[quote=sdduuuude][quote=CA renter]No offense, but why do so many people continue with the lies about public sector workers not taking a hit? IMHO, many of them are going to see 10-35% pay cuts going forward. Some have already seen rather significant cuts already.[/quote]
Well, back to the original point someone made about defined contrib. vs. defined benefit.
If the public employees are taking a hit to boost their pension, then that is more like a defined contribution plan, which is a good thing. In a defined benefit plan, they wouldn’t take that hit – the state would have to.
So yes – some public employees may not be on a defined benefit plan.
This doesn’t mean I’m happy about the ones that are.[/quote]
No, they aren’t paying more to *boost* their pensions; the benefit amounts are determined by a fixed formula. They are paying higher contribution rates so that their employers (the taxpayers, according to some) will have to pay less.
I’ve tried to explain this so many times, but it seems I’m not explaining it well enough. TAXPAYERS DO NOT PAY THE BENEFIT PORTION OF THE PENSIONS. “Taxpayers” pay for the employer portion of the contributions, and the pension funds pay for the benefits — with the vast majority of that money coming from investment returns, not contributions from taxpayers.
Yes, the benefits are defined and guaranteed, but the contributions (including the ratio between employee/employer contributions) can change. It’s the *contribution amounts* that are the issue here, not the benefit amounts.
If the current contribution rates are determined to be inadequate based on investment returns, demographic changes, etc. (the “unfunded liabilities”), then the contribution rates have to go up to cover the difference. That’s where the bandied-about “tax increases” come in. What the MSM isn’t saying is that those increases *can* come from increased tax allocations/revenues, OR they can come from employee contributions, OR they can come from a combination of the two.
Perhaps I’ve not managed to explain it clearly enough, which is why we keep hearing the same tired lies over and over again. The pension funds have a fixed obligation to the employees. The contribution rates DO change, and THAT is what people are discussing during contract negotiations. The ***employees*** are being forced to increase their contribution rates. Those are public union ***employees*** who are often taking the hit for those increases, not just the employers. No, they are not token hits; and no, they do not just apply to younger employees.
