Question for those of you opposed to government pensions.

[briansd1]

Always studying, thanks for the candid posts. Those are the kinds of honest discussions we need to have in order to come up with workable and fair solutions.

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BG, my buddy had a girlfriend in Corpus Christi who wanted to get pregnant and get married as fast as possible. Plus his sister is greedy and money hungry (gets $90k/year in alimony and still pleads poverty) so he’s remained a bachelor. I tell him that if he’s worried about dying lonely, he could always bring a poor foreign bride to America and either have kids with her or adopt. She will eternally be grateful, cook and take care of him ’til death do they part (I’m kinda joking here).

I have 2 young cousins who enlisted out of HS and went to war after 9/11. One guy saw combat in Afghanistan, but he’s perfectly well-adjusted. The other guy was sent to learn Korean at Monterrey Language Institute. But then they send him to Iraq to some office job.

They are both in college now (paid for by the government). They also get $1,200 per month stipend for going to school (married guy gets more but I don’t recall how much). One cousin married the daughter of a pastor and is majoring in political science — perfect springboard to a political career, IMO.

What’s the NPV of that college education?

BG, did you know that after basic training, soldiers don’t even have to make their own beds? They have people to do that.

[bearishgurl]

Always studying and brian:

Realize that my “experience” as a “military spouse” is dated as my (enlisted) ex-spouse retired 18 years ago and NEVER USED his Vietnam-era GI Bill (4 yrs of public college or university + small $400-ish monthly living stipend. I am unclear if he could now use it in “retirement” if he should so choose (he likely wouldn’t, in any case).

Nevertheless, he has continually been and is extremely successful in life!

At the time of our “retirement,” our housing allowance was just $688 mo! Housing allowances for enlistees went up exponentially in the 2000’s. I DO think they are ridiculously high and do not provide the member-family an incentive to live in military housing (with utils paid). They can rent a luxury 1 bdrm apartment and still have money left over for utilities and ALL the cable channels! And that’s without the spouse even working! A civilian married couple, both with GEDs and/or HS diplomas (similar to an E-4 in the military) with both working min wage jobs cannot afford to pay $1800-$1900 month (amt of current E-4 housing allowance) in rent and utilities!

I too, never lived on military housing but have been inside plenty of units in SD. At that time, they were managed by Navy civilians but were VERY spartan compared to today. What you see here now are newer construction units built for the Navy on non-Navy-owned land and complete gut/remodel jobs inside and outside of the older units on long-owned Navy land. I considered them “substandard” at the time. They used to have concrete floors, some with industrial asbestos-type tile or linoleum (similar to the ships) and vinyl “roller shades” in all the windows. The washer and dryer hookups were in the middle of the kitchen with the other kitchen appls. A tenant was allowed to furnish their own rugs if they wished. In two of the complexes, lines of metal trash cans were permanently chained to the sidewalk, being unlocked ONLY by the Navy’s own compactor personnel. These units were “serviceable” but had no other “redeeming qualities.”

For most all of “my era,” spouses were considered a frivolous accessory to a seabag but nevertheless gave an enlistee an additional $150-$300 mo (depending on rank) in “housing allowance” if he/she was married. Soldiers and sailors often marry young because the military has offered them a financial incentive to do so for about the last 40 years (in the form of a “housing allowance”) called “BAQ.” The SD area also had a small “VHA” added to that.

I know there has been a ramp-up of free services provided to enlistees’ families since about 2000, due to the intransigent problems I described earlier in the thread causing readiness for combat and retention problems among married members deployed to grueling back-to-back stints in war zones. Back in the day, it took 2.5 to 3 weeks for “snail mail” to reach a deployed member, due to all the APO/FPO channels it had to make its way thru. If they wrote back and put it in the ship’s PO, it didn’t leave the ship until it ported or a plane or helicopter took it off. They didn’t have access to a phone unless they got liberty at a port and called from a $1-$4 per minute pay phone (too expensive for a young family). The only way a spouse could send an “instant” message to the ship was to wait in long lines at a Red Cross facility with a prepared (limited-word) written message to be sent to the member’s ship, squadron or unit in Morse Code. Up until the early nineties (when they got 3 “free” retired local ham radio operators to send them), the spouses could only send “emergency messages” thru the Red Cross. Requests for these messages were required to have a doctor’s or funeral director’s statement submitted with them.

