88 replies to this topic

[pencil0ttlb]

d

[MikeinFolsom]

I guess I don't really see how the cop, fireman, garbage man, etc. making 60-70k a year plus benefits is breaking the state. I don't see it. Can anyone give factual information on this one? Explain to me how a state worker that hasn't had a raise in 10 years is breaking the bank. Reference Bell City if you will. Of course you will. Interesting article in the Bee today or yesterday......most Wall Street CEOs are expecting upwards of a 50% increase in their BONUSES this year.

Yeah, that's taxpayers dollars that funded their bailouts. They've paid the government back so now are under no obligation to follow any type of federal regulations. So while private businesses and banks are snubbing their noses at the little guys, Corporate CEOs are raking in the dough.

Tell me all about private enterprise. Fact of the matter is......those CEOs cashing in on the big bucks aren't helping out you and I. They got the bailout, paid it off, and are home free. How many of US could have used a bailout of our own, but were turned down by the very same banks we bailed out?

[JRudi]

I guess I don't really see how the cop, fireman, garbage man, etc. making 60-70k a year plus benefits is breaking the state. I don't see it. Can anyone give factual information on this one? Explain to me how a state worker that hasn't had a raise in 10 years is breaking the bank. Reference Bell City if you will. Of course you will. Interesting article in the Bee today or yesterday......most Wall Street CEOs are expecting upwards of a 50% increase in their BONUSES this year.

Yeah, that's taxpayers dollars that funded their bailouts. They've paid the government back so now are under no obligation to follow any type of federal regulations. So while private businesses and banks are snubbing their noses at the little guys, Corporate CEOs are raking in the dough.

Tell me all about private enterprise. Fact of the matter is......those CEOs cashing in on the big bucks aren't helping out you and I. They got the bailout, paid it off, and are home free. How many of US could have used a bailout of our own, but were turned down by the very same banks we bailed out?

I do have to agree that some (but not all) public salaries and pensions are excessive. Unfortunately, the general public is under the impression that all are excessive, but this is just not the case.

Take for example the typical state employee (non-safety). At age 50 with 30 years of experience, a state employee would only receive roughly one-third of their salary (1.1 percent for each year of service). In contrast, a public safety employee at the same age (50) with the same years of service (30) would receive as much as 90 percent of their salary (three percent for each year of service). Now, most people are unable to retire at one-third of their salary, so non-safety state employees typically have to work much longer, and consequently pay more into the system (and take less out of it) before they can afford to retire. And, their retirement formula never reaches three percent per year as does the safety retirement system. In fact, the maximum amount they reach is 2.4 percent per year at age 63.

If you were to look at a listing of the top (six figure) pensions in the State (and such a list is available on the internet), you would see that it is dominated by retired police and firefighters. Many argue that they deserve their high pensions because their jobs are riskier, but do they deserve to receive almost three times more for the same years of service as other public employees? This is the one issue that I have the most difficulty accepting. And, this is the biggest reason, other than poor investments, as to why our government pension systems are in trouble. The safety pensions are just way too generous. This is where reform is needed the most.

One other little known fact is that social security pensions are reduced for those who receive another public pension. For example, public employees who participate in Social Security will ultimately receive a lower benefit although they pay the same percentages into the system. Now, just for clarification, not all public agencies in California participate in Social Security, but many do (like the State and Folsom). But, for those who do, their employees will receive a lower benefit than if they had worked in private business. Social Security laws reduce Social Security pensions for those who receive other government-sponsered pension. As I understand it, it is intended to penalize for "double dipping."

Lastly, it really ticks me off when I hear two particular council members (one of whom posts on this forum) say that city employees shouldn't receive certain benefits because those same benefits (or levels of benefits) are not typically paid in private industry. What these two council members fail to mention is that professionals in private industry receive benefits that their counterparts in the public sector don't receive, such as generous bonuses, stock options, fractional company ownership, and fancy company cars (such as Porches). I'm sure in this economy many in private industry wished that they worked for public agencies, but it was only a few years ago that many of these same people were taking home very generous bonus checks (not to mention being paid salaries that were easily 30 to 50 percent higher than their public counterparts). We will undoubtedly get through these tough economic times, and in a few years the pendulum will swing back in the other direction. Private salaries and bonuses will go back to where they were pre-recession, and much of the critism that is now heard about public employee salaries and pensions will go quiet. Again, I do believe that public pension reform is needed, but it needs to be targeted to the problem areas, and not just applied across the board.

