Could people living in cities simply say, no more. Let’s just have the city (county?/state?) file for bankruptcy and then, we can renegotiate and toss out these obscene pension contracts?
You keep reading that this or that pension can’t be changed no matter what and when push comes to shove, if you’re bankrupt, I don’t think there should be much choice in keeping some of these things where the folks involved were simply ripping off the community.
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Would it be simpler just to institute a very high local or state pension tax (whichever applies) to all local and state government pensions above a certain amount, and direct those tax dollars back to the municipality in question? That way, the municipality gets a bunch of revenue returned to it from its pensioners and there’s no need to file BK. Kind of an end run around the problem, although I don’t know if it’s practical. I’m betting that folks would vote for it if it went straight to the ballot.[/quote]
I could be wrong, but I am of the understanding that the unions grunts game the system too. The most common one would be the saving up of vacation/sick time and working overtime to boost the final years pay, which is what is used to calculate the pension. Or jumping jobs at the last second to boost pay, or holding two positions, or whatever. It happens and it is real money that is not what the original understanding was suppose to be.
I say they change the pension system to calculate what the pension payout SHOULD have been if they calculated it on your entire careers pay, and then just tax the hell out of the difference. Those 600k bell pensions would slip away, atleast for the police chief, as most of the career was spent as a 60k cop.
Only after something like this would I listen to a raise taxes argument. Deal with the fraud, graft, and ‘rule bending’ first, then we can talk about more money.[/quote]
DWCAP,
Trust me, they are already working on this, as they should.
BTW, pension benefits are based on an employee’s **base pay** for the last three years, IIRC. Overtime does not count, but changing positions/promotions will affect the calculation. They are working on extending the lookback period and/or taking an average over a longer period of time versus taking the highest pay in the most recent three years.
While I support DB pensions, in order to sustain these benefits, all the game-playing needs to be wrung out.
