politics.

    Your assertion that public sector pension accruals should not reflect a greater percentage of pay at retirement than those in the private sector is a public policy discussion that takes in far more than public safety employees. You can’t rationally make such an argument without including federal employees in the mix, including those in the military, and if “fairness” is truly your guiding light, it would have to be equally applied to any “private” organization that receives a significant amount of its funding from government contracts – think General Dynamics, Northrup-Grumman, Boeing, etc.

    That’s not really a pension argument. It’s an argument about “spreading the wealth” that seems to suggest you would be in favor of such a practice.

  55. SkippingDog says:

    Editor – If we believe pension programs are appropriate at all, there is no other way to fund them than through pooled investments involving some level of risk. That’s precisely what insurance companies do for any annuity, and it is how every successful pension fund is managed – public or private.

    If your real concern is in eliminating the risk to taxpayers, you will inevitably reach the conclusion that a pension program cannot be supported. But that’s not the decision we’ve made in our society. We’ve never taken the position that taxpayers should avoid all risk for the decisions made by their elected representatives, and we’ve certainly never made the decision to place the entire risk of retirement financing directly and solely on the shoulders of public employees.

    If cities and counties wish to withdraw from the shared risk pool provided by CalPERS and similar programs, they are free to end their contracts with that agency. Doing so does not remove the obligations they have for their vested and retired employees, and since CalPERS is a completely separate trust entity from the municipalities and is independent even from the state, a chapter 9 bankruptcy filing by the municipality will not affect the vested or retired members. The bankrupt city or county will gain some time to restructure their debt and perhaps an extended payment program for the funds they owe CalPERS or another pension trust, but they won’t be able to avoid the obligation itself. That’s one of the brilliant design features of our California pension plans, and a major reason no city or county in California can be accurately compared to Pritchard, Alabama.

    It is also not clear to me why all of your proposed solutions involve only cuts to public sector compensation. Why do you not include increases in some taxes as the other side of that correction? If we are truly in the dire straits you claim, and are all responsible for righting the financial ship, shouldn’t cuts in public employee salaries and benefits be accompanied by tax increases from those with means? Until that’s on the table, you’re not proposing shared pain but only pain to the people who provide public services.

    Finally, I don’t share the ideal of a libertarian utopia free of regulation that you seem to have. My experience tells me that locks keep honest people honest, and regulations are really social locks. In their absence, we have the kind of activity conducted by the Wall Street Wizards you cited earlier who have collectively stolen trillions of dollars from all of us and our heirs.

  56. Tough Love says:

    SkippingDog,

    (1) Perhaps I should have been clearer, but by “retroactively granted” increase, I meant exactly what happened … as you described. I consider them “retroactive increases”, meaning that the increased formulas were “retroactively applied” to service years in the PAST. By your calling them otherwise, you just trying to disguise the facts and huge financial consequences of this unjustified increase.

    (2) As far as reductions for FUTURE years of service, I’m a bit surprised at your candor considering that you (having already retired) would not be harmed by such changes. I would expect CURRENT workers to feel just as you do, quoting ..”I would fight such an effort with all of the money, legal talent, and political influence at my disposal.”

    It is exactly for this reason … I call it the uncompromising “entitlement mentality” … that I believe “negotiation” and the “bargaining table” will not even remotely result in pension reductions sufficient to put even a mild dent in the quickly approaching financial tsunami.

    This is why I believe changes must be forced upon CURRENT employees (even if by threat of massive outsourcing). We need massive expense reductions now and for years to come, and this is the ONLY way it can be accomplished.

  57. Editor says:

    Skipping Dog: None of my libertarian friends would ever consider me a libertarian. I don’t want to be able to buy marijuana at any corner liquor store, I believe Americans have to enforce their immigration laws, and I support the continuation of social security. No libertarian here. My rants about unregulated – or improperly and negligently regulated – Wall Street shenanigans provides recent documentation of my non-libertarian credentials. I think taxes to keep social security solvent is not a bad idea. At a 2-1 worker/retiree ratio, and a 2-1 years working to years retired ratio, paying out in retirement 1/3 of average earnings, social security only requires an employer-plus-employee contribution of 17% of salary. Social security withholding is already 12.5%. At a 1-1 worker/retiree ratio, and a 1-1 years working to years retired ratio, paying out in retirement 2/3 of average earnings, public sector pensions require an input of 66% of salary. Do you really think speculative investments on trillions of dollars in managed funds will throw off enough returns – decade after decade – to reduce that percentage? Currently only about 20% of salary is withheld to fund public pensions. A libertarian would let the river flow.

  58. SkippingDog says:

    TL –

    (1) IF your assessment were the correct one, please tell me how you would compensate me for the “opportunity costs” of my improved pension if you were successful in taking it away. Do I retroactively get the pay raises I would otherwise have received? If I can’t afford to be retired under the reduced benefit, do I get my old job back? What happens to the person who was promoted behind me? Do they get demoted or fired?

    (2) Every thinking person knows what a camel’s nose looks like when it pokes under the tent. My position is consistent with keeping the camel outside, not any uncompromising kind of “entitlement mentality.”

    I don’t personally have a problem with outsourcing many government services, but people inevitably become unhappy with those services when they no longer have a department head or elected official to hold responsible. Outsourcing is an excellent way to avoid responsibility. It also provides an impressive opportunity for old fashioned kick-back corruption and cronyism. It’s the antithesis of good government.

  59. Tough Love says:

    SkippingDog, Your 3-rd paragraph … quoted below for easy reference is interesting ..

    “If cities and counties wish to withdraw from the shared risk pool provided by CalPERS and similar programs, they are free to end their contracts with that agency. Doing so does not remove the obligations they have for their vested and retired employees, and since CalPERS is a completely separate trust entity from the municipalities and is independent even from the state, a chapter 9 bankruptcy filing by the municipality will not affect the vested or retired members. The bankrupt city or county will gain some time to restructure their debt and perhaps an extended payment program for the funds they owe CalPERS or another pension trust, but they won’t be able to avoid the obligation itself. That’s one of the brilliant design features of our California pension plans, and a major reason no city or county in California can be accurately compared to Pritchard, Alabama.”

    Logic would suggest that the debt a city owe’s Calpers would be subject to reduction/elimination just as are other creditor debts in a bankruptcy proceeding. The fact that CalPERS is a Trust distinct from the State, City, entity would seem to be irrelevant. What is the legal basis for your conclusion that a bankruptcy judge does not have such option at his/her disposal ?

    I realize it would likely be a “last resort” decision, but it does seem to be an available option. It is not impossible to surmise a situation where a city’s future cash flows (including provision for minimum basic services and excluding tax increase that would cause mass exodus) would preclude EVER being able to fund current pension debt.

  60. Rex The Wonder Dog! says:

    Focusing on question (1), how much of a premium is appropriate to pay police officers, requires taking a look at the actual degree of risk they assume. You’re right, 2010 had a higher than average number of police deaths in the line of duty in the U.S., as the article you reference states, 160 of them were killed last year:
    http://www.cnn.com/2010/CRIME/12/29/us.law.enforcement.deaths/index.html?hpt=Sbin

    =========================
    The vast majority of on the job cop deaths are from traffic accients, not violence. Thus making Skippy’s claim of danger/death from being shot or some other type of violence are even more perposterous.