The naval hospital “suites” were not private and were divided only by cloth curtains which ended about 18″ from the floor. There were up to 36 patients in each “room” excepting the ICU. Champus (now Tricare) in San Diego could ONLY be used at military facilities unless there was no space (rare). There were only two mil pharmacy locations in the county, NAVHOSP and Camp Pendleton Hospital. NAVHOSP pharmacy was outside with a “bus stop” cover over it and wood and metal traincar benches all facing the number-pulling machine and the light showing which number was being served. The commissary cash registers were also outside with a similar cover over them, making it difficult to keep a cart of cold food cold standing in line in the summer.

Technology has allowed current military families to talk and even see their deployed spouse/parent nearly every day or at least once a week. It’s a whole ‘nother world now for military spouses and children. A much better gig than what was experienced by their forebears, who had to be the Jack or Jill of all trades and keep a stiff upper lip for the duration. A good portion of them bailed out of this “canoe club” (up sh!t creek w/o a paddle) very early on :=0

[sreeb]

[quote=harvey]T
What that means is that if you had a 401K you’d have to accumulate that much in your 22 years of service in order to withdrawal $30K a year for life after retirement. Of course you could not live as long or live longer but age 70 is a pretty typical life expectancy for a 40 year-old today.
[/quote]

This works if you can accurately predict your lifespan to be below median.

You need much more in a 401K since life at 71 is going suck otherwise.

I’m planning for a worst case lifespan of 100. With Bernanke at the helm, I figure I can safely assume a 1% return after inflation. I should be able to get an inflation adjusted $30K/year from about $3M in a 401K.

[ctr70]

Military pensions are nowhere close to the “fat cat” pensions cops and firefighters get ($100k a year pensions often!). I know people who will have 25 years of service in the military as enlisted and only get $2,500/mo. To me that is reasonable. It’s the $100k+ cartoonish pensions many public workers are getting that are scandalous.

I’m not against pensions that are *self-sustaining* and do NOT draw on taxpayer money. I AM against *the taxpayer backstopping up pensions*. Many pensions assume a 7-8% return in order to make their promised payouts. When those returns don’t happen, the taxpayer has to come in and make up the difference. I have a 401k in the private sector…does the taxpayer back up my 401k if the market crashes??? NO! Of course not. I just have to live with less, that is my risk. So why the hell should we taxpayers back up public pensions???

Unions, collective bargaining and public pensions took a BIG hit last week with the elections in San Diego, San Jose and Wisconsin. The American people are sending a clear message now that it is being exposed how public pensions are ripping off the taxpayer and sucking the lifeblood out our schools, parks and cities to pay a few fat cat retirees their ridiculous pensions.

I would like to ask anyone who is pro “status quo” with the current pension set ups. What do you have against public employees having standard 401k’s like the private sector? What do you have against the taxpayer not backing up pension shortfalls?

[CA renter]

[quote=ctr70]Military pensions are nowhere close to the “fat cat” pensions cops and firefighters get ($100k a year pensions often!). I know people who will have 25 years of service in the military as enlisted and only get $2,500/mo. To me that is reasonable. It’s the $100k+ cartoonish pensions many public workers are getting that are scandalous.

I’m not against pensions that are *self-sustaining* and do NOT draw on taxpayer money. I AM against *the taxpayer backstopping up pensions*. Many pensions assume a 7-8% return in order to make their promised payouts. When those returns don’t happen, the taxpayer has to come in and make up the difference. I have a 401k in the private sector…does the taxpayer back up my 401k if the market crashes??? NO! Of course not. I just have to live with less, that is my risk. So why the hell should we taxpayers back up public pensions???

Unions, collective bargaining and public pensions took a BIG hit last week with the elections in San Diego, San Jose and Wisconsin. The American people are sending a clear message now that it is being exposed how public pensions are ripping off the taxpayer and sucking the lifeblood out our schools, parks and cities to pay a few fat cat retirees their ridiculous pensions.

