Archived posting to the Leica Users Group, 2011/03/13

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Subject: [Leica] Government and school pensions
From: ricc at embarqmail.com (Ric Carter)
Date: Sun, 13 Mar 2011 10:05:47 -0400
References: <AANLkTikSw38YyYSxGfuxM4edxVTg8h0TvBYBuDp_Xc2D@mail.gmail.com> <26075ACF-042C-4D77-9333-C55394821CE4@embarqmail.com> <AANLkTikLUBFjvC_m2keZHk=0ZP3dboifAhg6FPaLkibA@mail.gmail.com>

yes, exactly--the worker is sacrificing immediate reward for longterm reward


On Mar 13, 2011, at 12:34 AM, Jayanand Govindaraj wrote:

> Ric,
> The lower current salary could also be because of lifetime job security.
> This is usually the trade off for public sector employees the world over,
> even in Asia, where retirement benefits are minimal.
> Cheers
> Jayanand
> 
> On Sun, Mar 13, 2011 at 4:09 AM, Ric Carter <ricc at embarqmail.com> wrote:
> 
>> But, let's not forget. Pensions were one of the things management used as 
>> a
>> bargaining tool to keep wages down. Employees were persuaded to work for
>> less today on the promise of being cared for after retirement.
>> 
>> State employees still make less money than private industry when comparing
>> comparable education.
>> 
>> ric
>> 
>> 
>> 
>> On Mar 12, 2011, at 5:29 PM, Lawrence Zeitlin wrote:
>> 
>>> Rei is certainly right. Pensions are the biggest burden on state and
>> local
>>> taxes. I've seen how this operates from both sides. I was a union member
>> at
>>> my university for 32 years as my union negotiated for ever higher pension
>>> and medical benefits for retired faculty. The union espoused a defined
>>> benefit plan where the pension after retirement would be based on the
>>> average of the last three year's salary. It was an unfunded pension,
>>> payments to be made from endowment and current income. Fortunately the
>>> legislators in my state permitted faculty to drop out of the plan in
>> favor
>>> of a defined contribution pension where the university would contribute
>> 15%
>>> of annual salary plus whatever I cared to add into a TIAA/CREF retirement
>>> fund. I chose to invest largely in equities, a lucky decision. The Dow
>> was
>>> at 600 when I started. Now it hovers around 12,000.
>>> 
>>> On the flip side, I was a member of my local school board for 10 years. I
>>> saw our expenditures for student education rise markedly during and
>> mostly
>>> after my tenure. When I started, our budget was about $17,000,000 for an
>>> enrollment of 3,500 students, an annual cost of less than $5000 per
>> student.
>>> Currently the budget is over $50,000,000 for only 2,500 students, an
>> annual
>>> cost of $20,000 per student. While education costs have indeed risen
>>> (computers, mandated busing, special education) the bulk of the increase
>> is
>>> due to overly generous retirement and full medical care benefits paid to
>>> former teachers. Since school districts are prohibited from investing and
>>> can hold only a small amount in reserve, the full budget is paid by
>>> taxpayers every year. One teacher told me that she makes more as a
>> retiree
>>> than she ever did while working. You can imagine my joy at hearing that
>>> since I haven't had a kid in public school for over 20 years.
>>> 
>>> All I can definitively say is that state and local governments are on the
>>> slippery slope to bankruptcy because of the benefits negotiated in those
>>> golden '90s when it was assumed that the money would keep flowing in.
>> From
>>> my personal experience I suggest that educational and municipal
>> institutions
>>> get off the defined benefit retirement bandwagon and adopt a defined
>>> contribution system. Let the hard working teachers and government
>> employees
>>> take their chances on the economy like the rest of us.
>>> 
>>> Larry Z
>>> 
>>> _______________________________________________
>>> Leica Users Group.
>>> See http://leica-users.org/mailman/listinfo/lug for more information
>> 
>> 
>> _______________________________________________
>> Leica Users Group.
>> See http://leica-users.org/mailman/listinfo/lug for more information
>> 
> 
> _______________________________________________
> Leica Users Group.
> See http://leica-users.org/mailman/listinfo/lug for more information



In reply to: Message from lrzeitlin at gmail.com (Lawrence Zeitlin) ([Leica] Government and school pensions)
Message from ricc at embarqmail.com (Ric Carter) ([Leica] Government and school pensions)
Message from jayanand at gmail.com (Jayanand Govindaraj) ([Leica] Government and school pensions)