$1400 per year Tax Hike Needed to Fund US Pensions

[DJH]

Study--http://www.cnbc.com/id/43498037

[Ivytalk]

THAT'S AN EXTRA $1400 PER HOUSEHOLD, PER YEAR, FOR 30 YEARS!!

Gotta love all those state and municipal employees.

[kalm]

Question: I know the institutional funds took a serious hit with the crash, how much have they recovered since?

[93henfan]

THAT'S AN EXTRA $1400 PER HOUSEHOLD, PER YEAR, FOR 30 YEARS!!

Gotta love all those state and municipal employees.

You can add federal employees as well. We contribute to a 401(k) equivalent called the TSP, but we also have a federal retirement (ie. pension). People hired before about 1985 are under what's called CSRS and received 60% of their pay for life upon retirement. They are not eligible for social security. Those of us younger types hired after that are under what is called the FERS plan. We receive a much smaller pension, somewhere between 20-40% depending on years served, age, and some other factors.

The Republicans are about to bring some legislation to the table that will increase our share of the FERS contribution by seven fold. This will effectively be a 5% pay cut for all federal employees. As we seem to be the popular whipping boys right now (current multi-year pay freeze, etc) for the nation's frustrations, I expect that the measure will go through. Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

[GannonFan]

Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

Yeah, you could try to sell that program on the slogan of "Hey, I'm taking a 5% paycut to pay for my pension - why don't you take a 5% paycut to also pay for my pension". I'm sure people will flood you with support.

[Wedgebuster]

I simply have to keep working to receive my "pension."

[TheDancinMonarch]

Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

Wouldn't help you as they then would be paying fewer taxes on 5% less income which would leave less money to fund your pension. Maybe they should get a 5% raise which would make private employment look like a better option than a government sinecure.

[93henfan]

Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

Yeah, you could try to sell that program on the slogan of "Hey, I'm taking a 5% paycut to pay for my pension - why don't you take a 5% paycut to also pay for my pension". I'm sure people will flood you with support.

Just making the simple point that everyone whines like little bitches as long as it's not their livelihood in the balance.

It's sort of like how millionaires and billionaires who find every way in the book to dodge taxes are always the ones bitching about taxes.

[AZGrizFan]

THAT'S AN EXTRA $1400 PER HOUSEHOLD, PER YEAR, FOR 30 YEARS!!

Gotta love all those state and municipal employees.

You can add federal employees as well. We contribute to a 401(k) equivalent called the TSP, but we also have a federal retirement (ie. pension). People hired before about 1985 are under what's called CSRS and received 60% of their pay for life upon retirement. They are not eligible for social security. Those of us younger types hired after that are under what is called the FERS plan. We receive a much smaller pension, somewhere between 20-40% depending on years served, age, and some other factors.

The Republicans are about to bring some legislation to the table that will increase our share of the FERS contribution by seven fold. This will effectively be a 5% pay cut for all federal employees. As we seem to be the popular whipping boys right now (current multi-year pay freeze, etc) for the nation's frustrations, I expect that the measure will go through. Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

Newsflash: Most people already HAVE taken a 5% pay cut....no matching on 401k's anymore....benefits cuts....cost increases.....layoffs....

Quitcherbitchin'.

[GannonFan]

Yeah, you could try to sell that program on the slogan of "Hey, I'm taking a 5% paycut to pay for my pension - why don't you take a 5% paycut to also pay for my pension". I'm sure people will flood you with support.

Just making the simple point that everyone whines like little bitches as long as it's not their livelihood in the balance.

It's sort of like how millionaires and billionaires who find every way in the book to dodge taxes are always the ones bitching about taxes.

Hey, I'm not immune to it - my wife is a public school teacher in PA and her union just had to concede a pay freeze for the first half of next year to avoid any layoffs. And at some point there's going to have to be a reckoning in PA for their pension system, especially since the multiplier was increased to 2.5 back in the flush days of '01-'02. But it's the price to pay for being beholden to tax payers to fund your job - at times, the tax payers are going to speak up. In this economy, just having a job is something to feel pretty good about. I just went through 2 years of pay freezes and 401k matching elimination - just got out of that about 9 months ago as they reinstituted everything (part of the benefit of working for a good US manufacturing company) - it's just how things are today.