  61. SkippingDog says:

    Editor –

    First, let me compliment you on the civil discussion I usually see on your site and the courtesy you show your posters.

    I think the answer to your last question really revolves around whether you believe we’ve suddenly become Japan and our last two years are reflective of a “new normal” in our financial circumstances, or whether you believe there will be a reversion to the mean and, over time, the S&P will continue to spin off about 10.25% per year, as it has since the 1920’s. If we’re now Japan, pension funding will be one of the smaller problems we have to grapple with over the next two decades. If we’re seeing a normal market fluctuation and correction, as many economists now seem to be saying we are, then yes, I think the funds will continue to throw off enough money to pay their obligations.

    If we recognize that the insurance industry really has the best actuarial assessment skills, as well as a long history of making a lot of money from pooled investment risks, we must also ask ourselves what those firms are doing to prepare for the future. They are investing in existing businesses, here and abroad, with a target of somewhere around 10% return per year. That kind of return is what has made most long standing insurance companies and their owners fabulously wealthy.

    Pension funds had an 8.25% return target that someone has decided was “impossible” without excessive risk, but even CalPERS has had returns exceeding 10% for the past year. If 8.25% will properly fund the pension obligations, and the insurance industry is able to achieve 10% returns with predictable regularity, why would you believe the pensions can’t be funded?

    Thanks again for the site. Happy New Year to all, but I’m calling it a night.

  62. Fake SkippingDog says:

    SkippingDog
    January 1, 2011 at 10:27 pm
    I certainly agree that the cost of public safety personnel should be part of our overall discussion about the proper role of government and how much we are collectively willing to pay for all such services. However, predictable comments like those from TL and Rex illustrate the lack of respect so often shown by too many on your side of the discussion.
    =======================
    It is not a lack of respect to point out the truth Skippy.

    Your claim that me or TL are doing anything other than pointing out facts is the same ruse all public unions use to cloud the issue in order change the subject from the pension scams to trying to paint the one who points the scams out as a “haters” or “illustrate the lack of respect so often shown”. Come on, get serious.

    This is no personal attack on you, you’re one of my favorite’s here!

  63. Rex The Wonder Dog! says:

    Sorry, for some reason my name keeps getting changed to the “Fake SkippingDog” when I post. I used that handle a few times in the past but it always posts by default here.

  64. SkippingDog says:

    TL – Governments don’t go out of business; they are perpetual. Chapter 9 requires a “work out plan” but has no provisions for a Chapter 7 type dissolution of debts.

    You’re probably correct that the obligations would be restructured, just as would bond payments for example, but that doesn’t mean they wouldn’t be paid. As the pension trust, CalPERS would continue to make payments to the retirees, even if the city were behind on its payments to CalPERS. The difference with pension funds is that they make decisions based on 20 to 40 year time horizons. Sometime within that period, the municipality would have completed its Chapter 9 work out and come current on its payment obligations, just as they would be required to do for any capital projects or leases that they continued during the pendency of the bankruptcy proceeding.

    As many others before me have noted, bankruptcy may be a valuable tool for debt reorganization, but it doesn’t create a clean slate for cities the same way a Chapter 7 proceeding would for a dissolving firm.

  65. Tough Love says:

    SkippingDog, responding to you 11:50 comment …

    In your (1), there is an implied assumption that they were SOMEWHAT EQUAL …. i.e., lower pay raises, etc. somewhat close in value to the enhanced pensions. On an individual-employee base that is CLEARLY not true since the officer who retired shortly after the change with a long career (AS MANY DID) got a huge bonanza. Even for the shorter service employee, I’d venture to guess that any “lost opportunity cost” via smaller pay increases pales in comparison to the increased value of the pension enhancement.

    Being from the Metro NYC area, when it come to discussions of outsourcing, I like to compare the TOTAL COMPENSATION of the typical bank teller with that of the NYC transit system token booth clerk. The latter has a total compension 2-3 times the former (and works in a bullet-proof booth … so there is little risk of harm). Who has the more responsible job ? No offense to token booth clerks, but the absurd salary differential is only due to the influence of the Unions. The free market should set compensation … even if the result is not a very attractive or livable wage … social welfare programs are purposed to address the latter.

  66. Rex The Wonder Dog! says:

    Pension funds had an 8.25% return target that someone has decided was “impossible” without excessive risk, but even CalPERS has had returns exceeding 10% for the past year.
    ======================
    CalTurds had a NEGATIVE 28% ROI in 2008. Two years in a row of that kind of “growth” and the system would go BK faster than you can say “retroactive pension increase”.

    Calturds ROI from 98-08-before the meltdown- was 2.41%. It has a funding ration of 47% . The fund is asking for unprecedented increases. CalSTRS is in even worse shape with a funding ration of 46%. Both funds are using “smoothing” techniques that are covering up the underfunding. Pension experts say funding levels below 80 percent place the long-term viability of pensions in jeopardy and are nearly impossible to overcome without massive borrowing, painful tax increases, cuts to benefits and increased contributions.

    Pensions with less than 80 percent of the assets needed to cover present and projected liabilities are considered “endangered,” while those below 65 percent are classified as “critical” under the Pension Protection Act of 2006.

    Your claims the fund is not a major problem and will cover itself by investment returns have been completely blown out of the water-and in fact the the same type of fraud CalTurds used when they claimed SB400 (3%@50) would not cost anything extra. Good government principles and common sense dictate that you cannot increase pensions by 50 percent, reduce the retirement age by five to 10 years, allow the pensions to be retroactive (SB 400 did All 3) and have them be sustainable. That is crazy talk.
    .
    .
    .
    .
    Pension funds had an 8.25% return target that someone has decided was “impossible” without excessive risk, but even CalPERS has had returns exceeding 10% for the past year. If 8.25% will properly fund the pension obligations, and the insurance industry is able to achieve 10% returns with predictable regularity, why would you believe the pensions can’t be funded?
    =============================
    ROI of 10%+ per year???? Are you crazy???? I know, maybe you’re speaking of AIG?? Please tell us which insurance company had 10% returns that made them “fabulously wealthy”.

    Please cite a source to this wild claim. Warren Buffet is the most successful investor in American history, and he does not even come close to that ROI.

    In May 2008, Federal Reserve Vice Chairman Donald Kohn delivered important remarks about an obscure but consequential issue:

    “Public pension benefits are essentially bulletproof promises to pay. The only appropriate way to calculate the present value of a very-low-risk liability is to use a very-low-risk discount rate. However, most public pension funds calculate the present value of their liabilities using the projected rate of return on the portfolio of assets as the discount rate. This practice makes little sense from an economic perspective [and] pushes the burden of financing today’s pension benefits onto future taxpayers, who will be called upon to fund the true cost of existing pension promises.”

  67. Rex The Wonder Dog! says:

    TL – Governments don’t go out of business; they are perpetual. Chapter 9 requires a “work out plan” but has no provisions for a Chapter 7 type dissolution of debts.