I would like to ask anyone who is pro “status quo” with the current pension set ups. What do you have against public employees having standard 401k’s like the private sector? What do you have against the taxpayer not backing up pension shortfalls?[/quote]

First, let’s stop with the myth of $100K pensions for most firefighters and cops. The vast majority of public safety officers don’t get anywhere near that. Again, only ~2% of CalPERS retirees gets $100K or more.

Second, military retirees qualify for these pensions after 20 years of service, and many of them can find new careers because military personnel are given priority in many hiring situations. That’s not the case with firefighters and cops who almost always retire much later in life than the military retirees and don’t have jobs that they can easily transfer into because of the specialized nature of their jobs.

As for the military pensions being “self-sustaining”:

“Military retiree benefits cost the Pentagon $50 billion a year. That’s more than next year’s entire budget for the Department of Homeland Security. There are 1.9 million military retirees drawing pay and benefits, compared to 1.5 million in the active duty force. In 2010, then-Defense Secretary Robert Gates said those costs are “eating the Defense Department alive.”

(To be clear, veterans are those who have served in the military; they receive benefits from the Department of Veterans Affairs. Military retirees are those who serve 20 years or more — it is their benefits that are often seen as unsustainable.)

“Military retirees who are working age … for a family plan you pay $460 a year, [and] that covers you and all of your dependents,” says Todd Harrison, a senior fellow at the Center for Strategic and Budgetary Assessments in Washington, D.C. “And if you’re single, it’s $230 a year.”

When military retirees reach age 65 and are eligible to go on Medicare, they get something called TRICARE, a Medicare supplemental insurance plan, Harrison says. It covers everything Medicare doesn’t cover. The cost: It’s free. In addition to that, retirees also receive pensions. Depending on the rank of the retiree, the pension can be a couple thousand dollars a month or more.

To understand why these benefits are so expensive, you have to think about when military retirees start collecting them. Unlike private sector employees, who don’t receive entitlements like Social Security and Medicare until they are 65 years old, military retirees generally begin collecting benefits in their 40s. The average age of officers when they retire is 47, Harrison says. The average age of enlisted soldiers when they retire is 43.

http://www.npr.org/2011/12/04/143115964/cutting-retiree-benefits-a-sore-subject-for-military
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Now, I’m most certainly not against military pensions and benefits; just trying to point out that your assumptions regarding the “self-sustaining” nature of the pensions are being pulled out of thin air, and that the military retirees are even **younger** than those who retire from most other govt jobs where the average retirement age is 60 (see “next door neighbor was a cop…” thread for citations and more info). If they get govt jobs after retiring, which is very common, they can rake in far more than a regular cop, firefighter, teacher, etc. ever will.

[Anonymous]

[quote=ctr70]I would like to ask anyone who is pro “status quo” with the current pension set ups. What do you have against public employees having standard 401k’s like the private sector? What do you have against the taxpayer not backing up pension shortfalls?[/quote]

Read the “My next door neighbor” thread and you’ll see that question has already been asked. Multiple times.

The responses we’ve heard only address some peripheral detail, make some ridiculous claim, or are just plain self-contradictory:

“401Ks and pensions are both deferred.”
(Ok, so what?)

“The public sector doesn’t get Social Security”
(Correct. And the question we are asking is: why are the two groups different?)

…followed by something along the lines of:

“We can’t compare SS and public pensions because the retirement ages are different.”
(Uh yes, they are different systems with different retirement ages… Why?)

And then there are the colorful descriptions that suggest the public-sector works for ogres in the salt mines while the private-sector spends their workday at the spa.

The response you received above is typical: “I’m not going to answer your question, but instead dwell on some minor peripheral detail in your argument and also point out that other people get excessively generous and unsustainable deals also.” — basically an excuse a 2nd grader would use when he gets caught by the teacher: “But Bobby did it too!”

Nobody here has even attempted to answer the core question you asked above.

At this point it’s obvious that there is no good counter-argument to the proposal to transition the public-sector to the same system that everyone else uses. And, like you pointed out, the public is now starting to understand the full impact of the current system and it’s failures.

[sreeb]

From what I can tell the public employee advantage in health care for early retires largely goes away in 2014 when Obamacare kicks in.

Given that you transition to living off your savings, it shouldn’t be too difficult to keep your earnings in the mostly subsidized range.

[Author]

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