Generational Battle Brews Over Gilded Baby-Boom Pensions
Generation X and Gen Y are getting fed up and might not take much more. That's what I'm hearing from a number of younger public employees who responded to my column last month on the incumbent employee conundrum. The gist of their feedback was this: They don't appreciate bearing the brunt of pay cuts and benefits reductions — the ones imposed by employers who try to balance the books on their pension and retiree medical plans by slashing compensation for younger employees and new hires. They'd like to see their elders share in the pain — or at least pay their share.
As I explained in that previous column, public managers are struggling to find ways to make their retirement plans sustainable. Typically, they start with the youngest workers first, not the people who caused the problem in the first place. Unfortunately, constitutions, statutes, court decisions and legal opinions often preclude rollbacks of unaffordable benefits awarded to Baby Boom retirees and near-retirees. In California, the state pension system makes it virtually impossible to change key benefits features (like the payout formula and multiplier) for incumbent employees in the CalPERS plan. In such states, the only way that public employers can reduce benefits is to target new hires. In others, the unvested younger workers can be impacted as well, but this occurs less frequently.
Senior public employees who are vested in the retirement plans with ten or more years of service tend to consider themselves untouchable. So if Baby Boomer benefits can't be cut, the conventional approach to benefit rollbacks is to "tier" the retirement plan with reductions for new hires. This line of thinking leaves the next generation to pay for the mistakes and delusional thinking the Baby Boom negotiators — on both sides of the collective bargaining table — have had in the past decade.
If you ask members of Generations X and Y how they feel about this generation gap in benefits, you get responses like those below, which are direct quotes from e-mails I have received from both public employees and readers in the private sector:
• "As a Gen-X'er, I have heard the same things since I entered the workforce: 1) You will make less than those who came before you. 2) Your benefit package will be less robust than those who came before you. 3) You will pay more for your lower-quality benefit package. 4) You will be required to work harder on more complex tasks than those who came before you."
• "Recall that there was once a reason for the unionization movement. History repeats itself….The pendulum swings the other way."
• "Every place I've ever worked, within 6 months to a year they've reduced the retirement packages and benefit options for the younger workers. Sometimes they've done that two or three times while I've worked there. Meanwhile, companies and municipalities go bankrupt because the previous generation had it great on the negotiated-benefit front. Kind of rife for a lot of resentment."
There's no question that public-sector retirement benefits need reform, and in many cases this will mean a rollback that trims the benefits for new hires — and thus younger workers — disproportionately. But unless the burdens are shared more equally, a backlash could start to brew. We'll likely see it first in union halls: Younger workers will demand more seats on the bargaining committees and reject contracts that fail to share burdens of benefits reform more fairly.
In today's weak economy, job candidates are more concerned about getting a paycheck than the long-term benefits. So regardless of this emotional issue, new hires will be stuck with the new wage-and-benefit covenants. But Baby Boom leaders should look in the mirror and realize that the burdens of fiscal responsibility must be shared.
In many cases, the most viable way to achieve intergenerational equity will be to bill incumbent workers for a higher share of their retirement benefits. To some, that will feel like a pay cut, but if elder workers' benefits are untouchable, then heftier payroll deductions may be the only option left.
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Pensions
I will be vested in 5 months and would have no problem paying extra into my pension plan, however, lets remember that the Boomer generation is and will continue to pay the lions share for the "Greatest Generations" entitlement programs, which will not be there for us. Also my generation has carried the greatest tax burden in US History, the most recessions and some of the ugliest political and finanial scandals with very high monetary cost. One thing more, we've also had to pay with our hard earned dollars and blood for some very expensive and unecessary wars. My point is that we aren't getting or looking for a free ride. We pay into the plans and the governments don't and when they do, it isn't what was agreed to. So before X & Y start planning to "overthrow" the union, they're going to have to earn their stripes......get to work on time and grow up.