    You’re probably correct that the obligations would be restructured, just as would bond payments for example, but that doesn’t mean they wouldn’t be paid.
    =======================
    Your pensions would be paid a % of current value-no one ever said they would be wiped out completely.

    Pension haircuts are coming, you can take that to the BANK Skippy!

    Now I have to hurry up here – you are making me miss the AMC Three Stooges New Years day marathon!

  68. Keen Observer says:

    “A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers. The Manhattan Institute, which is not terribly sympathetic to unions, studied New Jersey and concluded that teachers earned wages roughly comparable to people in the private sector with a similar education.”

    See http://www.nytimes.com/2011/01/02/business/02showdown.html?hp

  69. Tough Love says:

    Keen Observer,

    And these studies (from California) have been shown to be seriously flawed …. primarily by including ONLY what California actually PAYS (cash) into it’s Pensions Plans … not the vastly HIGHER amount that is SHOULD BE contributing in order to fully fund these plans in some reasonable time frame.

    Ignoring the latter is such an obvious/gross flaw that most observers believe it to be intentional to support a foregone (and erroneous conclusion).

    ************
    But YOU knew that too … didn’t you ?

  70. Rex The Wonder Dog! says:

    Even if that is so, this battle comes woven with complications. Across the nation in the last two years, public workers have experienced furloughs and pay cuts. Local governments shed 212,000 jobs last year.
    ======================
    A furlough is NOT a “pay cut”, it is a forced vacation. No public employee in CA has received an actual pay cut.
    .
    .
    .

    A raft of recent studies found that public salaries, even with benefits included, are equivalent to or lag slightly behind those of private sector workers.
    ==============================
    There have been NO legit studies that prove public employees “lag behind” the private sector, the ONLY ones pushing that whopper lie are public unions, their members and their paid flunkies.

    Here is the truth for Not So Keen Observer, from the US gov statistics, not from public unions or their flunkies;

    Government pay ahead of private industry
    By Dennis Cauchon, USA TODAY
    Updated 3/8/2010

    Government employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of government data finds.
    http://www.usatoday.com/news/nation/2010-03-04-federal-pay_N.htm

  71. Keen Observer says:

    Rex,

    It’s great that YOU know the truth and what’s “legit” – at least if it fits with your opinions.

    Arrogant.

  72. Rex The Wonder Dog! says:

    Here’s just one example from Prudential Insurance. Their 3rd Quarter return on equity was 11.86% in 2010.
    ==========================
    Skippy-you did not say ONE QUARTER opf profits, you said, and I quote you now;

    “If 8.25% will properly fund the pension obligations, and the insurance industry is able to achieve 10% returns with predictable regularity, why would you believe the pensions can’t be funded?”

    One quarter is not “predictable regularity”. And if you look at the last 10 years, since CalTurds claimed SB400 (3%@50) would be cost free they were off base by a country mile.

    Oh, one other thing, you are once again claiming that because CalTurds is a seperate entity from the muni that filing BK will not affect them. A Chpt 9 BK is with the muni and their public employees-it has NOTHING to do with CalTurds at all.

    If the muni files BK and the BK judge adjusts the pensions-by giving them haircuts-then the muni has been relieved of the pension obligation-not in whole, but in part- be it 50% or 60% reductions, or whatever- the muni does not have to honor the pension. Contract or not.

    CalTurds has no relationship to the muni contract-none. They are simply the ones who hold and invest the money, if the BK Court says the muni does not have to pay pensions at 100 cents on the dollar then that is the law.

    So your claim that CalTurds is not affected by a Chpt 9 BK is sort of weird-they have nothing to do with it in the first place.

  73. Rex The Wonder Dog! says:

    Rex,

    It’s great that YOU know the truth and what’s “legit” – at least if it fits with your opinions.

    Arrogant.
    ===================
    Well, I did back my claim up with a legit reference, which you did not.

    And “Factcheck.org” or some front group for public pensions is not legit.

    Please, feel free to attack the U.S. Gov’s BLS, and then cite to your own study.

    Here, I will go one step further, please post a private sector job where a GED education and no prior work experience can get you compensated at $200K without o/t, and as high as $300K+++ with overtime-like an entry level, frontline CA. firefighter and cop jobs do.

    Janitors in the city of San Francisco make $60K in salary and almost as much in benefits- a $100K+ job for janitor. I bet if YOU go on craigslist right now you could find hundreds, maybe even thousands, or janitor jobs that comp that rate!!!!

    In fact, if gov ran McDonalds Corp. they would be comping their front line counter clerks $80K in salary and another $75K in bebefits!!!! Fry cookc even more!

    I hear those jobs are all over the real world. And that the streets are paved with gold, and that there is a pot of $$$$ at the end of every rainbow 🙂

    Yes, I am sure people will believe that gov jobs do not comp as much as private sector jobs do!!!!! I mean, if you said it-then it must be true!

  74. Editor says:

    Rex: You state “Here, I will go one step further, please post a private sector job where a GED education and no prior work experience can get you compensated at $200K without o/t, and as high as $300K+++ with overtime-like an entry level, frontline CA. firefighter and cop jobs do.”

    That is quite an assertion, but if you increase pension contributions to the levels necessary under reduced pension fund return projections, it is true.

    Whether or not pension funds can earn 8.0% or 4.0%, or real returns of 5.0% or 1.0%, is a really big question that will, depending on what one believes pension funds can earn, greatly affect whether or not one believes public employees are overcompensated.

    A related question of equal importance is whether or not it is in the interests of taxpayers, and the private sector in general, to have union-influenced pension funds controlling huge percentages of stock market value and stock market transactions.

  75. Charles says:

    Well at least I caught my limit of rainbow trout while I was away.

    Dear Rex

    “Calturds” over and over again.

    My mother once told me that the use of foul language was the attempt of small minds to make themselves forcefully heard.

    “Cal**** ROI from 98-08-before the meltdown- was 2.41%.

    How convenient. The ROI for Cal”pers” was 7.79% for the last twenty years against their goal of 7.79%. I think twenty years is a better example than picking out a short period of time that is convenient for your hypothesis.

    Calpers has been solvent since the 1930’s. And you want to take a snapshot of two or three years.

    If I pick the parameters I can prove anything.

  76. Charles says:

    Our esteemed editor said:

    “That is quite an assertion, but if you increase pension contributions to the levels necessary under reduced pension fund return projections, it is true”.

    But you can project anything.

    Do I think 7.75% ROI should be reduced? Yes, for now. But not to 4% in a “no-risk” scenario from green students at Harvard.

    If that was done, Calpers could demand huge increases in State and Local contributions and within a very few years Calpers would be bursting with funds and the media would be saying this is preposterous.

    On the other hand, if they used a high rate, say 10%, you would hear the same thing in reverse. They are cooking the books and blindsiding the taxpayer.

    On the other hand, if they make their best guess of 7.75% against the actual return of 7.79% for the last twenty years, including the meltdown, they are still wrong. So what, if anything, will please you???