[Redone]

ADD this to how numbers work out :

-- CalPERS was using an 8 % growth factor ,and they don't actually get 8 % each year in growth.
-- And if Survivor is much younger then payout can go on for a long period, yet this is not adjusted for at retirement as only the age of the Retiree is factored.

[texson]

Don't forget, the "top earners" as you stated that were from public safety are the "top brass", very few of them spent much time on line to get to where they are in that amount of time. Which brings my next point, everyone is focused on the 3% at 50 gig. Do the math, very few FF and cops retire at 50, because they cant, in order for that figure to work out you would have to have been hired when you are 20. The amount of pub safety running around with 30 yrs under their belt at the age of 50 is miniscule! at the very least!

[MikeinFolsom]

Here's how I see it. Public Safety guys....the guys carrying guns and hoses.....need to be rather fit and in somewhat decent shape. Most guys over 50 aren't going to be in the shape needed to carry a grown man down a flight of stairs with an air tank on. Most guys over 50 aren't going to be able to wrestle with the 20 year old crook that just broke into your house and is threatening your family. That is why the 50 year old threshold came into play. You DON'T want elderly guys coming to your house to save you or your family's bacon when the seconds count.

These guys are going to need some type of pension to allow them to put in 20....25....30 years and then allow them to retire at an age that they physically won't be able to perform the jobs they are tasked with. Now, can you physically sit behind a desk and type on a computer until you're 68? Yep. I do believe you can. When you compare apples to oranges, it is always going to tip in favor of the apples. Unfortunately, public safety isn't built on the model that you put 20 years in doing line and field duty, then the last 30 or so years are spent behind a desk. It just doesn't work that way.

Another thought...what if you physically couldn't do your job anymore when you reached your early fifties, and had to find a second line of work totally unrelated to your knowledge, skills, and abilities you have honed for the last 30 years? What would you do? How many people will hire you in your middle 50s at roughly the same rate of pay? How many on here are pushing into their late 40s and early 50s and still have pre-teens and teenagers in the house?

The jobs are set up with the parameters for a reason. Not because you're going to put 30 'easy' years in and reap the benefits. The jobs are set up with those parameters because extensive studies have shown that after 46 years of age, physical ability is 30% of that of a 20 year old. The military has done extensive studies on this very subject. That is why the military has a 30 year and out retirement at 75% of their last pay grade.

If you want to find the real poop on the deal, look at what the state classifies as "safety employees". That will be an eye opener. Milk inspectors? Gimme a break.

[JRudi]

ADD this to how numbers work out :

-- CalPERS was using an 8 % growth factor ,and they don't actually get 8 % each year in growth.
-- And if Survivor is much younger then payout can go on for a long period, yet this is not adjusted for at retirement as only the age of the Retiree is factored.

Just for the sake of accuracy, CalPERS' current assumed annual rate of return on their investments is 7.75%. This has come under question the past couple of years (as being too optimistic) because of their recent investment losses, as well as the lower (albeit only slightly) rates of return (either 7.5% or 7.25%) assumed by some of the other state pension systems (such as CalSTRS and the UC retirement system). This difference may not sound like much, but when it is factored in when determining the amount of pensions it can be significant. It can either mean that the employee must pay more to receive the same pension when all other factors (age and time of servce) remain the same, or the employee receives a lower pension given the same factors.

As for the survivor issue, CalPERS does take into consideration the age of the surviving spouse (or domestic partner). Generally, the greater the age of the designated survivor the higher the pension, and the lower the age of the designated survivor the lower the pension. It is all based on actuarial calculations. CalPERS does allow an option where the pension does not continue when the employee (or retiree) passes away (called "Unmodified Allowance"), and in this case the age of the designated survivor is not taken into consideration when determining the amount of the pension.

Clear as mud?

[JRudi]

Here's how I see it. Public Safety guys....the guys carrying guns and hoses.....need to be rather fit and in somewhat decent shape. Most guys over 50 aren't going to be in the shape needed to carry a grown man down a flight of stairs with an air tank on. Most guys over 50 aren't going to be able to wrestle with the 20 year old crook that just broke into your house and is threatening your family. That is why the 50 year old threshold came into play. You DON'T want elderly guys coming to your house to save you or your family's bacon when the seconds count.

These guys are going to need some type of pension to allow them to put in 20....25....30 years and then allow them to retire at an age that they physically won't be able to perform the jobs they are tasked with. Now, can you physically sit behind a desk and type on a computer until you're 68? Yep. I do believe you can. When you compare apples to oranges, it is always going to tip in favor of the apples. Unfortunately, public safety isn't built on the model that you put 20 years in doing line and field duty, then the last 30 or so years are spent behind a desk. It just doesn't work that way.

