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Government Pensions: Scandal Or Red Herring?

Or maybe both? Public employee pensions are in the spotlight. Are we hearing the whole story?

 

Public employee pensions are a hot topic.

Tables like the one below, compiled by the California Pension Reform coalition, incite public opinion like a matador's red cape.

The chart shows retirees like San Leandro's former city manager, its police chief and other members of what reformers call the $100,000 club.

Are such pensions fair or excessive for the level of service, education and accomplishment of public sector managers versus their private sector peers?

And are the $100,000 clubbers representative of ordinary state or local worker?

Of course not.

A fact sheet from CalPERS shows that the average state worker who retired in 2010-2011 will get $3,065 a month.

Is that too much, too little or just right? 

Public attitudes may be influenced by the fact that private sector pensions are becoming rare.

U.S. News & World Reports says just 31 percent of employees have pensions. Unionized employees are far more likely to have pensions.

Is an attack on pensions an attack on unions?

And do we want to push down benefits down for those who have them or pull them for those who don't?

Heavy questions.

Leave some thoughts in comments. 

This chart shows the name of the retiree, and their monthly and annual draw.

ATTARIAN, DALE $14,302.57 $171,630.84  SAN LEANDRO BISCHOFF, JOHN $9,707.98 $116,495.76  SAN LEANDRO BOHNE, DAVID $12,754.82 $153,057.84  SAN LEANDRO DECOULODE, MARCELUS $12,281.56 $147,378.72  SAN LEANDRO DEKAS, ROBERT $10,928.77 $131,145.24  SAN LEANDRO FONG, NANCY $8,339.79 $100,077.48  SAN LEANDRO GLOVER, DENNIS $12,088.08 $145,056.96  SAN LEANDRO JERMANIS, JOHN $18,779.75 $225,357.00  SAN LEANDRO KITCHEN, JOSEPH $14,100.70 $169,208.40  SAN LEANDRO LUNSFORD, DAN $8,554.65 $102,655.80  SAN LEANDRO MAGINNIS, ROBERT $10,218.52 $122,622.24  SAN LEANDRO MARCHETTI, DANIEL $9,355.74 $112,268.88  SAN LEANDRO MAY, HUGH $9,695.28 $116,343.36  SAN LEANDRO OMEARA, JAMES $10,750.54 $129,006.48  SAN LEANDRO ROCKETT, ROBERT $9,695.55 $116,346.60  SAN LEANDRO RUGG, WILLIAM $8,910.06 $106,920.72  SAN LEANDRO SOLOMON, RENEE $8,713.34 $104,560.08  SAN LEANDRO SPIROU, LOUIS $9,736.64 $116,839.68  SAN LEANDRO STOUT, RANDALL $8,598.86 $103,186.32  SAN LEANDRO
David September 06, 2012 at 09:03 PM
Calpers won't be able to meet its promises for the average worker. It doesn't matter what 500 CEOs make across a country of 300 million, or what 50 CEOs make in a state of 33 million. You could steal every last dime from every single Facebook executive and worker and it wouldn't make a dent in the liabilities for the "average" Calpers pensioner. Math is a harsh master. Get used to it, Vernie. Promises that can't be kept, won't be kept.
David September 06, 2012 at 09:06 PM
Thanks for pointing this out. Only quibble is that a new person hired in 2010 will not get the unsustainable rate in 20-30 years, because the state will have been bankrupted by then and reneged on its pension obligations.
Thomas Clarke September 07, 2012 at 01:14 AM
It is time to get serious. Public employees should be subject to the same opportunities that those of us in the private sector have. 50 per cent payroll match for retirement funds. Period. None of this 100% stuff. Vote no on all the incumbents. No on taxes. No on the unions. We are getting screwed one more time.No No NO.
Richard Mellor September 07, 2012 at 01:35 AM
Leaving aside that there are abuses in pensions or state government as in anything else, what you folks who want to drive workers back to conditions that existed before the 1930's leave out is the amount of money in society and how it is allocated. The more than 20 trillion stashed in offshore accounts paying no taxes. Corporations that pay no taxes. Hedge fund managers and other wasters who rake in $5 billion a year and do no productive labor. And the few trillion of taxpayer money spent on predatory wars fought on behalf of the corporations by the children of working folk. I reject the worldview of Donald Trump and other parasites. The way things are going is young people will be working in to their 80's. If society cannot provide a decent and secure existence for people in their old age it is failing. Most people on this site appear to be nothing but mouthpieces for that section of society who don't work and truly are, "wards of the state".
David September 07, 2012 at 03:26 AM