58 and counting,
Ed Tavres
Feeding the horse to feed the birds
It's sad to see workers squabbling over their pay and pensions, while the root of the problem is that this economic system showers money on the rich and leaves the rest of us to fight over the rest. Reaganomics enabled the greatest transfer of wealth from the middle class to the rich in history, as detailed in a series of articles in the New York Times. The figures aren't in, but I suspect the Bush administration, following the mantra of less regulation must be good, effected another similar transfer, with the resulting near-collapse of our global economic system. The distribution of wealth in this country is more lopsided than anywhere on earth. The notion that taxing the rich will somehow stop them from "creating" wealth or is unjust is nonsense. One generally dies in the same economic category one is born in no matter how hard you work, with a few highly-publicized exceptions - just enough to maintain the illusion. You cannot "create" wealth, you can only accumulate it. Poverty is a by-product of wealth. I have no problem with people who are rich; like us, they have no control over which class they were born into, but I do have a problem with a system which makes some people so mind-bogglingly rich that neither they nor any of their descendants for generations to come ever have to lift a finger. I think it was Warren Buffet who said you should leave you kids enough money to do anything they want, but not so much they can afford to do nothing at all. Bill Gates understands this; he's giving his money away as fast as he can. Let's not punish the rich, let's just admit that this "trickle-down" idea is a fantasy. My ninety-year-mother, a lifelong republican, even calls it "feeding the horse to feed the birds", an allusion lost on the younger generations.
Nice attempt at a diversion
Nice attempt at a diversion. There are so many incorrect points in your paragraph above that it is almost not worth responding. As an example, here is a simple fact – the US is not the most wealth stratified country in the world. Google it and you will see. Yes, wealth income inequality has increased and this is not a good thing.
But let’s look at the last decade to see some of the reasons why this happened. Clearly, we were living through an inflated economy based on too low interest rates and cheap credit. The average wealthy person used this leverage to purchase more assets. The average non-wealthy person used cheap credit to live beyond their means and purchase things like new cars, big screen TVs and fancy vacations that they couldn’t afford on their normal income. Lower income people could have made similar decisions to invest to improve their wealth situation, but they didn’t.
I completely refute your point that we are a stratified society and that one is stuck in the class they were born in. I have found that this is an excuse for people to justify the position they are in and why it is not worth putting in the hard work to get ahead. For those of us who are willing to put in the hard work, good things do come. Take me as an example. I grew up in a very poor household as a child and had to live through the embarrassment and inconvenience of having our electricity and phone services turned off on a regular basis (plus many other things). I swore this would never happen to my children so I worked my ass off to put myself through college (including a graduate degree from an Ivy League school) and labored at a very difficult industry job for years to create the savings I would need to support my family and my retirement. America is still great for those who are willing to put in the effort and make the sacrifices.
Now I am faced with the prospect of higher taxes and reduced services to fund the early retirement of Baby Boomer government employees who are receiving pensions far beyond what they deserve. Like it or not with the increased government size path we are on, industrial production will continue to get crowded out so we are doomed to a low growth environment for years. Given this, we will not be able to afford what we have incorrectly promised to government pensioners and this will need to be restructured. It’s just mathematical reality.
But again nice attempt at a diversion ;-)
Interesting take. I'm just
Interesting take. I'm just curious....just what is the level at which you think government employees are receiving pensions far beyond what they deserve?
I took a government job to allow more time with my kids. The first year I intentionally took a 10K pay cut. My pension, when I retire, will amount to about $24K a year (minus $450 for health insurance each month and taxes).
Friends that stayed in private industry have lived well and if they saved, in a variety of savings instruments, including 401K's, have seen a nice payoff for those many hours they put in.
To me this is a life choice that we all make. There is pain no matter which way you choose, but I think you are painting an overly broad picture of the idea that government pensions are bloated.