Another thought...what if you physically couldn't do your job anymore when you reached your early fifties, and had to find a second line of work totally unrelated to your knowledge, skills, and abilities you have honed for the last 30 years? What would you do? How many people will hire you in your middle 50s at roughly the same rate of pay? How many on here are pushing into their late 40s and early 50s and still have pre-teens and teenagers in the house?

The jobs are set up with the parameters for a reason. Not because you're going to put 30 'easy' years in and reap the benefits. The jobs are set up with those parameters because extensive studies have shown that after 46 years of age, physical ability is 30% of that of a 20 year old. The military has done extensive studies on this very subject. That is why the military has a 30 year and out retirement at 75% of their last pay grade.

If you want to find the real poop on the deal, look at what the state classifies as "safety employees". That will be an eye opener. Milk inspectors? Gimme a break.

I can't argue that people don't slow down as they get older, and I certainly don't want some 75 year-old guy trying to rescue me from a burning building if I'm ever in that situation. But, the reality is that the 3% @ 50 program is way too costly and can not be sustained. Take for example the City's prior Fire Chief (a good guy, by the way). He retired at age 50 and maxed out his pension at 90% of his pay (actually it is more than 90% because of EPMC - but non-public employees won't understand this, so I won't try to explain it). According to the website that lists public agency retiree pensions of $100,000 per year or more, he is receiving an annual pension of $158,000. He paid into the system (i.e. made deposits) for 30 years, but will likely withdrawal from the system at least this long assuming that either he or his wife live at least 30 years from his retirement date (a reasonable assumption given today's life expectancies). Just multiplying $158,000 by 30, he and/or his wife will receive almost $5 million from PERS. This is in today's dollars, but because PERS allows an annual increase of 2.0 percent, the actual number could be as high as $8.6 million. There's no way that the amount that he and the city paid into the PERS system during his 30 years of employment on his behalf, plus interest earned, will be enough to fund this. Others in the system will have to make up the difference, and this is wrong. It's not the Chief's fault; it's just a flaw in the system.

Another approach to deal with the short working careers of public safety employees is to have them do what many in the private sector do (as well as many employees in the public sector) and that is for them to personally invest in an additional pension system to augment their PERS pensions such as a defined contribution plan (like a 457 or 401(a) plan). These are offerred by most agencies, and is how many non-safety employees are able to retire at a relatively early age (55 or younger). It requires self-discipline and sacrifice, but it can be done. Frankly, I believe much of the problem is that it is not encouraged enough by public agency employers.

Another option PERS offers is the purchase of service credit. PERS allows the purchase of additional years of service credit based on a variety of situations, including past military experience, working for a PERS agency while in college, or time served in the Peace Corps. They will also allow any "vested" employee to purchase up to five years of service time even if they don't have any of the aforementioned experience. It can be expensive, but it does allow someone to augment their pensions, thus allowing them to retire at an earlier age if they desire to do so. One more option allowed by PERS allows for the "front-loading" of pensions through the purchase of a temporary annuity. This can be used by someone who desires to retire earlier than they otherwise could afford to, but allows them to increase their pensions for a set number of years initially until such time that they either reduce their expenditures (such as pay off a home) or increase their income (such as qualify for social security).

The bottomline is that there are options for augmenting a PERS pension, and public safety employees should be looking into this rather than continue relying on the very expensive and unsustainable 3% at 50 system.

[JRudi]

Don't forget, the "top earners" as you stated that were from public safety are the "top brass", very few of them spent much time on line to get to where they are in that amount of time. Which brings my next point, everyone is focused on the 3% at 50 gig. Do the math, very few FF and cops retire at 50, because they cant, in order for that figure to work out you would have to have been hired when you are 20. The amount of pub safety running around with 30 yrs under their belt at the age of 50 is miniscule! at the very least!

Actually, a fairly high percentage of police and firefighers retire at 50 or within a year or two beyond 50. And, the listing of six-figure CalPERS pensioners from the City of Folsom is dominiated by former police and firefighters, many of whom were below the chief level. One such pensioner from Folsom was a police leutinent, who is listed as receiving an annual pension of $126,000. Not too shabby for a guy who didn't even crack the top two management tiers (captain or chief). As for the rest of the pensioners listed from Folsom (about 10 or 12), only one is non-public safety - a former city manager. Within the next couple weeks there will be several more added to the list (once it is updated), but only one of them will be non-public safety. The rest, to my knowledge, about four or five, will all be safety.

What can one conclude from this? Well, for me, I probably should have never gone to college and taken on the rigors of a technical curriculum. Instead, I should have gone to a fire or police academy. I would be much better off today from a financial standpoint if I had.