Do you know how many hedge fund managers actually made $5B? 1? 2? you might as well rail against Tom Cruise making $200M on a film or LeBron in basketball. It doesn't matter. You can steal all their money. It won't make a dent in the pension obligations that *WILL NOT BE PAID*. The money is not there. Not in the Caymans, not in LeBron's pocket, not even in Buffett's charity (where he sheltered his fortune, tax-free). It doesn't matter what you want. It cannot be provided.
Dan Arnhem September 07, 2012 at 03:31 AM
"you folks who want to drive workers back to conditions that existed before the 1930's " No, Richard, I only want pension "rates" turned back to where they were prior to the giant hikes they took over the past 10 years. All after the passage of SB400. Remember, we're talking about credits for service years. If you go back to only 1999, nearly every city and county was at 2.0% for each year of service. Then they all enacted giant leaps. Oakland, Berkeley, Pleasanton, all jumped up an enormous 35% AND made it all retroactive. San Leandro went up 25%... also retroactive. At the same time salaries went up faster than inflation. The combination of the two drove up pensions from 40% to 60% above where they had been, EVEN after adjusting for inflation. So, NO, some of us are not talking about returning to the 1930's , not even to the rates in place in the 1960's... Some cities have already taken steps, but many have not, or their steps on pension reform are minimal. Oakland, a good example of minimal reform. Each city is different. The above relates to non-safety employees. The safety employees were also greatly boosted in the past decade and also need reform. In fact I don't know of any reasonable, responsible, individual who doesn't say significant reform is needed in the entire public pension arena.
Fred Eiger September 07, 2012 at 03:33 AM
Tom, a "dignified level of support in our old age" is brought upon by savings, and investing not by using the power of government to tax others to pay for obscene pensions. A pension is only meant to supplement one's own savings and investments, not to serve as a full time pay for no work. Remember, there is no such thing as "society wealth" but personal rewards.
Fred Eiger September 07, 2012 at 03:34 AM
Yes, the boot licking of government workers is pathetic.
Fred Eiger September 07, 2012 at 03:38 AM
You've just described most government workers. They provide no productive labor. Cities, Counties, States, and governmental agencies pay no taxes. Sounds more like a parasite. How many people does Donald Trump employ versus Richard Trumpka?
Tom Abate (Editor) September 07, 2012 at 03:05 PM
Two observations: 1. the anti folks want to pull government workers down rather than lift private sector workers up, and since there are more private than public workers, that does not help us retain our middle class. 2. Hermy Almonte, a city council candidate, points out the pension problem closest to home and most easily reformable, that is, govt workers in San Leandro have more generous pension benefits than their Alameda County peers -- an observation that deserves more discussion in this town and forum.
Richard Mellor September 08, 2012 at 12:28 AM
The crisis in society is not caused by public sector pensions, no more than it is caused by the exorbitant and downright obscene wealth of some individual CEO's which dwarfs any "excessive" public pension. You could cut all the $100,000 pensions in half in San Leandro and it won't stop the continued decline in living standards.This is a smoke screen intended to undermine the real cause of the problem and that is ownership and control of the dominant sectors of the economy, including the financial industry by a few thousand unelected individuals. We live in a dictatorship of capital and this dictatorship also has a monopoly of the political arena funding both political parties. Public expenditure also crowds out private capital the coupon clippers argue which reduces opportunity for profit taking. Also, more public sector workers are Unionized and this number has to be brought down and hopefully eliminated altogether as Unions are an obstacle to profit and capital accumulation for private individuals. Globalization has increased competition and in order for US workers to compete we have to be driven down more to the wage levels of China and India.
Fred Eiger September 08, 2012 at 01:24 AM
Another laugable argument. The money to fund government pensions is extracted from the private sector. The government produces no revenues, it can only tax in order to fund itself. If US workers had to compete and drive down wages to China and India, then why didn't companies move there 50 or 60 years ago? In the 1980's it was competing with Korea, in the 1970's it was Japan, in the 1960's it was Germany. The Left is always looking for scapegoats, despite the fact that the living standards of American's has increased substantially since the 1950's.