Fixed Pie Fallacy
Wrong on multiple levels, but let's just address the most important one, the "Fallacy of the Fixed Size Economic Pie" which goes under many guises and names. Here you fall into it by stating the wealth cannot be created, which is obviously untrue otherwise there would be no explanation of the worldwide increase in living standards since the Industrial Age.
The increased living standards of everyone represent an increase in real terms of general wealth of all of humanity. Its due to overall increased productivity due to technology and the application of technology in a free market. The fact that someone has become more productive or enjoys a higher living standard due to technology does not take away from your share of the pie. Instead, the pie as whole increases and everyone benefits if the free market is allowed to apply the technology.
Economic Reality
As you seem to have an economic orientation, you'll appreciate this point. The larger the percent of GDP the government takes, the slower our economy grows. This is a mathematical fact with the extreme end point being a stagnant socialist economy.
The more our taxes are increased to pay for the current unsustainable pension programs, the slower the pie grows for all of us. For those who have studied the Great Depression, you will remember that the depression was prolonged because taxes were raised significantly mid way through it.
Again, I am amazed at all the convoluted logic that I hear from those who are receiving/about to receive unsustainable pensions to justify to themselves that what they are receiving is just.
The Problem is NOT that Boomers Have Pensions
The problem is defined-benefits (as opposed to defined-contributions) pension programs. They were/are not actuarially sound considering the increasing average life span. They were designed in a different era. Nobody should be able to retire after 20 to 30 years of service while having decades of productive life left unless they pay for their retirement themselves.
A quick solution would be to immediately reset retirement age first to 70 and then eventually to 90% of life expectancy. Or name a percentage. People need to provide for their own retirements, and defined-contribution plans are one way to do this. We need to retain productive people, no matter their age, in the workforce while supporting fewer retirees.
BTW, at 63, I am a leading-edge Boomer, and I recognize that things as they currently stand are not sustainable. Since the pension situation is not sustainable, it doesn't matter what the legal eagles say. The house of cards will fall nevertheless. We need less name calling and more effort toward a rational solution.
OK, then lets start seeing
OK, then lets start seeing some compromises from your generation. Everything I read says that soon to be/current pensioners want to maintain the same level of contribution (where the government picks up both the employer and employee portions), same early (50 or 55) retirement age, same ability to spike wages the last year of employment, etc. There has been zero collective recognition that the current system is not sustainable and is grossly unfair to future generations. All I continue to hear are reasons for why the current system is correct, fair and should be maintained even if it means increased taxes and reduced services to pay for it.
A critical mistake is to lump us into "my" generation vs "yours"
Generation X, there are a lot of worthwhile things you have to say, and there are quite a few things you have yet to learn. I, like you, grew up dirt poor; me as a country preacher's kid. I have had to scrap for and have earning absolutely everything I have, and due to greed and mismanagement and lack of economic understanding by those in power, I am at risk of losing it all; either by taxes or inflation or both.
We could certainly partner for a reasonable solution, but not when you polarize the situation by taking on generational "we vs. they" attitude. How bout lightening up and forming partnerships?
Fair Point but let's see some action from the other side
Fair point, but please recognize that my polarizing reaction and comments are due to the general response of pensioners to date - "leave my entitlement alone and look elsewhere for a solution". This is neither a fair nor equitable approach to solving the problem. Just look at the CA pension reform article today. The State employee unions are already gearing up for a $30m campaign to defeat this potential ballot initiative. Actions such as this are extremely polarizing and continue to demonstrate to me the myopic and greedy approach that current pensioners are taking with the challenge.
For everyone out there on the other side, ask yourself if it fair that my generation who will not have pensions ever in our life times (90% plus) or dramatically reduced ones for those lucky few will be forced to pay increased taxes to pay for yours? Assume that I am your child or grandchild. Is the current situation morally correct? I'd absolutely welcome a response and rational debate about this point.
pension
Read my posting. It was written for people just like you.
pension
Read my posting. It was written for people just like you.
