OT: Untouchable Pensions May Be Tested in California

[Coronita]

Here we go again….

Weekly report #5 will be interesting! 🙂

[bearishgurl]

[quote=flu]Here we go again….[/quote]

Funny, I was just saying this same thing to Piggs in pm. Same tired old subject. Same ignoramus comments stemming from trash-talk put out by “MSM pundits” located in NYC!

Go figure ….

The Piggs need a CA “civics lesson” here…..

[ucodegen]

[quote bearishgurl]Instead, they use the currently unemployed and underemployed “over 55 group” to work as part-part-timers and “consultants” (who receive Form 1099 instead of a W-2 form for the tax year). The over-55 “consultant” or “contract worker” needs 3-4 regular gigs to “eek out a living” from their home offices.[/quote]Speak for yourself… I think it depends upon the need for the consultant. Some are doing quite well. Others…? The other thing is that as a consultant working out of home, you can deduct a lot. This is also speaking from experience. I was an ‘older’ person laid off in 2008.. currently working as a consultant.

[briansd1]

BG, say you’re correct about older, but still young workers. But it’s no reason for taxpayers to pay generous retirements for public employees when that kind of lifestyle is not sustainable in the general economy.

Those people can keep on working in their existing positions. Seems like a good reason to raise the retirement age.

[GH]

The answer in part would appear simple. based on projections regarding life span over the past 100 years and known retirement age and increase of medical insurance over the same time and force the employer to pay 100% of the cost AT THE TIME of pay into a fund. The fund should NOT engage in ANY form of gaming (Stocks etc) and should invest 100% into US treasuries. Thus if a policeman is paid $1500 for a weeks work and the retirement contribution for this week is $2500 the municipality would IMMEDIATELY pay the worker and the $2500 into the retirement fund.

I am all but certain this is not what most municipalities intended…

[sdduuuude]

[quote=bearishgurl][quote=flu]Here we go again….[/quote]

Funny, I was just saying this same thing to Piggs in pm. Same tired old subject. Same ignoramus comments stemming from trash-talk put out by “MSM pundits” located in NYC!

Go figure ….

The Piggs need a CA “civics lesson” here…..[/quote]

FLU knows all about Asian cars. He can tell you whatever you need to know about Civics.

[The-Shoveler]

Now only if the States could print their own money, Just kidding,

Did I hear someone say inflation?

[CA renter]

[quote=bobby]Bearishgirl,
one counter point to your argument is that almost everyone is employable at the right wage. maybe those 55-65 y/o don’t want to accept a wage appropriate to their skill level?
If I can hire a 30 y/o with similar skill level for 30% less salary and benefits, I, as a employer with a bottom line, would be foolish to hire someone who ask for much higher salary, whatever their age may be.[/quote]

FWIW, I’ve worked with much younger employees and with older, experienced employees. From everything I’ve ever seen (in a variety of industries), the older workers are, in general, not only more efficient and knowledgeable, but also have far superior work habits. You get what you pay for.

[CA renter]

[quote=pri_dk]There are some signs of progress, but still not enough to resolve the core issue:

http://gov.ca.gov/docs/Twelve_Point_Pension_Reform_10.27.11.pdf

A good read. I found this part particularly interesting:

Over time, enriched retirement formulas have allowed employees to retire at ever-earlier ages. Many non-safety employees may now retire at age 55, and many safety employees may retire at age 50, with full retirement benefits. As a consequence, employers have been required to pay for benefits over longer and longer periods of time.

The retirement age for non-safety workers in 1932, when the state created its retirement system, was 65. The retirement age for a state highway patrol officer in 1935 was 60. The life expectancy of a twenty-year old who began working at that time was mid-to-late 60s, meaning that life expectancy beyond retirement was a relatively short period of time. Now with a growing life expectancy, pensions will pay out not just for a few years, but for several decades, requiring public employers to pay pension benefits over much longer periods of time.

One outrageous aspect of this situation is that while public employees make up 15% of the population, it’s only a fraction of public employees that are causing this crisis. Federal pensions are not a serious problem, nor are the recently-hired state and municipal employees.

There is really only one generation of employees – a small minority of the workforce – that is devastating our schools and services. 95% of the population is paying for the comfortable retirements of the other 5%. This “upper 5%” will typically spend a third of their adult lives getting paid for not working while schools and the remaining workforce pick up the tab.

Governor Brown’s plan is now supported by Republican members of the legislature. Polls show the public also supports the plan. The Democrats in Sacramento, however, are still in the back pockets of the unions. It will be interesting to see how deeply the holdouts dig in their heels.[/quote]

Most of the growth in life expectancy over the past 50+ years came from lower infant/maternal mortality rates and lower death rates at younger ages (mostly due to antibiotics, vaccines, and fewer work accidents/more regulations). The net increase in life expectancy for those who reach 65 was about 2-3 years, IIRC.