  77. Editor says:

    Charles: Welcome back. If you are saying we need to examine many reputable sources of data and credible explanations and all relevant factors when making projections, I would agree. Here is the performance of the S&P 500 for the past 60 years. On the surface, these excellent tables depict the inflation-adjusted total return (including dividends) of 7.0% per year. But examine the data by decade – and consider the relevant factors in each decade:

    The Standard & Poor’s 500 Index
    Total Real Return Per Year

    1950’s, 15.6%
    1960’s, 5.2%
    1970’s, -1.4%
    1980’s, 11.6%
    1990’s, 14.7%
    2000’s, -3.4%

    (source for chart)
    http://www.simplestockinvesting.com/SP500-historical-real-total-returns.htm
    (explanation of S&P 500)
    http://www.fool.com/school/indices/sp500.htm

    Here are some factors affecting rates of return relevant to the high performing decades, 1950’s at 15%, the 1980’s at 12%, the 1990’s at 15%: The 1950’s were a period during which the United States manufacturing held an overwhelming lead over the rest of the world. Europe and Asia were recovering from the devastation of World War II. Our corporations were growing at unusually high rates during this decade because the United States economy faced virtually zero foreign competition.

    During the 1980’s and 1990’s America’s debt bubble began to grow. In 1980, the U.S. collective (consumer, commercial, and government) debt was a manageable 150% of total GDP. Today U.S. total debt of nearly $50 trillion dollars is equivalent to 370% of GDP and rising. The last time this occurred in the United States was in 1930.
    (ref. https://civicfinance.org/2010/12/18/national-debt-and-rates-of-return/ )

    Because the United States neither enjoys the manufacturing preeminence it had in the 1950’s, nor the nearly unlimited capacity to borrow against its assets and GDP it had in the 1980’s and 1990’s, I don’t think historical data suggests these funds are going to throw off a real return of 7.0% for the next 30 years.

    Also the demographic reality of more and more selling and less and less buying, as these fund mature in size and begin to make significant withdrawals to fund increasing numbers of retirees, will put downward pressure on the prices and hence the returns simply through the laws of supply and demand.

  78. Rex The Wonder Dog! says:

    “Calturds” over and over again.

    My mother once told me that the use of foul language was the attempt of small minds to make themselves forcefully heard.

    ========================

    LOL….Charles, why does it not amaze me that you would think “CalTurds” is “foul language” 🙂

    Thanks for the laugh, I needed it!

  79. Rex The Wonder Dog! says:

    How convenient. The ROI for Cal”pers” was 7.79% for the last twenty years against their goal of 7.79%. I think twenty years is a better example than picking out a short period of time that is convenient for your hypothesis.
    ============================
    I did not pick out a “time that is convenient for [my] hypothesis”.

    I used the time period of 1999 because that is when Cal”TURDS” said SB400 (aka 3%@50) would not cost anything to implement (and claimed that investment returns would cover the billions in added liability) to the present day, and how far off base that whopper claim was-and the fact that they did not disclose the billions in added liability should the ROI not meet the benchmark.

    2.41% is pretty far off the benchmark.

  80. Rex The Wonder Dog! says:

    Calpers has been solvent since the 1930′s.
    ============
    General Motors had been solvent since the 1900’s, same with Chrysler.

    So much for past performance, so much for the claim of being solvent since the 1930’s.

  81. Rex The Wonder Dog! says:

    On the other hand, if they used a high rate, say 10%, you would hear the same thing in reverse. They are cooking the books and blindsiding the taxpayer.

    =================
    4% rate is realistic, 10% is not, and there is no 10% year after year return for any pension fund in America-so your claim of using 10% is off base, and an obvious attempt to divert.

    Virtually the entire investment community says that 7.75% is not realistic, the only ones who say different are CalTurds and the ones milking the system from them.

    I think 4% is too low, 5%-5.5% MAX is what should be used in a period of economic meltdown that has no end in sight.

  82. oz says:

    Rex the wonder time waster said…

    “ROI of 10%+ per year???? Are you crazy???? I know, maybe you’re speaking of AIG?? Please tell us which insurance company had 10% returns that made them “fabulously wealthy”.

    Please cite a source to this wild claim. Warren Buffet is the most successful investor in American history, and he does not even come close to that ROI.”

    Rexie-

    Do you even bother to check your “facts” at all?

    Buffett has averaged in excess of 20% ROI for 44 years!
    Please stop wasting time with your fictionalized facts.

    http://www.berkshirehathaway.com/2009ar/2009ar.pdf
    (page 2)

  83. Charles says:

    Good evening
    Rex

    “4% rate is realistic, 10% is not”

    based on what? The last twenty years show an ROI for Cal***** of 7.79% over a projected 7.75%.

    You state the last twenty years cannot be assumed for the next twenty. I agree. This is all crystal ball stuff. No one can guess what will happen in 2030.

    You can only try to take past performance and project that into the future. I think Cal***** performance since the 1930’s is a better indicator than what has occurred since 2008. And they have already jumped back. A lot.

    This nation endured a horrible problem in the 1930’s. But just like this one which is not nearly as bad, it turned around.

    Cal****s can not plan on two or three years. Do you have any idea how many recessions California has had in the last forty years?

    I have lived through several of them as have many of our public and private citizens. Intelligent people are not shocked. Only brainless and clueless politicians.

    If you have had a long and productive summer, you still don’t plant tomatoes in November.

  84. Charles says:

    Good evening
    Rex

    \"4% rate is realistic, 10% is not\"

    based on what? The last twenty years show an ROI for Cal***** of 7.79% over a projected 7.75%.

    You state the last twenty years cannot be assumed for the next twenty. I agree. This is all crystal ball stuff. No one can guess what will happen in 2030.

    You can only try to take past performance and project that into the future. I think Cal***** performance since the 1930\’s is a better indicator than what has occurred since 2008. And they have already jumped back. A lot.

    This nation endured a horrible problem in the 1930\’s. But just like this one which is not nearly as bad, it turned around.

    Cal****s can not plan on two or three years. Do you have any idea how many recessions California has had in the last forty years?

    I have lived through several of them as have many of our public and private citizens. Intelligent people are not shocked. Only brainless and clueless politicians.

    If you have had a long and productive summer, you still don\’t plant tomatoes in November.

  85. Charles says:

    “Rex The Wonder Dog!
    January 2, 2011 at 8:15 pm
    Calpers has been solvent since the 1930′s.
    ============
    General Motors had been solvent since the 1900′s, same with Chrysler.

    So much for past performance, so much for the claim of being solvent since the 1930′s.”

    Please explain your logic here. “Same with Chrysler”?

    You must be getting tired. What does Chrysler have to do with the price of tea in China or the current discussion? Get some sleep.

  86. Charles says:

    \"Rex The Wonder Dog!
    January 2, 2011 at 8:15 pm
    Calpers has been solvent since the 1930′s.
    ============
    General Motors had been solvent since the 1900′s, same with Chrysler.

    So much for past performance, so much for the claim of being solvent since the 1930′s.\"

    Please explain your logic here. \"Same with Chrysler\"?

    You must be getting tired. What does Chrysler have to do with the price of tea in China or the current discussion? Get some sleep.

  87. Charles says:

    “I have lived through several of them as have many of our public and private citizens. Intelligent people are not shocked. Only brainless and clueless politicians.”