The Problem is NOT that Boomers Have Pensions
The problem is defined-benefits (as opposed to defined-contributions) pension programs. They were/are not actuarially sound considering the increasing average life span. They were designed in a different era. Nobody should be able to retire after 20 to 30 years of service while having decades of productive life left unless they pay for their retirement themselves.
A quick solution would be to immediately reset retirement age first to 70 and then eventually to 90% of life expectancy. Or name a percentage. People need to provide for their own retirements, and defined-contribution plans are one way to do this. We need to retain productive people, no matter their age, in the workforce while supporting fewer retirees.
BTW, at 63, I am a leading-edge Boomer, and I recognize that things as they currently stand are not sustainable. Since the pension situation is not sustainable, it doesn't matter what the legal eagles say. The house of cards will fall nevertheless. We need less name calling and more effort toward a rational solution.
Sorry for the duplicate
Sorry for the duplicate post--was having trouble with Browser and didn't realize it had already posted.
It is simple. The debt
It is simple. The debt created to pay for the pensions will be paid for with the inflation; making the pensions worthless.
Not when pensions have COLAs
Not when pensions have COLAs the increase with inflation.... as do (just about all) Public Sector pension.
Wow! How did the approx. 10%
Wow! How did the approx. 10% Union membership become responsible for 100% of the Generational theft? I'm a Firefighter and feel I earn a fair wage and also deliver a valuable service to my community. I don't pay or receive Social Security, saving the City 7%. My Pension is my Retirement and it's a Benefit I earn Day by Day, not something that is gifted to me when I retire. The average Pension check in my system is about $2K a month, a livable amount with other private savings, but far from "Gilded". These Retirees don't put the money in a mattress or spend it jet setting, they use it to lead a decent and Independent life. These Retirees are spending money in a useful and productive way to stay off of Government assistance and create Jobs in the private sector. Ask Mr. Miller what his motivation is? Who writes his checks? Cities and Towns. That's fine, but Workers and Municipalities do have a vested interest in mutual prosperity, I want my City to thrive and at the same time earn a honest wage to support a Family that can be contributing members of Society. I saved well over a dozen People in my years on the Fire department, delivered many Babies, done CPR hundreds of times, and been exposed to more scumbag criminals than I care to remember. I love my Job and I thank the citizens for the opportunity. Fighting fires feels like getting beat up or being in a tough football game, and as I near 50 years old and thirty years on I can tell I'm nearing the end, it's a young persons job. Where is the clawbacks for the truly rich who have drained the wealth from our communities? The corporate raiders, the CEO's, the Masters of the Universe (Hedge funds and Private Equity)? Maybe even the Mutual Fund Execs? It would appear everyone's standard of living is going down in the USA except for the the top 1%. I'm prepared as Union Member to have a rational discussion about that and how we can work as partners in collaboration. dividing out one Group to be the boogey man is not productive. Why not point to the fact that these Benefits should have been fully funded as they were earned? We need reality not insults. Bringing everyone down to zero will not solve our problem or create a viable society for our Children. A rising tide lifts all ships, would it not be better for everyone to have a livable Pension after a lifetime of working rather than none? Thanks for reading, John
BS
Folks like you will continue to misrepresent facts to justify the largesse you are receiving or will receive. Thank goodness for the internet and the network of fact-based analysis that it enables to utterly refute the BS that people like you spew out.
Help me understand how much of your individual contributions to your pension the government picked up in addition to their own? Have you ever done an NPV on what you personally contributed vs. what you will receive post a retirement at age 50 (assuming you live to the expected age of 80)? I'd be willing to make a very large wager that you will take more out of the system than you contributed.
Don't look for pity for the hard life that firemen live and use this as justification for the need for early retirement - what a joke! If this is the case, why do so many individuals from fire departments get rehired as consultants after their retirement? Also, let's not overlook that fact that fire incidences have declined 80-90% over the past decades in most areas when adjusted for population increases. This is why you guys roll on so many unnecessary events - to justify your high-priced existence.