Fred Eiger September 08, 2012 at 01:26 AM
Sorry Tom, but that fish doesn't fry. We are not trying to pull government workers down, it is just the opposite. Government workers are using the coersive power of government and taxation to bring down the living standards of the private sector workers, when it is the private sector that generates the money to fund the government. The government does not fund the private sector.
Fred Eiger September 08, 2012 at 03:49 PM
Well put Dan Arnhem
Dan Arnhem September 08, 2012 at 06:43 PM
Tom #1.." the anti folks want to pull government workers down" Let me ask you this Tom. For decades San Leandro had a pension plan based on the worker getting a pension of 2.0% for each year of service. About 8 or 9 years ago they boosted that rate way up to 2.5%... That was a instant hike of 25% in pension. They made it retroactive. Now they relize the giant increase is unsustainable, so they have lowered it back to a sensible 2.0% per year of service. Is that what you label as "pulling government workers down" ? So I guess all the workers who retired in the decades before rates were jacked up were "down".... Funny but back in the 90's and before, everyone thought....NO, they knew, government workers already had great pensions. Then game the giant pension "blow-out" increases. Seems you suggest that the "blow-out" era is the norm and anything below that is being "pulled down". You seem to have lost site of fiscal sanity... as did so many city councils and legislators in the past decade. Get that public employee union support at any cost, damn the future ramifications and generations.
Tom Abate (Editor) September 08, 2012 at 11:57 PM
I like the statement, "That fish won't fry." Much better for us city folk than, "That dog won't hunt." Good points made here about the excessive leaps in public sector pensions in the early 2000s. That was when we were mesmerized by the stock bubble and thought pension hikes were "free" because the increases then came out of soaring stock prices. Now that is no longer true. And yes there are problems with financing these govt pension promises. But speaking of a fish that won't fry, I dispute that living standards have increased in some linear fashion. From the 50s through the 70s, yes. By the way when tax rates were higher than they are now. Post 80s, post outsourcing, not so much. The middle class is getting pounded like a veal cutlet. And not by govt pensions but by globalism and the greed of our financial sector.
Fred Eiger September 09, 2012 at 12:53 AM
Tom, Tom, Tom, I wish I could say; "now you're cooking with gas" or "now you're cooking with electricity" but I can't. Living standards haven't increased in the post 80's? Post 70s? Look how many electrical outlets are in homes today. Why? Because of all our gadgets we need to plug into. In 1976 a VCR cost over $1500 in 1976 dollars. Today we have DVR's, TiVo's in several rooms on LCD or plasma screens. A fax machine in a home office in 1985? Unheard of. A personal copier in a home office in 1985? Unheard of. Cell phones can be picked up for $10, in 1989? Unheard of. Compare a 1976 Coupe De Ville with a 2012 Cruze and the Cruze has more luxuries than the Couple De Ville; power windows, cruise control, leather, CD players, Ipod station, fuel injection. Tom you talk about higher tax rates in the 1950s-1970s. But, there were thousands of loopholes which were an attempt to get people to put their money in varioius "shelters" in order to 1. lower taxes paid and 2. get people to fund certain economic functions. Higher tax rates only serve to take money away from someone in order to fund a tax break for someone else. The beauty of the Reagan Tax Reforms was that it lowered tax rates AND eliminated the loopholes. I dont' know about you Tom, but I would much rather see a 28% top rate with no deductions for an SUV for business owners rather than a 35% rate and a guy can deduct the entire cost of a $62,000 Escalade to pick up eggs for his restaurant.
David September 09, 2012 at 01:20 AM
The government doesn't produce middle class jobs. A cop making $150k is not middle class. He's in the top 10% even in the bay area. Is it more "fair" to force the masses of poorer taxpayers to fund his retirement benefits that amount to well over $1,000,000?
Dan Arnhem September 09, 2012 at 02:42 AM