[93henfan]

Newsflash: Most people already HAVE taken a 5% pay cut

Link? I just want to see where 51%+ of all workers nationwide have taken a 5% pay cut in the past, let's say, three years. That'll suffice to satisfy your statement as fact. Otherwise, we're dealing with hearsay, and I think we have enough lawyers here to tell you what that's worth.

[bandl]

You can add federal employees as well. We contribute to a 401(k) equivalent called the TSP, but we also have a federal retirement (ie. pension). People hired before about 1985 are under what's called CSRS and received 60% of their pay for life upon retirement. They are not eligible for social security. Those of us younger types hired after that are under what is called the FERS plan. We receive a much smaller pension, somewhere between 20-40% depending on years served, age, and some other factors.

The Republicans are about to bring some legislation to the table that will increase our share of the FERS contribution by seven fold. This will effectively be a 5% pay cut for all federal employees. As we seem to be the popular whipping boys right now (current multi-year pay freeze, etc) for the nation's frustrations, I expect that the measure will go through. Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

Newsflash: Most people already HAVE taken a 5% pay cut....no matching on 401k's anymore....benefits cuts....cost increases.....layoffs....

Quitcherbitchin'.

Guess my company doesn't really fit into that 'most' category...average raise of 7% over the last 3 years...401k matching FINALLY went into effect 01/01/11...healthcare cost for each employee went down almost 20% effective 6/1/11...bonuses of up to 25% of annual pay just went out last week (based on title/tenure)...company employee size is largest it has ever been...
Thankfully we're doin' alright.

[93henfan]

Bandl. You must be lying.

Liar.

Fuck government employees though, damn it!

[bandl]

Bandl. You must be lying.

Liar.

Yep. Business has never been better. Company size is about 85 right now and we're hiring 8 more positions last I heard (mostly peon/start-up). It wasn't too long ago when the company size was down to 35 and we were all in fear of our jobs. I believe that was around 2008. We all know how fortunate we are here. Especially us tenured rubes who stuck it out through those tough times.
But seriously...we never had 401k matching until this year. And we rolled over from ING to Vanguard..Vanguard is the shit!

[93henfan]

Bandl. You must be lying.

Liar.

Yep. Business has never been better. Company size is about 85 right now and we're hiring 8 more positions last I heard (mostly peon/start-up). It wasn't too long ago when the company size was down to 35 and we were all in fear of our jobs. I believe that was around 2008. We all know how fortunate we are here. Especially us tenured rubes who stuck it out through those tough times.
But seriously...we never had 401k matching until this year. And we rolled over from ING to Vanguard..Vanguard is the shit!

My kids' 529s are with Vanguard, via the Utah ESP (lowest fees I could find when I started the first one six years ago).

You're in the pharma, med, health insurance or something similar industry IIRC right?

If so, all these whiners about the price of their health care benefits should be going after your ass!

[bandl]

Yep. Business has never been better. Company size is about 85 right now and we're hiring 8 more positions last I heard (mostly peon/start-up). It wasn't too long ago when the company size was down to 35 and we were all in fear of our jobs. I believe that was around 2008. We all know how fortunate we are here. Especially us tenured rubes who stuck it out through those tough times.
But seriously...we never had 401k matching until this year. And we rolled over from ING to Vanguard..Vanguard is the shit!

My kids' 529s are with Vanguard, via the Utah ESP (lowest fees I could find when I started the first one six years ago).

You're in the pharma, med, health insurance or something similar industry IIRC right?

Yessir, both the wife and I are. Not health insurance though.

The wife's pharma company has one product left, and if it doesn't do well through phase II....she's looking for another job and we may be moving. Yippee! I hear Jersey has alot of pharma companies.

I'm enrolled in the 529 through VA, per the suggestion of our financial advisor. Fees were minimal, can't remember exactly though. It's doing pretty well too, although I try not to look at my 529/401k too often. I leave that up to the financial rube.

[93henfan]

My kids' 529s are with Vanguard, via the Utah ESP (lowest fees I could find when I started the first one six years ago).

You're in the pharma, med, health insurance or something similar industry IIRC right?

Yessir, both the wife and I are. Not health insurance though.