I look forward to bankruptcy at all levels - city, county, state and federal. With all this myopic greed that your generation continues to represent, this will be the only way out of this mess, as I don't expect any compromise from people like you.
balony
I find it quite disingenuous that you state ... The average Pension check in my system is about $2K a month.
I note your word "system". I'll bet that $2k/month average include workers that make WAY less than firemen. And I'll bet that $2K figure includes those that retired 25+ years ago.
Why not be more forthright and say what a typical current full career firefighter retiring TODAY gets as a monthly pension. I'll bet its real close to $10K per month. Oh, but if you stated it THIS way you wouldn't get the sympathy you're looking for ... would you ?
$10k/month .... Quite a bit more that what the citizenry that WILL FUND THIS gets .... don't you think ???????
Dream on Where do I sign
Dream on Where do I sign up....now that is a pension!
The only thing you erned was
The only thing you erned was a paycheck like most Americans. Your children and grandchildren will be paying for your retirement, it's nothing but a scam. Get rid of unions, gov workers, pensions for them or go broke all over the corrupt democratic states, glad i live in the south where unions don't control people like puppets, good luck to your state in bankruptsy.
I'm glad you live there too.
I'm glad you live there too. Judge and jury and not a lot of original thinking to try and solve a problem we all share in. Too much GLEN BECK!
The only thing you erned was
And apparently where the education system fails, at least, some of its students by not teaching them how to spell. "Earned" "Bankruptcy"
Government pensions, a scam?
The funding of pension plans has become a scam in some states, leaving future taxpayers holding the bag. When the pension plan in Kansas was benefitting from great returns from the stock market, the defined benetit pensioners didn't get any increased benefits. But, the Legislature ceased their matching contributions to the system for several years to fund tax cuts. Now that the stock market is no longer creating large returns, the pension fund is underfunded to meet future costs (just ignore the fact that when the stock market returns to previous levels the ability to meet those future demands will increase dramatically) the hue and cry is to change the bargain the government dictated to its employees. If Gen X and Y can get benefits for the Baby Boomers reduced because they don't think they are fair, Gen Z may completely cancel pensions for Gen X and Y when they want to spend those pension funds for their immediate desires. This is just another example of the increasing short-sighted, immediate gratification approach to decision making in this country. The Congress and Executive branches collaborate to prime the pump in bad economic times, based on Keynesian economics, but ignore Keynes instructions that the tax rates need to be held steady to build up surplusses and/or pay down the debt from the downturns in the cycle. Typical immature consume at someone else's expense attitudes and denial of any personal responsibility.
You just don't get it do you?
I continue to be amazed with all the distorted logic I read that tries to justify the current system that is essentially transferring wealth from future generations to the present "me first" Baby Boom generation. The above comments are a good example.
Do you realize that beyond government employees almost no one in the generations after the Baby Boomer generation have pensions? Even within the government, there is a trend for two-tier pension approaches that will short-change future generations. Future generations can have at it and try to gut my pension - because there isn't one.
The point I continue to make is that reality is that future generations will not have pensions or the ones they get will be significantly scaled back - a huge sacrifice we will be making. So it is time for current pensioners to start sharing in the sacrifice and start giving something back. But I'm not holding my breadth that the Me generation will come to this conclusion. They will continue to dream up distorted logic that justify in their own minds that what they are getting is fair and just.
pensions
So what is it that you are thinking....about how we should give back? Retirees I know that receive private pensions (examples: a for profit utility company, a paper mill, and of course good ol' GM) don't pay any health insurance costs while they get their monthly checks. Great deal if you can get it. Most government pensioners have substantial out of pocket health insurance costs to look forward to.
Government pensions, a scam?