    I take part of the above statement back.

    I think politicians are fully aware of the results of their actions on American Citizens. They rely on ignorance to fill their pockets and those of their rich benefactors.

    Meanwhile John Q Public continues to tilt at windmills.

  88. Charles says:

    So what is going on here? You can quote a study that shows public employees make much more than private companies. And I can quote studies which show the opposite. Well, Golly Jeez there Bill, which one do we believe?

    You also state that it is unreasonable for a State employee to get more money in retirement than someone who only gets Social Security.

    Why? There is no logic here. When I went to work I was contractually bound to pay my share of SS and my retirement and now you want to cry “foul!” 40 years later. No one was complaining 10 or 20 or 30 or 40 years ago. Why start now?

    Where were any of you in 1969? Probably working for Santa Fe or some other private company with a good retirement, a Union shop and all the things many private workers do not have at this point in time. I had that exact choice. Santa Fe as an apprentice Fireman or the Division of Highways as an Engineering Aide I for $435 per month. People thought I was doing OK because they thought that was $4.35 an hour.

    Benefits have been robbed of by your private employers. Why do you think those things have gone away?

    Listen up. Because your employers decided when the economy was good to strip you of your benefits knowing this weeks paycheck was here and now and a retirement was off in the distant haze of the future.

    When I went to work for the State I always looked to the future.

    Whether you like it or not this is a Contract. It is not an “entitlement”. Social Security and Medicare are “entitlements.”

  89. Charles says:

    Tough Love
    December 29, 2010 at 12:24

    “And Charles ….. my career choice was extraordinary both in satisfaction and monetary rewards (far in excess of yours).”

    Incredible. With your ability to know how satisfied another person is with their job and how much they have made moneywise in the last 40 years perhaps you could write another book of the Bible.

    Revelation explained.

  90. Charles says:

    Tough Love
    December 29, 2010 at 12:24

    And Charles ….. my career choice was extraordinary both in satisfaction and monetary rewards (far in excess of yours).

    Incredible! With your ability to know how satisfied another person is with their job and how much they have made moneywise in the last 40 years perhaps you could write another book of the Bible.

    Revelation explained.

  91. Charles says:

    “Because the United States neither enjoys the manufacturing preeminence it had in the 1950′s, nor the nearly unlimited capacity to borrow against its assets and GDP it had in the 1980′s and 1990′s, I don’t think historical data suggests these funds are going to throw off a real return of 7.0% for the next 30 years.”

    Ed, I don’t disagree with you. I don’t know what will happen tomorrow, more less ten or twenty years from now. Anyone who insists the economy will get worse or better over the next decade should use their incredible talents at the racetrack. Why work when you know the future?

    The incredible economy of the 1950’s was not just good luck. The United States stayed out of World War I and World War II until the economies of Europe were destroyed. Coincidence? I don’t think so. You should read the letters between Churchill and Roosevelt leading up to Pearl Harbor.

  92. Charles says:

    TL
    “It is not impossible to surmise a situation where a city’s future cash flows (including provision for minimum basic services and excluding tax increase that would cause mass exodus) would preclude EVER being able to fund current pension debt.”

    I would imagine any Federal Judge looking at a bankruptcy would have to look at “bullet trains”, tax money spent for illegal aliens, “green energy”, the lack of a tax on oil extraction and a myriad of other things to inject into this equation against their legal obligations to their employees.

    If you go bankrupt, (I hope not) the Judge administrator will not give any credence to the fact you say you paid too much for you house or car or the interest on your credit cards.

  93. Charles says:

    TL
    \"It is not impossible to surmise a situation where a city’s future cash flows (including provision for minimum basic services and excluding tax increase that would cause mass exodus) would preclude EVER being able to fund current pension debt.\"

    I would imagine any Federal Judge looking at a bankruptcy would have to look at \"bullet trains\", tax money spent for illegal aliens, \"green energy\", the lack of a tax on oil extraction and a myriad of other things to inject into this equation against their legal obligations to their employees.

    If you go bankrupt, (I hope not) the Judge administrator will not give any credence to the fact you say you paid too much for you house or car or the interest on your credit cards.

  94. Charles says:

    TL
    “Being from the Metro NYC area, when it come to discussions of outsourcing, I like to compare the TOTAL COMPENSATION of the typical bank teller with that of the NYC transit system token booth clerk. The latter has a total compension 2-3 times the former (and works in a bullet-proof booth … so there is little risk of harm). Who has the more responsible job ? No offense to token booth clerks, but the absurd salary differential is only due to the influence of the Unions. The free market should set compensation … even if the result is not a very attractive or livable wage … social welfare programs are purposed to address the latter.”

    Then what you really need to do is get rid of Unions. Start a petition. SEIU in California manages to get next to nothing for their employees. In the last twenty years they have lost somewhere near 20% and 30% against background inflation.

    During the 70’s CSEA, which was not a Union and had no collective bargaining rights managed to get a 5% cost of living raise every year.

    The cost of living went up about 5% a year, almost like clockwork.

    If you wonder why it was so predictable, look to Uncle Sam. Rather than raise taxes, they had a stealth tax. Just print more money with nothing to back it up. The 5% inflation was the stealth tax. If you don’t believe me why can’t I own a printing press to make money?

  95. Charles says:

    Dearest Rex

    You know as well as I do that the term you keep using is for the purpose of denigrating an institution that has worked hard for their members and to keep State tax infusions to a minimum.

    “LOL….Charles, why does it not amaze me that you would think “CalTurds” is “foul language”

    Thanks for the laugh, I needed it!”

    He who laughs last, laughs best.

    Shakespeare

  96. Charles says:

    Dearest Rex

    You know as well as I do that the term you keep using is for the purpose of denigrating an institution that has worked hard for their members and to keep State tax infusions to a minimum.

    \"LOL….Charles, why does it not amaze me that you would think “CalTurds” is “foul language”

    Thanks for the laugh, I needed it!\"

    He who laughs last, laughs best.

    Shakespeare

  97. Tough Love says:

    Charles, I already had this discussion with SkippingDog, but would like to hear your thoughts …

    WHAT I SAID …..

    I have said many times that pensions already accrued for PAST service should be honored. acknowledging that this is “valid debt”. (Actually, I do not feel so for “retroactively granted” increases, but lets put that aside for the sake of this discussion.) What I strongly advocate for are reductions in pension accruals for FUTURE years of service for CURRENT employees. With the vast majority of salaries in the Public Sector now equal to or greater that those of comparable Private Sector jobs, FUTURE-year Public Sector pension accruals should not be greater than (as a % of pay) pension accrual granted Private Sector taxpayers. I have noticed that your responses carefully sidestep this specific distinction. Your thoughts ?

    HOW SkippingDog RESPONDED ….

    As to continuing accrual of existing benefits for future years of service, I have no standing to speak for those who continue to work in public agencies. I know if I were still working, I would fight such an effort with all of the money, legal talent, and political influence at my disposal.

    WHAT I WOULD LIKE YOUR THOUGHTS ON …

    Your situation is different, since a good portion of your career was during a period where cash salaries were lower that those of Private sector workers (so a larger pension to some extent is justified), but lets only look at those say employed for 15 years or less AND in positions where Public Sector CASH PAY (alone) is equal to or higher than their Private sector counterparts.