The wife's pharma company has one product left, and if it doesn't do well through phase II....she's looking for another job and we may be moving. Yippee! I hear Jersey has alot of pharma companies.

I'm enrolled in the 529 through VA, per the suggestion of our financial advisor. Fees were minimal, can't remember exactly though. It's doing pretty well too, although I try not to look at my 529/401k too often. I leave that up to the financial rube.

I save money by avoiding financial rubes.

[Grizalltheway]

My kids' 529s are with Vanguard, via the Utah ESP (lowest fees I could find when I started the first one six years ago).

You're in the pharma, med, health insurance or something similar industry IIRC right?

Yessir, both the wife and I are. Not health insurance though.

The wife's pharma company has one product left, and if it doesn't do well through phase II....she's looking for another job and we may be moving. Yippee! I hear Jersey has alot of pharma companies.

I'm enrolled in the 529 through VA, per the suggestion of our financial advisor. Fees were minimal, can't remember exactly though. It's doing pretty well too, although I try not to look at my 529/401k too often. I leave that up to the financial rube.

Well, that explains the whole 'never done better' thing. Great Recession or not, pill poppers gotta pop.

[Grizalltheway]

Yessir, both the wife and I are. Not health insurance though.

The wife's pharma company has one product left, and if it doesn't do well through phase II....she's looking for another job and we may be moving. Yippee! I hear Jersey has alot of pharma companies.

I'm enrolled in the 529 through VA, per the suggestion of our financial advisor. Fees were minimal, can't remember exactly though. It's doing pretty well too, although I try not to look at my 529/401k too often. I leave that up to the financial rube.

I save money by avoiding financial rubes.

Didn't you follow cleetus' and citgrad's recommendations to pull all your monies out of the stock market?

[93henfan]

Yessir, both the wife and I are. Not health insurance though.

The wife's pharma company has one product left, and if it doesn't do well through phase II....she's looking for another job and we may be moving. Yippee! I hear Jersey has alot of pharma companies.

I'm enrolled in the 529 through VA, per the suggestion of our financial advisor. Fees were minimal, can't remember exactly though. It's doing pretty well too, although I try not to look at my 529/401k too often. I leave that up to the financial rube.

Well, that explains the whole 'never done better' thing. Great Recession or not, pill poppers gotta pop.

Damn right, and with millionaire doctors being wined and dined by pharmaceutical salesmen, you can be assured the population will remain well medicated, and with millionaire lawyers defending those doctors, you can be assured the doctors aren't worried in the least about prescribing massive dosages.

[AZGrizFan]

Newsflash: Most people already HAVE taken a 5% pay cut

Link? I just want to see where 51%+ of all workers nationwide have taken a 5% pay cut in the past, let's say, three years. That'll suffice to satisfy your statement as fact. Otherwise, we're dealing with hearsay, and I think we have enough lawyers here to tell you what that's worth.

[bandl]

Yessir, both the wife and I are. Not health insurance though.

The wife's pharma company has one product left, and if it doesn't do well through phase II....she's looking for another job and we may be moving. Yippee! I hear Jersey has alot of pharma companies.

I'm enrolled in the 529 through VA, per the suggestion of our financial advisor. Fees were minimal, can't remember exactly though. It's doing pretty well too, although I try not to look at my 529/401k too often. I leave that up to the financial rube.

I save money by avoiding financial rubes.

I ASSume my rube knows more about money than I do....at least I hope so

[93henfan]

Link? I just want to see where 51%+ of all workers nationwide have taken a 5% pay cut in the past, let's say, three years. That'll suffice to satisfy your statement as fact. Otherwise, we're dealing with hearsay, and I think we have enough lawyers here to tell you what that's worth.

I'm not seeing where "most people have taken a 5% pay cut".

[BDKJMU]

THAT'S AN EXTRA $1400 PER HOUSEHOLD, PER YEAR, FOR 30 YEARS!!

Gotta love all those state and municipal employees.

You can add federal employees as well. We contribute to a 401(k) equivalent called the TSP, but we also have a federal retirement (ie. pension). People hired before about 1985 are under what's called CSRS and received 60% of their pay for life upon retirement. They are not eligible for social security. Those of us younger types hired after that are under what is called the FERS plan. We receive a much smaller pension, somewhere between 20-40% depending on years served, age, and some other factors.