The funding of pension plans has become a scam in some states, leaving future taxpayers holding the bag. When the pension plan in Kansas was benefitting from great returns from the stock market, the defined benetit pensioners didn't get any increased benefits. But, the Legislature ceased their matching contributions to the system for several years to fund tax cuts. Now that the stock market is no longer creating large returns, the pension fund is underfunded to meet future costs (just ignore the fact that when the stock market returns to previous levels the ability to meet those future demands will increase dramatically) the hue and cry is to change the bargain the government dictated to its employees. If Gen X and Y can get benefits for the Baby Boomers reduced because they don't think they are fair, Gen Z may completely cancel pensions for Gen X and Y when they want to spend those pension funds for their immediate desires. This is just another example of the increasing short-sighted, immediate gratification approach to decision making in this country. The Congress and Executive branches collaborate to prime the pump in bad economic times, based on Keynesian economics, but ignore Keynes instructions that the tax rates need to be held steady to build up surplusses and/or pay down the debt from the downturns in the cycle. Typical immature consume at someone else's expense attitudes and denial of any personal responsibility.
Now or later?
I'm also a Gen X-er, but I disagree with the vehemence of your statements. Pensions are not scams and your abuse of the firefighter in a previous post is unprofessional and uncalled for. There's no question that pension plans - like Social Security - are facing huge financial trouble. But imagine if you were a Boomer, in your 60s, and getting told that your benefits are going to be hugely slashed. What are you supposed to do? It may suck that we won't get the same benefits as the generation that precedes us - make that "defintely sucks" - but we're young enough and have enough working years ahead of us that we can adjust. If you're in your 60s or even your 50s, you don't have that flexibility. You accuse the Boomers of "entitlement" mentality, when they actually did the work and made their lives around what was promised to them 20-30 years ago (however faulty the logic was among leaders who made these arrangements). Sounds to me like you are a worse offender - you act as though you are entitled to the same benefits as the generation that preceded you. I'm vested in my state's pension plan, and if I get a dime out of it at retirement, that's gravy. I am making other plans. So would you rather get the news now, when you're young enough to plan ahead, or later, when your options are sorely limited? Taking care of the past generation is always the burden of the next generation.
Reply from a true Generation Xer
With your comments and attitudes stated above, I suspected that you are either 1) some masquerading as a Generation X person or 2) a government employee that is concerned about their pension. I see that it is the later.
It is interesting to note that people can commit moral crimes against society - like firemen spiking their incomes to increase their pensions - and yet you ask us to give them respect because of their position. In my book, respect is garnered by actions not position. And when you are consciously taking action to rip off the tax payer, you will get no respect from me.
"Taking care of the past generation is always the burden of the next generation" is an interesting statement you made. So I guess I can party like there is no tomorrow, buy a house bigger than I can afford, buy new cars every 3 years, take big fancy vacations, charge all this on my credit card or use my home equity line of credit, declare bankruptcy, and then expect the future generation to take care of me? I guess you don't believe in personal responsibility and the consequences that come with that? Clearly, you are part of the entitlement society that continues to play the victim and expects someone else to clean up the mess from your own decisions.
I have no issue assisting those who are truly in need and in fact do donate a significant amount of money and time to this, but I do have an issue bailing out people who have lived their lives in a financially irresponsible manner.
Again remember, there will be no pensions for my generation (I still don't buy you are a Generation Xer) and those after me. So you are asking me to get comfortable paying more out of my pocket to pay for the unaffordable pensions of others which means I will save less for my retirement? Fat chance. I don't expect anyone other than myself to pay for my retirement.
Thank you for your comments
Thank you for your comments especially the first line: "How did the approx. 10% Union membership become responsible for 100% of the Generational theft?" As a retiree with 35 years of service to the Commonwealth of PA I watched my friends earn 3 times more than us state employees but remembered that eventually my snail's growth pension would be there at the end of the race. So while I managed my resources effectively and prudently, I am to blame for the financial obligations of mismanaged entities.
I agree with above statement.
I agree with above statement. Also, I did'nt see any comment that some government employees and elected officials make less than their counterparts in the private sector so the good benefits help attract good people to these jobs.