[davelj]

[quote=CA renter]

Most of the growth in life expectancy over the past 50+ years came from lower infant/maternal mortality rates and lower death rates at younger ages (mostly due to antibiotics, vaccines, and fewer work accidents/more regulations). The net increase in life expectancy for those who reach 65 was about 2-3 years, IIRC.[/quote]

From a paper linked in another thread: “In 1935, 65-year-olds could expect to live 12 additional years on a gender-blended basis, while a 65-year-old in 2004 could expect an additional 19 years of life.”

So, the net increase in life expectancy since the beginning of Social Security for those who reach 65 is about 7 years (using 2004 data). So, about half of the overall increase in life expectancy over the last 75 years has been from lower infant mortality, and the other half from actual increases in longevity.

[sdrealtor]

And collecting for 19 years instead of 12 years is increase of close to 60%.

[bearishgurl]

[quote=sdrealtor]And collecting for 19 years instead of 12 years is increase of close to 60%.[/quote]

This is all the more reason why next time you decide to get your a$$ kicked again playing “golf” with your “well-heeled-gov’t-retiree-friend,” tell him it’s HIS turn to pick up the green fees.

Why should YOU always treat? After all, you’re just a poor-slob “Realtor” who doesn’t have a cushy defined benefit plan, right??

[paramount]

California public employees and their unions represent the pinnacle of greed.

[Anonymous]

[quote=davelj]
[…] the net increase in life expectancy since the beginning of Social Security for those who reach 65 is about 7 years (using 2004 data). So, about half of the overall increase in life expectancy over the last 75 years has been from lower infant mortality, and the other half from actual increases in longevity.[/quote]

Correct. And over the years, Social Security has adapted to this demographic change by raising the retirement age:

http://www.ssa.gov/pubs/ageincrease.htm

Full retirement age […] had been 65 for many years. However, beginning with people born in 1938 or later, that age gradually increases until it reaches 67 […]

(Probably not enough of a change, but at least it’s in the right direction.)

Now look at pensions again. From Gov. Brown’s statement, linked in my post above:

The retirement age for non-safety workers in 1932, when the state created its retirement system, was 65. The retirement age for a state highway patrol officer in 1935 was 60.

The system started out allowing people to retire at 65, consistent with SS.

But did pensions adapt with demographics? No. They went int the opposite direction, and in a big way:

Many non-safety employees may now retire at age 55, and many safety employees may retire at age 50, with full retirement benefits.

While Social Security raised the retirement age by two years, the pension system lowered the retirement age by ten years!

Combined with longer life expectancies and lowered retirement ages, the burdens on the pension system have grown astronomically. In 1932, people typically received a pension for just a few years, now a typical pension provides a few decades of payments. Pension benefits have grown by a factor of ten since the original plans were created.

It is absurd to believe we can pay people ten times more than we did in 1932 (in real, inflation-adjusted dollars.)

And every day we hear about more cuts in schools…

[CA renter]

[quote=davelj][quote=CA renter]

Most of the growth in life expectancy over the past 50+ years came from lower infant/maternal mortality rates and lower death rates at younger ages (mostly due to antibiotics, vaccines, and fewer work accidents/more regulations). The net increase in life expectancy for those who reach 65 was about 2-3 years, IIRC.[/quote]

From a paper linked in another thread: “In 1935, 65-year-olds could expect to live 12 additional years on a gender-blended basis, while a 65-year-old in 2004 could expect an additional 19 years of life.”

So, the net increase in life expectancy since the beginning of Social Security for those who reach 65 is about 7 years (using 2004 data). So, about half of the overall increase in life expectancy over the last 75 years has been from lower infant mortality, and the other half from actual increases in longevity.[/quote]

Using this table, at age 65, people of all races and both sexes are now (2007) living about 4.7 years longer than they did in 1950. (I’ve seen the net 2-3 years increase in multiple places, but will go with the CDC’s numbers for this post.)

At age 75, people of all races and both sexes are living about 1.3 years longer in 2007 than they were in 1980, which I assume is when they first started collecting this data(?).

http://www.cdc.gov/nchs/data/hus/hus10.pdf#022

Yes, people are living longer for a variety of reasons. My point here is that the notion that we are all going to live to be 100+ as a result of life expectancy trends is based on a faulty understanding of the nature of the improved life expectancy. The majority of that increase is due to fewer deaths in childhood/infancy and young/middle adulthood, with much of that due to antibiotics, vaccines, fewer accidents, etc. It’s loaded on the front end, not the back end of life.

[Author]

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