Explorations in Policing, Faith and Life (With a hint of humor, product reviews, news and whatever catches my attention)

Sunday, March 20, 2011

Some Public Pension Thoughts-from one who is going to receive one.

I have been following all the news concerning the efforts of pension reform throughout the Midwest (Wisconsin's attempting to end collective bargaining)( Indiana's attempt to do the same)(Illinois moving to end the pension process with current benefits locked in place and future investment in a 401k type program) and as is typical with the modern American press I am not hearing a number of facts/elements that need to be interjected into this national debate.  The only coverage seems to be in support of the idiotic vitriol from either the right or the left. Here is a quick bullet point list of elements that should be considered in this debate.

  • For the City that I work for, the pension obligation for Police/Fire/Public Works/City Employees is the single biggest budget item. Last I checked over 35% of the cities tax base/operating capital is spent on pensions.

  • All public pensions were negotiated in public and signed off by duly elected officials.  Every union contract is on file and obtainable by any citizen, further all pension provisions/benefits are also publicly disclosed.  There are no secretes here...where has everyone been for the last twenty years?  The public/tax payer was fully represented by the official they elected.

  • The real problem with pensions is not their insolvency or undue burden on the taxpayer but rather on the total corruption of the politicians that did not fully fund them (right and left).  Had the proper payments been maintained, rather then used for other purposes, there would not been a pension problem right now at all.  I find it interesting that after years of political mismanagement and under payment into the funds the demonetization is not on the politicians that created the problem but rather on the workers that had the governments promise broken.  I keep hearing that we do not need to look into the past but rather reform them now.  Question:  if you cut my benefits now and have not fixed the funneling out of the funds in underpayment or misappropriations, are you not going to come back to me in ten years and ask for more? 

  • Most, more than 90%, of all public employees pay into their pensions, in my case 9%.  That is 9% of my gross income, the average American saves less than 6% of their NET income.  (Link source of data http://www.bea.gov/briefrm/saving.htm).  Bottom line?  I am paying much more for my retirement than you are.

  • I do not get social security.  I am one of the lucky ones in that I do not have to pay into social security either but the vast majority of public pensions employees pay into the fund.  At retirement the Social Security benefit is subtracted from the pension payment and if the number is above zero than that is the social security benefit for the employee.  That number is never above zero.  So public pensions employees are paying an extra 7% for everyone else to have social security.

  • The city I work for has on every contract claimed they are out of money and can not provide us with any percentage salary raise or increased benefits package.  Yet in the end they have always paid us and been in the black.  The city is attempting to lower our salaries and benefit packages and participate in a greater movement to lower all public pensions but it still has funds in the budget to pay for Christmas lights along our main street and fireworks on the fourth of July.  It is not an argument of lack of funds it truly is an argument of preference for the use of funds.  You want to convince us that you need to lower my quality of retirement permanently?  Then cut all discretionary spending and then show me your still in financial jeopardy, but as long as I go into the station and see coloring book handouts, newsletters, bicycle days, softball festivals and the like I know you really do still have money for my current pension.
  • When I decided to pursue my current vocation as a Law Enforcement Officer one of the major decisions points was the guarantee retirement provision that the pension offered me.  I had a number of my college buddies call me when the economy was booming and offer me a job over at their company.  The suggestion, well statement, they kept saying was I was a fool to work for a stupid little salary when there was so much money to be made so quickly.  Later, when the wheels came off the economy and their investments had tanked and they were let go, my stupid little salary looked awesome.  Bottom line: in a good economy my job looks like crap in a bad economy my job looks golden.
  • I have a master's degree, no discipline in my personnel file, I have never been successfully sued, I have given more money back to my department as a result of my job related actions than I have ever cost the department.  If plans continue to move forward where they would retire my pension and replace it going forward with a 401k program, I would have to re-evaluate my current employment.  Even right now in the private sector I could obtain employment in the private sector at a salary higher than my current one from my department.  But over all, however, with the pension in consideration it is a better situation for me if I stay.  The bottom line: do you want your Officer to be in that squad because he/she wants to be there and has passed by opportunities in the private sector or someone that had no where else to go.

  • I have to admit I always found it un-democratic, in that when I joined the force I was forced to join our union, I did not have a choice.  If the union was such a good deal for the police employee wouldn't I just join because it was the smart thing to do, why was that decision taken away from me?

  • Finally for this posting, one of the realizations that was made in the early modern era of Law Enforcement was that there is a indirect ratio between salary and corruption.  The higher the salary the less the corruption.  Conversely, the lower the salary the higher the corruption.  It is a little like the speed limit, in which the calculation is made for safety verses travel time.  If everyone drove at 5mph then few, if any crashes would be fatal but it would be faster to take a horse to get around town.  However if you go 200mph you get everywhere quick but most crashes would be fatal.  I have not seen this decision tree been discussed so far in this debate. 
Just some thoughts...probably will have a few more some time soon.  Gets you thinking when you starting imaging the future and you see your retirement home moving form San Diego and heading to Detroit.

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