[texson]

umm, no.

[firemedic24]

This is a CA PERS response to questions from California Watch...

“Our records indicate that over the last seven years, safety workers who retired at age 50 with 30 years of service represented 1 percent of all those retired. The reason very few ever would receive this level pension is that ...they would have had to start working age 20 to earn 30 years. Most start their safety careers at age 27, 28, or 29.

Twelve percent of all public safety members are subject to the 3 percent at age 55 formula. They would need 37.5 years of service at age 50 to get 90 percent, and would have had to start working at age 12.5 to earn 37.5 years. And 7 percent of all public agency safety members are subject to the 2 percent at age 50 formula. They would need to have 45 years of service at age 50 to get 90 percent, and would have had to start working at age 5 to earn 45 years.

Please check out this informative link... CALPERS RESPONDS

[JRudi]

This is a CA PERS response to questions from California Watch...

“Our records indicate that over the last seven years, safety workers who retired at age 50 with 30 years of service represented 1 percent of all those retired. The reason very few ever would receive this level pension is that ...they would have had to start working age 20 to earn 30 years. Most start their safety careers at age 27, 28, or 29.

Twelve percent of all public safety members are subject to the 3 percent at age 55 formula. They would need 37.5 years of service at age 50 to get 90 percent, and would have had to start working at age 12.5 to earn 37.5 years. And 7 percent of all public agency safety members are subject to the 2 percent at age 50 formula. They would need to have 45 years of service at age 50 to get 90 percent, and would have had to start working at age 5 to earn 45 years.

Please check out this informative link... CALPERS RESPONDS

The vast majority of public safety employees who do retire, retire under the 3 percent at age 50 formula. This is almost triple the percent per year for miscellaneous state employees for age 50. Their 2 percent at age 55 formula is only about 1.1 percent per year at age 50. Also, as I have indicted in a previous post, the list of $100,000-plus pensions for the City is Folsom is dominiated by public safety employees. (Check out the Jarvis-Gann webiste.) Only one person out of about 12 or 14 currently on the list was non-public safety (a former city manager). All the others on the list are public safety. This is typical for mid-sized cities. And, by the way, the list has grown as of today by at least four or five people, all but one of whom are public safety.

What this means is that public safety employees generally retire at an earlier age and for more money than other public employees. This is a double hit on the retirement system. They pay into the system for fewer years and draw from the system for more years than other public employees. Pension reform has got to start with public safety, which incidentally is contrary to what Meg Whitman is proposing.

[Redone]

And 7 percent of all public agency safety members are subject to the 2 percent at age 50 formula. They would need to have 45 years of service at age 50 to get 90 percent, and would have had to start working at age 5 to earn 45 years.

Better check your facts on that one.

Under 2% @ 50 when you reach age 50 each year after that increases above 2% by .14 per year.

Age 51 2.14
Age 52 2.28
Age 53 2.42

and so on.

[JRudi]

Better check your facts on that one.

Under 2% @ 50 when you reach age 50 each year after that increases above 2% by .14 per year.

Age 51 2.14
Age 52 2.28
Age 53 2.42

and so on.

Wrong! You are quoting the 2.7 percent at age 55 program. Under this program, employees are eligible to retire beginning at age 50 at 2.0 percent per year. Each quarter birthday thereafter, the percentage per year increases at a linear rate to 2.7 percent per year at age 55. So, at age 51 it is 2.14 percent per year, age 52 2.28 percent per year, age 53 2.42 percent per pay, and age 54 2.56 percent per year. The 2.7 percent at age 55 program is considered an "enhanced formula" for which local agencies have to pay more (for their miscellaneous employees). Otherwise, the standard formula for local agency miscellaneous employees is 2.0 percent per year age age 55, which starts out at approximately 1.46 percent per year at age 55 (less than half that for public safety at the same age), and increases at roughly a linear rate (but not exactly) to 2.0 percent at age 55.

What I said in my previous post is that the formula for miscellaneous state employees, the vast majority of employees in the CalPERS system, is 2.0 percent per year at age 55, which starts at roughly 1.1 percent per year at age 50. This is roughly one-third the rate that public safety employees receive at the same age under the 3.0 at age 50 formula.

Again, the bottom line is that public safety employees are able to retire at a much younger age and receive a much higher pension than other public employees. And, this is a double hit on the retirement system because it means they pay into the system for fewer years but draw out of it for more years (and at a much higher rate). If you believe pension reform is needed, then it should start with public safety (which is contrary to what Meg Whitman is proposing to do - she scares the hell out of me).