[quote=bearishgurl][quote=briansd1]CA renter, I really don’t follow your logic. . . [/quote]
brian, part of this “topic” is that when pensions were “enhanced” at the City and County level here in SD, the employee contributions not only became mandatory but employees who were already contributing to the “system,” in addition to employees just beginning to contribute had 2-3x as much taken from their paychecks as “retirement contibutions” than under the old plan. The “Class C” employees (all forms of public safety workers) begin contributing at younger ages as their earliest eligible regular retirement age is set at 50 (instead of 55) and so the removal of 2-3x their previous contributions out of their paychecks hit them harder and younger.
Much of the money invested in a local public sector employee’s pension (percentage depends on age and retirement “tier”) is actually the employee’s own money with which they have no say on how it is invested.
That’s what a lot of the public doesn’t seem to understand. Beginning at age 45, these non-safety public employees under a newer “enhanced” retirement system also don’t have a choice as to how much is deducted and/or how much this contribution is raised every year (on their birthdays).
Employees who retired under an older, much less generous system and “tier,” such as myself, didn’t have to make these types of ever-growing contributions out of their paychecks.[/quote]
One way I believe they are going to “cover” some of the losses is by shifting larger portions of the contributions onto the employees. I believe there will come a time when they tell the employees that they will either need to contribute up to 25-35% of their salary, OR they will be able to roll their pension into a defined-contribution type of plan, if they don’t like the higher contribution requirements. Essentially, I’m anticipating a ~25-35% pay cut, both before and after retirement, for many public safety employees.
Again, the taxpayers will not be the ones suffering if this is done, and I haven’t seen any legal reason that would prevent them from shifting the contribution burdens. It will be interesting to see how this all shakes out.