    For this group, and if you accept the fact that Public Sector pensions are at least 2x (likely 3+ times in California) greater in “value” upon retirement (due to richer formulas, earlier retirement ages with unreduced payout, inclusion of COLA provisions, etc.) than their Private Sector counterparts, would you feel it appropriate to reduce pension accruals for this group only for FUTURE years of service ?

    I would appreciate your thoughts … whether you feel it appropriate or not, and why you feel that way.
    ************************

    By the way, I’m NOT looking for a battle, I’m trying to understand why (perhaps beyond self-interest) so many Civil Servants think that they should continue to accrue (for FUTURE service) pensions so much greater than their Private sector counterparts when cash pay has been more or less equalized ?

  98. Tough Love says:

    Charles, I already had this discussion with SkippingDog, but would like to hear your thoughts …

    WHAT I SAID …..

    I have said many times that pensions already accrued for PAST service should be honored. acknowledging that this is “valid debt”. (Actually, I do not feel so for “retroactively granted” increases, but lets put that aside for the sake of this discussion.) What I strongly advocate for are reductions in pension accruals for FUTURE years of service for CURRENT employees. With the vast majority of salaries in the Public Sector now equal to or greater that those of comparable Private Sector jobs, FUTURE-year Public Sector pension accruals should not be greater than (as a % of pay) pension accrual granted Private Sector taxpayers. I have noticed that your responses carefully sidestep this specific distinction. Your thoughts ?

    HOW SkippingDog RESPONDED ….

    As to continuing accrual of existing benefits for future years of service, I have no standing to speak for those who continue to work in public agencies. I know if I were still working, I would fight such an effort with all of the money, legal talent, and political influence at my disposal.

    WHAT I WOULD LIKE YOUR THOUGHTS ON …

    Your situation is different, since a good portion of your career was during a period where cash salaries were lower that those of Private sector workers (so a larger pension to some extent is justified), but lets only look at those say employed for 15 years or less AND in positions where Public Sector CASH PAY (alone) is equal to or higher than their Private sector counterparts.

    For this group, and if you accept the fact that Public Sector pensions are at least 2x (likely 3+ times in California) greater in \"value\" upon retirement (due to richer formulas, earlier retirement ages with unreduced payout, inclusion of COLA provisions, etc.) than their Private Sector counterparts, would you feel it appropriate to reduce pension accruals for this group only for FUTURE years of service ?

    I would appreciate your thoughts … whether you feel it appropriate or not, and why you feel that way.
    ************************

    By the way, I\’m NOT looking for a battle, I\’m trying to understand why (perhaps beyond self-interest) so many Civil Servants think that they should continue to accrue (for FUTURE service) pensions so much greater than their Private sector counterparts when cash pay has been more or less equalized ?

  99. Tony says:

    Dear Editor: your article has a great deal of truth, but it completely ignores some very important truths as well.

    First, the amount of now-existing unfunded pension liability that states have to deal with is the result of 2 factors coming together: one was so-called finance professionals telling states for 20 years that an 8% (or better) return on investment was a reasonable long-term projection. The second was a series of political decisions to give in to state unions and employee groups to keep on increasing pension benefit promises. If states had been using a much more modest and reasonable 4% (more like 3% after inflation) return on investment projection, they would have realized that they needed very substantial annual contributions to fund their liabilities. At the same time, they would have realized that the repeated increases in benefits would be very costly, and they would have reined in at least some of them. The result would have been a sustainable pension system.

    Secondly, it is balderdash to claim that SS is sustainable, or nearly so. The SSA claims that the SS fund has money to pay benefits out to 2042 (and then it will run dry) are based on a chimera: the SS fund has a bunch of IOUs from the US Treasury. This is the same Treasury that now relies on at least 200 Billion per year from SS taxes to fund ordinary annual federal expenses. In 2018 when there ceases to be any SS surplus, the only way the Treasury will be able to replace that first 200 billion will be to increase taxes AND cut expenses to the screaming point – and that doesn’t even begin to make direct payout to SS. In 2020 through 2042, when SS requires the Treasury to pony up money to fulfill its IOUs, then taxes will have to be even higher. You may call that “solvent”, but I call it planning for civil war or revolution.

    I am a public sector employee, but I pay in to Social Security, and I expect to work until at least 70, maybe longer, and end with at least 45 years of service. The biggest mistake in the pension system (especially public but private as well) is in the very idea – a grotesque entitlement attitude – that suggests that people who are perfectly healthy and perfectly capable of working longer should expect to retire and live completely at ease merely because they have served 30 or 35 years. Most people who have put in 30-35 years on desk jobs are well able to work an additional 8-10 years. They should.

  100. Tough Love says:

    Tony,

    Your comments are very true.

    Let me add that the design of Public Sector pensions …. with UNREDUCED pensions at 60 (or 55, or even 50 and earlier for safety workers) combined with often 75+% of final salary and with annual COLA increases, has created a HUGE disincentive to continue working …… as they would be working for a VERY SMALL amount more than the could get (via a retiree pensions) for NOT working.

    Add to that the many opportunities for pension-receiving Civil Servants to take a second Public Sector position (the “double-dippers”) and the situation is even clearer.

    With the possible exception for Police & FF (where it should still be no less than age 60) Civil Servants should not be able to receive an unreduced (or below true actuarial-equivalent cost-adjusted) pension before the full Social Security retirement age … now 67 for most of us.

  101. Rex The Wonder Dog! says:

    Dearest Rex

    You know as well as I do that the term you keep using is for the purpose of denigrating an institution that has worked hard for their members and to keep State tax infusions to a minimum.

    ========================================
    Sorry Sir Charles, but when CalTurds-whose board of directors is dominated by self serving public employees, lies through their teeth by claiming retroactive benefit increases of 50%!! are 1) leagl, and 2) sustainable when they know they are not, they are NOT “an institution that has worked hard for their members”, but a fraudulent outfit not unlike the mafioso-only CalTurds is a million times more dangerous.

    Don’t blame me, blame your union and CalTurds for selling you and your fellow public employees down the river. Those losers belong in prison with the rest of the mafioso.

  102. Charles says:

    TL said:

    “I have said many times that pensions already accrued for PAST service should be honored. acknowledging that this is “valid debt”. (Actually, I do not feel so for “retroactively granted” increases, but lets put that aside for the sake of this discussion.) What I strongly advocate for are reductions in pension accruals for FUTURE years of service for CURRENT employees. With the vast majority of salaries in the Public Sector now equal to or greater that those of comparable Private Sector jobs, FUTURE-year Public Sector pension accruals should not be greater than (as a % of pay) pension accrual granted Private Sector taxpayers. I have noticed that your responses carefully sidestep this specific distinction. Your thoughts ?”

    Let me put one thing aside before I really begin. Retroactive increases in pensions. The only miscellaneous State employees I know of who cleaned up on that were persons who were going to retire anyway at age 55 in the year two thousand.

    Those persons did in fact get about a 30% to 33% increase as a “present.”