Public pensions
Despite the rhetoric that public employees receive 'rich retirement packages' is simply not true. In most areas in California, public employees may receive multplier variables of 2% or 2.5% at 55 negotiated with management and approved by politicians. (It is interesting to note, that the counties that do have 2.5% at 55 also have furloughs.)
Despite having this opportunity, most of us continue to work. The wages we receive as public employees are comparable to jobs and the economy in the area. Only the benefits are better. Unless you worked your entire career with a public agency, most of us can expect anywhere from 30-60% of our salary upon retirement age at 67. Unlike public safety, most of us will be required to pay for our own healthcare as well.
The areas that are killing public entities which are causing melt downs are public safety unions, (police, fire, prison) most of which have 3% at 50. Although I admire the jobs they do, and understand that the physical demands of the job is wearing, 50 is still too young an age to retire at 60 - 75% of their pay. The amounts that public enities are paying for these particular pensions are harming the services non-safety public workers provide to the community.
One answer would be to retool retirement multipliers to newly hired public safety officers with fair legislation spacing their 3% over a period of 10 years e.g. 1% at 50, 2% at 55, 3% at 60. It won't solve everything at once, but it is a start.
By the way, union members are elected by their peers for bargaining teams and it takes two parties to agree to a negotiated settlement. Often what is bargained in negotiations for rank and file is normally received by management as well.
Yes it is true - public employees make more that private
Please check your facts - here is an excerpt from the Boston Globe. Public employees make almost twice what private employees do. And before you point out that this article references Federal employees, keep in mind that State employees often make more that Federal employees especially when you factor in their rich entitlement programs.
It it interesting to note how government employees will find the highest salaried people in private industry (CEOs, Wall Street, etc) to justifiy their own benefits while ignoring how the average American citizen lives which is well below what government pays.
Myth of the underpaid public employee
By Jeff Jacoby
Boston Globe Columnist
THOUGH it hasn't been true for years, many people believe that government
employees receive lavish employment and retirement benefits in order to
compensate for their meager paychecks. The reality is that their paychecks
aren't meager at all: Government jobs often pay more than those in the
private sector, and the difference between the two is growing.
Consider the lucrative lot of the men and women who work for Uncle Sam. In
2008, according to data from the Commerce Department's Bureau of Economic
Analysis, the 1.9 million civilian employees of the federal government
earned an average salary of $79,197. The average private employee, by
contrast, earned just $49,935. The difference between them came to more than
$29,000 - a differential that has more than doubled since 2000.
Take account of total compensation - wages plus benefits - and the disparity
is even more striking. In 2008, total federal civilian compensation averaged
$119,982 - more than twice the $59,908 in wages and benefits earned by the
average private-sector employee.
Here's my suggestion .... how
Here's my suggestion .... how about we LOWER all Gov't plan multiples to something more like what a Private Sector pension (for the lucky few that still have them) would pay ... that would be 1.0% to 1.5%.
YUP, your not misreading this. And its NOT that private sector pensions are ridiculously low, its that Public Sector pensions are ridiculously HIGH .... and Private Sector TAXPAYERS are suckered into paying for it.
Stay tuned to the revolt.
Corrupt pension plans, wake up people!
No more pensions, pay for your own retirements! Stop stealing from the future children of the country. Get rid of pensions everyone saves for their own retirements, like the people who don't work for unions and the government. Everyone puts in SS and pays for their own retirements, stop asking someone else to pay for your early retirement. Everyone retires at 65, unless you pay for it yourself. Nobody should retire early on the back of tax payers, you don't like it, don't do the job. Get rid of 90% of the firemen, 50% of the cops and most of all the other gov workers. Privatize everything over time, get rid of gov workers and the problems of some robbing others to retire early goes away. Volunteer FD's work great, we have one where we live, get rid of 90% of pay FD's in the country, now.
What a moron
What a moron
Perhaps hes a moron ... and
Perhaps hes a moron ... and perhaps you are a Pig.