Tom, that Jello don't gel "Post 80s, post outsourcing, not so much. The middle class is getting pounded like a veal cutlet. And not by govt pensions but by globalism and the greed of our financial sector." True, the middle class has gotten pounded, especially the lower middle class worker. Yes most of that is due to other forces, but here is how I look at it. #1. The pensions and higher government employee salaries of the 2000's did impose some extra costs on that middle class. I mean that money did have to come from somewhere. #2. But the real point of contention is WHY, when everyone else was either losing ground, or fighting to hold even, WHY did government workers get such large increases in pensions, benefits and salary. Salaries and pension benefits did in fact increase relative to inflation. In fact the pensions skyrocketed due to the twin factors multiplied together. You increase salaries relative to inflation, and then you jack up pension rates. Example, cites like Oakland, Berkeley, Pleasanton, San Ramon, all gave instant and retroactive increased in pension rates of 35%.... Why not 5% or 10% or even 15%.... Why in God's name did they think a 35% instant boost made sense. It was madness, promoted by large and influential public employee groups. Boosting salaries along with the 35% pension rates, led to many pensions going up 50% to 80% higher than before. Many city council members ALSO get $9,000 "extra" for life
Craig Williams September 09, 2012 at 03:05 AM
The real tragedy in pensions is how corporation after corporation have ripped off retirees. Check out Retirement Heist by former Wall Street reporter Ellen Shultz.It 's a whose who in corporate America.Destitute retirees and obscene executive salaries. In the public sector high wage employees should contribute to their pensions.A graduated rate would be fair. Keep in mind we also have a hard time getting much in taxes from many commercial properties in California which is another heist.
Fred Eiger September 09, 2012 at 06:26 AM
You act as though commercial properties aren't generating; wages and taxes. That commercial properties are a "heist"???? Let's see... these commercial properties employ people for a wage, who in turn pay taxes and further our economy. Add another cost onto these commercial properties then they will have less to pay workers and have to charge more for their products. But you Craigs World, commercial properties are sitting on a nest of cash and can just nonchalantly absorb higher taxes to fund more government pay and pensions, which are twice what the employees of the private companies are receiving, but that is OK in Craig's World because government employees are good and private sector employees are bad.
David September 09, 2012 at 02:06 PM
Keep in mind that California has the second highest unemployment rate in the country. You're really gunning for #1. Even in the relatively strong bay area, there are still fewer jobs than there were in 2000.
David September 09, 2012 at 02:10 PM
Fundamentally, why do public employees, who make more than their private sector counterparts get ANYTHING? Put them on social security like the rest of us and let them take part of their salary to save for retirement like the rest of us. Alameda county firemen earning their average $144k should be able to fund their own retirement and not have to extort much poorer taxpayers so that they can have multi-million retirement packages at age 50.
Craig Williams September 09, 2012 at 03:23 PM
as
Fred Eiger September 09, 2012 at 04:26 PM
Exactly. And why are these firemen getting paid $150,000 for sitting on their butts? Because of idiots who have never developed past age 14 and live in a dream world who think about little red firetrucks and yellow rubber jackets. Working in a 7-11 at 2 a.m. is a hell of lot more dangerous than being a fireman.
Fred Eiger September 09, 2012 at 04:28 PM
How about "that stuff you call pasta is just macaroni"???
Fred Eiger September 09, 2012 at 10:18 PM
Excellent post Hermy. You are light years ahead of the Union Cheerleader Prola.
Tom Abate (Editor) September 10, 2012 at 11:38 PM
The San Leandro Police have endorsed candidates for city council and their pension stance plays a big role in their picks -- and city politics. Read about it: http://sanleandro.patch.com/articles/pensions-contract-factor-in-police-endorsement
Fred Eiger September 11, 2012 at 12:15 AM
Of course their pay and perks comes before the safety of the Community. Who amongst these "endorsers" lives in San Leandro? Now I know who NOT to vote for.
joe sanleandro January 03, 2013 at 10:37 AM
Bullshit ! They're bigger liars and thieves than the criminals they screw over in there so called careers! They just don't really "work" that hard or deserve it!!!!!!!!

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