One more note. I’m not sure people understand how most public pension funds work, or how they are “guaranteed.” The pensions are NOT funded directly by tax dollars….
Most people don’t even understand that “taxpayers” do not directly fund pension benefits.[/quote]
This is 100% incorrect. Yes, the employees contribute to the pension fund but the “employer” in these arrangements is… the taxpayer.
To use a specific example, in 2011 San Diego County’s pension fund received $322 million in “employer contributions” (the employer is the County which is funded by tax receipts) and another $44 million in employee contributions.
So, here in San Diego – and in the vast majority of other US municipalities – taxpayers absolutely DIRECTLY fund pension benefits.
I’m somewhat baffled that you don’t know this.[/quote]
I didn’t word that correctly. What I meant is that they fund a portion of the **contributions** which are made well in advance of a person’s retirement. They do not directly fund the **benefits.**
IOW, there are many people out there (the majority, from what I can tell) who think that the employer writes the benefit checks every month. That is absolutely not the case. The pension funds are separate entities, and in the case of municipalities that contract with CalPERS or other major pension funds, they aren’t even controlled in any way by the govt entities that the employees work for.
The benefits are paid from the pension funds which are funded primarily by investment returns, then employer contributions, then employee contributions…in declining order. Now, the employee and employer contribution amounts will be the same. That also means that if the return assumptions turn out to be wrong, the **employees** will be carrying half of the burden of the unfunded liabilities. Nobody is talking about this.
BTW, the government agency is *funded* by the taxpayers/consumers of public goods and services; the taxpayers are not the employers of public workers any more than I am the employer of Walmart employees if I shop there.
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In your example above (using your numbers), the total employee and employer contributions total $366 million. The employee portion was $44 million. It will now be $183 million under Gov. Brown’s reforms. THAT is what I’m referring to when I say that the media did not adequately explain what Brown’s reforms have done. No big media push to explain any of the cuts that have been taken by govt workers. Nope, instead, we get to hear the loudest drumbeats when a single public employee in the entire state commits fraud (for which they’re being investigated…and under Brown’s reforms, they will lose ALL of their pension and other benefits if found guilty) or works a tremendous amount of overtime and gets an unusually large payout.