Baby-boomer Pensions
and we baby-boomers lust after the security of home-ownership our parents had. Buying a home today is an adventure in insecurity. We baby boomers worked in years when our wages were virtually starvation level....like the late 60's when the minimum wage was about $1.55. I admit that costs have escalated but not as much as the minimum wage in these last 40 years. I am both an early-retiree and still employed full-time and my retirement pension after working for over 26 years for a city is less than 25% of what I was earning working full-time for that City. Its not so "gilded".
A little hint
The secret for wealth and security is pretty simple - spend less than you make. Something the Baby Boomer generation ignored.
They should not be called the
They should not be called the Baby Boomer generation but the greedy generation.
Not just in pensions, but that generation is robbing from the future for everything. Lets pollute all to no end and let the next gen figure out how to clean it. Lets spend money today like there is no tomorrow and let the kids of tomorrow deal with the bills.
There is no stewardship.
Not all greedy - some just frugal
I am an early retiree who worked in public health. My salary in my region averaged $20k per year less than my peers (Obviously, I don't work on either coast). I invested a substantial lump sum into my defined benefit retirement plan (equal to about 1/2 the cost of a house) on top of my monthly contribution and on top of my monthly contribution to other forms of savings (stock, bonds, mutual funds and 401K) and lived consistently below my means to save money so I could retire.
I am not part of a union (actually I think they have outlived their usefulness) but what I do see are the younger folks who came to work for us didn't care about benefits, they just wanted the most money in their pockets and to heck with the rest. The problem is when they reach my age, all that money they got and spent will be gone and who will support them? I agree, from what I read there are some pension plans that deserve to have the reset button pushed, but don't lump all of us in there. I would also say to all of you who complain, the government is run by people we elected. If you are so unhappy with what they are doing, vote them out. We the People hold the power, use it, don't just whine about it and don't pick on those of us who worked hard and sacrificed to acheive the American Dream.
For those who support defined contribution, how many people lost 50% of their investments? The value of a defined benefit plan is that, if you have a good plan manager, you have a larger amount of money to be invested over a longer period of time and thus can weather this storm. Anyone who follows the history of the economy can see that it has its peaks and valleys and after each recession what happens - the economy goes up. I guess we have forgotten the tremendous prosperity of the 90's after the Savings and Loan failures of the 80's - when you could buy a house here for $34K - and choose for three pages of them at that same price.
I think the greatest tragedy is that more companies don't offer a defined contribution plan that is managed properly and honestly and helps employees benefit from their years of hard work. The problem is that it detracts from the bottom line and just like the younger employees who came to work for us, it is all about what I have now. I hope they have the wisdom to see that it is all about finding a balance between what I want now and what I need when I am older.
You can trust that I am more
You can trust that I am more than words and my actions speak louder than my words ... But the issue we have today is that the majority who likes to vote in populist candidates are also the same majority who pay little or no income taxes. It is easy to maintain unsustainable programs when you are not paying for them.
And my issue is not with people like you who have worked hard, sacrificed, saved and prepared for their futures. But you do have to admit that you are in the minority - the macro facts speak for themselves. I continue to be amazed that with all the asset appreciation (houses, stock market, etc.) the Baby Boomers benefited from (prior to this crash), how ill-prepared the majority of them are for retirement. Just astounding.
I agree with you regarding the short-term orientation of many of the younger generations. I guess they learned well from their parents. I'm not one for excuses and I don't intend this to be one for those who refuse to take charge of their futures. But have you looked recently how spoiled and materially oriented children of Baby Boomers are? I continue to contend with this with my own children and explain to them why they don't get all the material goods they see other kids getting. Thank goodness my kids are beginning to be able to look past material orientation.
It is going to be very interesting times when the Baby Boomers continue to demand entitlement benefits and their children want increased services from government. Being stuck in the middle, I will watch with interest and do what I legally can to shield my hard-earned income from the coming tax onslaught.