    55 was the magic number, if you were much older or younger than that at retirement it was a case of diminishing returns. At fifty or sixty-three there was no significant advantage. Of course you realize I am not talking FF or CHP here. Or billboard and milk inspectors.

    At 59 I gained about 17% because of AB400. Since I did in fact work for 10 years after AB400 was passed my gain was really more like 13%.

    If that 13% was taken away from me I wouldn’t like it but I am sure I would survive.

    “FUTURE-year Public Sector pension accruals should not be greater than (as a % of pay) pension accrual granted Private Sector taxpayers.”

    This is non sequitur reasoning. Making a statement that government employees should receive no more in retirement than private is one short step away from saying my next door neighbor should not get more salary than I do. To make it fair. What is fair? What any individual decides for himself.

    Now to the real question. Should public employees be entitled to a certain level of benefit for future years. I think that is something to be decided in contract negotiations or the courts.

    Arnold should have laid off 15% of the State workforce instead of having furloughs. He certainly had legal authority to do that.

    If you are laid off, as I was in 1976 for a year and a half you go out and get another job. You can’t reasonably be expected to get a job for the first, second and third Fridays per month, and you haven’t quite taken it in the shorts enough to get unemployment.

    Very clever, these Austrians.

    One thing I will agree with is that it is a problem that Unions pay into campaign funds for the persons who make decisions about wages and benefits. So what is the answer? Wall Street is allowed to do it and so are Corporations or anyone else described as a “special interest.” We are all of us special interests in one form or another.

    Should we eliminate collective bargaining for public employees? Go to the ballot box and do it if you can. Collective bargaining for the private sector has certainly been nearly eliminated, which is a major reason for the so-called class warfare being whipped up by the press.

    In short, I have no guaranteed answers to your questions.

    I think that public opinion will put enough pressure on politicians to get rid of the more egregious cases.

    Will public and private wages and benefits become more equal? Of course. The market place will take care of that.

    The wages and benefits of the private sector will go up and public will go down in the future just as surely as water flows downhill.

    Thank you for your time.

    Charles

  103. Rex The Wonder Dog! says:

    Then what you really need to do is get rid of Unions. Start a petition.
    ===========
    We don’t need to start a “petition”. Collective bargaining was not started by petition and it does not need to end by petition.

    We need to stop collective bargaining fopr PUBLIC unions-who operate in a manopoly, non free market. They can keep the union all they want, but the collective bargaining has to stop. Indiana, Virginia, North Carolina and a number of others states (Ohio soon) do NOT allow collective bargaining for public unions. There is no need for it-and it corrupts the contracts.

    I would bust all public union collective bargaining under the Sherman Anti-Trust Act.

  104. Rex The Wonder Dog! says:

    So what is going on here? You can quote a study that shows public employees make much more than private companies. And I can quote studies which show the opposite
    ===================
    LOL..no, you cannot quoate ANY study from a legit source that shows public employees are paid the same or less than the private sector-but please prove me wrong and post up a legit study from an un-interested 3rd party-like CHAPMAN, STANFORD, NORTHWESTERN or any other credible univerity.

    Didn’t think so.

    Just more spin from another public employee. Charles-that public employee whopper belongs right up there with the police and firewhiner whoppers that they deserve $5b million dollar pensions at age 50 because they “die 3 years after retiring”. LOL…we put the public empoloyee whoppers to rest here, and you have learned that first hand.

  105. Fake SkippingDog says:

    Rexie-

    Do you even bother to check your “facts” at all?

    Buffett has averaged in excess of 20% ROI for 44 years!
    Please stop wasting time with your fictionalized facts.

    http://www.berkshirehathaway.com/2009ar/2009ar.pdf
    (page 2)
    ==================
    LOL….I know some public employee would come here and point out the top investor in the world.

    #1) Warren B is NOT an “insurance” company, now is he!

    #2) Warren B has REPEATEDLY said his ROI going forward in this economy is not going to be anything near what it has been in the past.

    #3) Warren B is the top financial manager in the world.

    Stop the public employee spin, it won’t work on me. I am immune 🙂

  106. Rex The Wonder Dog! says:

    You can only try to take past performance and project that into the future. I think Cal***** performance since the 1930′s is a better indicator than what has occurred since 2008. And they have already jumped back. A lot.

    ===========================================

    WRONG-you can use many factors to estimate future growth, and you NEVER use PAST performance as the ONLY tool for future perfomance. Ridiculous comment from a public employee who does not understand investing.

    The 1930’s is a better indicator than what has occured recently???? Oh my, if that unsupported, off the wall comment does not show how your public employee mind works then nothing does.

    You are milking a system that is going under, trying to put your hand into the pocket of the poor and middle class who are already making far less, working far longer and have far fewer job protections, to fund your million dollar lifestyle on their backs.

    Sorry, your scam jig is up.

  107. Charles says:

    Rex The Wonder Dog! Does it again.

    “you NEVER use PAST performance as the ONLY tool for future perfomance. Ridiculous comment from a public employee who does not understand investing.”

    You immediately use the argument you claim I was using. I didn’t say that past performance was the only tool for future performance. Those words came out of your mouth. And I understood investing well enough to not get caught in the dot.com or the real estate fallout. Those should have been seen for the “unsustainable” investments that they were and I predicted both several years before the crash.

    “The 1930′s is a better indicator than what has occured recently????”

    Zowee! You get the prize for most taken out of context sentence. I did not say the 1930’s are a better indicator than what has occurred recently. Again, those word came out of YOUR mouth. I said that performance for Calt***s since the 1930’s (as in 70+ years) is a better indicator than two or three years.

    “You are milking a system that is going under”\

    Milking? How? Why did it take you 41 years to figure that out? If when I went to work in 1969 I had such a grab on the future as you claim I wouldn’t need a job or a retirement. I could just go down once or twice a month and bet on the ponies and never work.

  108. SkippingDog says:

    Hey, Happy New Year everyone! Nice to see all of you found a way to fill your time here while I was out celebrating and watching football for the past couple of days.

    Rex – You need to look a little more deeply at the Prudential financial report I posted for you. Pay particular attention to the return on assets sections in the body of the material. You’ll find they don’t support your notion that 5% is the top return available.

    TL — I noticed that you didn’t address my questions about the realities of unwinding the pension improvements, but merely concluded that I had recovered all of my opportunity costs already. You have no basis for such a conclusion, particularly since every agency that has implemented such an improvement in the past decade has paid for it in slightly different ways. I have to assume you haven’t considered those reasonable questions in your continued ranting about enhanced pensions, but you know full well that any judge would be obligated to do so.

    In the meantime, today is the first business day of the month so I’ll have to check my bank account and see how much CalPERS deposited last night. That way I’ll be able to pay my bills to various companies and people which, without my pension, wouldn’t be paid at all.

    Think about it.

  109. Charles says:

    Rex The Wonder Dog does it again.

    “I would bust all public union collective bargaining under the Sherman Anti-Trust Act.”

    Which has nothing to do with collective bargaining. The Sherman anti-trust act has nothing to do with this.

    You remind me of the old joke where the gangster says “Why is everyone against organized crime? Law enforcement is organized, ain’t it?”

  110. Tough Love says:

    Hello Skippy, and happy hew year. You said …

    “TL — I noticed that you didn’t address my questions about the realities of unwinding the pension improvements, but merely concluded that I had recovered all of my opportunity costs already. You have no basis for such a conclusion, particularly since every agency that has implemented such an improvement in the past decade has paid for it in slightly different ways. I have to assume you haven’t considered those reasonable questions in your continued ranting about enhanced pensions, but you know full well that any judge would be obligated to do so.”

    Ok lets address ….

    Your questions were:…”Do I retroactively get the pay raises I would otherwise have received? If I can’t afford to be retired under the reduced benefit, do I get my old job back? What happens to the person who was promoted behind me? Do they get demoted or fired?”

    I don’t know … certainly complicated issues and some of this may legitimate (e.g., were there REALLY lower pay raises … and what would have been the differential ?) .. I never claimed to have all the answers …. but a continuation of excessive pensions (because cash pay in the public sector has for quite some time been equal or better) is unjustified and clearly unfair to taxpayers.

    Your second point just blows me out of the water. You said, referring to what I call “retroactive increases” …”every agency that has implemented such an improvement in the past decade has paid for it in slightly different ways”.

    Do you really believe this … and if so with whose money ?

    Neither service nor contributions were rendered by the EMPLOYEES for these enhancements. Are you say that post-enhancement employee “givebacks” paid for it ?

    That’s patently absurd, and if you believe it, you must have a New Year’s hangover.

  111. Rex The Wonder Dog! says:

    Which has nothing to do with collective bargaining. The Sherman anti-trust act has nothing to do with this.

    =================
    Has everything to do with it. Pulbic unions are monopolies and should be busted, at the very least stripped of collective bargaining like Indiana and the other states have done.

  112. Rex The Wonder Dog! says:

    Your second point just blows me out of the water. You said, referring to what I call “retroactive increases” …”every agency that has implemented such an improvement in the past decade has paid for it in slightly different ways”.

    Do you really believe this … and if so with whose money ?

    Neither service nor contributions were rendered by the EMPLOYEES for these enhancements. Are you say that post-enhancement employee “givebacks” paid for it ?

    That’s patently absurd, and if you believe it, you must have a New Year’s hangover.
    =================
    Skippy needs to lay off the sauce 🙂

  113. Charles says:

    Tough Love
    January 3, 2011 at 3:23 pm said, in part “That’s patently absurd, and if you believe it, you must have a New Year’s hangover.”

    The last time I had a genuine wish I was dead hangover was in August of 1970. I went to the weekly party at the Colorado River by Needles, California for the every Wednesday all the hot dogs and all the hamburgers you could eat and all the sodas or beer you could drink for $3.00. Yes I know, that was a long, long time ago.

    I got my money’s worth and the next day it was 126 degrees in the shade. And there was no shade. So I spent the first couple of hours the next day on the pavement afraid I was going to die and the next couple of hours wishing I would die.

    Well, I can’t say I never did anything like that again, but I sure kept a reasonable distance from it.

  114. Charles says:

    Rex The Wonder Dog!
    January 3, 2011 at 3:58 pm
    Which has nothing to do with collective bargaining. The Sherman anti-trust act has nothing to do with this.

    =================
    Has everything to do with it. Pulbic unions are monopolies and should be busted, at the very least stripped of collective bargaining like Indiana and the other states have done.

    Fascinating! By your thinking process all Unions are monopolies, no one should be able to organize and we should go back to the early 1900’s when no blue collar worker could afford to own a home or a car or have medical treatment.

    You simply took your paycheck to the company store for last week’s debts and worked another week just to not starve to death.

    I bet even you don’t live under that, and no one should. Since Unions and Collective Bargaining are nearly defunct in the private sector you want everyone to go into the Zyklon B showers so we will all be equal?

  115. Tough Love says:

    Charles,

    Interesting story, but my hangover comment was directed (not to you, but) to SkippingDog in response to his completely absurd assertion that retroactive pensions increases were paid for by the agencies implementing them.

  116. Charles says:

    Anything a government worker receives is paid for by government taxes.

    Most workers I know of consider themselves to be custodians of public funds, especially on multimillion dollar contracts.

    Government employees with any brains know full well who is paying their salary. And they try to earn it.

    There is the occasional person who really does have the “entitlement” mindset. The are worked around, do not promote and are well known by their peers and real workers.

    And you can find them in private enterprise as well.

    I happen to be proud of my career. I can look back at it at any time and know I gave my best.

  117. Rex The Wonder Dog! says:

    Fascinating! By your thinking process all Unions are monopolies
    ==================
    Yes, that is true.

    All PUBLIC unions are monopolies.They do not comepte in the free and open market (when was the last time police services were allowed to be bid on by the privayte sector) and should be busted.

  118. Rex The Wonder Dog! says:

    Most workers I know of consider themselves to be custodians of public funds
    ===================

    Hahahahahahahha…..OMG-are you developing a Stand Up routine?????

    That statement is hilarious!!!!

  119. Charles says:

    Rex The Wonder (Brainless)Dog!
    January 3, 2011 at 8:07 pm
    Most workers I know of consider themselves to be custodians of public funds
    ===================

    “Hahahahahahahha…..OMG-are you developing a Stand Up routine?????

    That statement is hilarious!!!!”

    As Bugs Bunny once said, “What a maroon!”

    In my career I have been the custodian of literally almost one Billion dollars of public funds. No Contractor can say they got one dime they didn’t earn and no Contractor can ever say I cheated them out of one dime they deserved.
    So kick the slats out of your cradle as you laugh. Babies do that.

    Your comments show what you are made of.

    A vacuum.

  120. Editor says:

    Rex, Charles: Earlier this weekend I actually believed we had one of the best threads on this issue out there. Anyone who reads this post and all the comments will come away with a LOT of good information. When I read many of the comments on other sites that cover this topic – or any controversial topic – I get sickened by the constant personal attacks and pointless badinage. It is not futile to try to nurture a useful discussion, at least not here. I remember once, several years ago, trying as a commenter to reason with the editor of a very biased and pretty heavily trafficked blog – and yes, CIV FI has an editorial position too – the editor distorted my comments, selectively editing them to make them sound ridiculous, completely deleting others, while allowing other commenters who disagreed with mine to verbally beat me to a pulp. When I asked him to at least preserve my comments in their complete form so readers could at least review an accurate record of my reasoning and logic, he mocked me, stating it was his blog and he could do whatever he wanted. Well not here. Any viewpoint whatsoever is respected here. And while some light insults are tolerated and permitted, let’s not let them consume too many words, or go overboard in tone. Heck – on CIV FI, time permitting, this editor even corrects the spelling and grammar of comments. No matter whether I agree with them or not. The issues explored on this website are too serious for it to be just another forum for bellicosity. Comments on this post are closed, and thank you for creating what is a terrific resource for people who want to learn more. Please keep it up – you are all very informed on these issues and each of you offer important perspectives. Next round, without losing your edge or sense of humor, always remember why we’re here – to listen to reason and other points of view, and search for facts and solutions.

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