The Republicans are about to bring some legislation to the table that will increase our share of the FERS contribution by seven fold. This will effectively be a 5% pay cut for all federal employees. As we seem to be the popular whipping boys right now (current multi-year pay freeze, etc) for the nation's frustrations, I expect that the measure will go through. Maybe we can get all private sector employees to also take a voluntary 5% pay cut to help pay for pensions.

Thing is very few private sector workers have defined benefit pensions- found one article that claimed only 15%.
"In 1980, 38 percent of private-sector workers in the United States had a pension plan that provided steady, if small, retirement checks until death. Today, only 15 percent of private workers still have pensions."
http://www.columbian.com/news/2011/jan/ ... -scrutiny/" onclick="window.open(this.href);return false;
Whether or not that 15% is accurate, even a smaller % of private sector workers have BOTH defined benefit pension AND employee matching 401K. You are going to see hardly any private sector workers that don't have both willing to have their taxes raised to cover public sector workers that do have both.

Think we're going to see a real fight in the future over the pension gap. Will see a combination of 4 things, at least at the state and the local levels:
-Will see budget cuts and layoffs over it.
-Will see taxes raised, which will cause a lot of resentment by private sector workers who don't have both to have to pay higher taxes for public sector workers who do have both
-Public sector workers will have to contribute higher amounts towards their pension plans to come closer to covering their true cost.
-Some localities declaring bankruptcy to have current pension plans thrown out and new ones drawn up.

[BDKJMU]

Relevant article in yesterdays WSJ:

New Front in Benefits Fight, Atlanta May Drop Pensions

ATLANTA—Atlanta's City Council is expected to vote as early as Thursday on one of the most sweeping overhauls of public-employee retirement benefits attempted by a large U.S. city in recent years, as cities and states across the country race to close big budget gaps.

The legislation, if passed, would set the stage for eventually eliminating the city's current pension system entirely. That would shore up its budget and potentially bolster similar efforts by other municipal governments. Many pension changes undertaken by other cities have focused largely on asking public employees to kick in greater contributions to their retirement funds or reconfiguring benefits.

Faced with a $1.5 billion shortfall in benefit payments owed to current and retired employees, Atlanta Mayor Kasim Reed is backing legislation to phase out pensions, which offer defined benefits, and replace them with a 401(k)-type plan, in which the city instead pays defined contributions. The new plan would also have city employees join Social Security for the first time.

Mr. Reed said the proposal could save the city as much as $20 million a year. That would sharply reduce what Atlanta owes its retirees. In 2000, the required annual pension contribution from the city was $51 million. In 2010, it was $119 million, according to city officials.

New Rules Would Require States to Step Up Reporting of Their Unfunded Pension Promises
"The steps we are taking are going to have to be done across the country," Mr. Reed said in an interview. Mayors, governors and other political leaders have to push for pension changes for their governments to remain solvent, he said, but politicians also "need to have a very high pain threshold," because the changes will bring a backlash.

Baltimore's City Council voted last year to increase the years of service required to get a pension and other changes to save the city tens of millions in annual pension payments. Unions are challenging the changes in court.

Chicago's new mayor, Rahm Emanuel, a Democrat, tried to push pension changes in the Illinois state legislature this year, but union lobbyists defeated the plans. Other cities, from Los Angeles to Phoenix to Philadelphia, are considering pension changes.

Many of the efforts have been led by Democrats like Mr. Reed who were elected with the support of unions but now find themselves slashing benefits for workers—once politically unthinkable. New York Governor Andrew Cuomo, a Democrat, and New York City Mayor Michael Bloomberg, an independent, are both pushing pension overhauls.

Across the country,State legislators have filed more than 3,400 bills this year to deal with a trillion-dollar retirement-benefits gap, said Ron Snell, a senior fellow at the National Conference of State Legislatures. The result, he said, has been major change in 21 states.

That surge at the state level follows an even larger legislative flurry last year and is cumulatively greater than anything the country has experienced since the early 1980s. "The changes we've seen this year are designed to make pension plans sustainable over the long term," Mr. Snell said.

They have affected almost every aspect of pension contracts, said Keith Brainard, research director at the National Association of State Retirement Administrators. Retirement ages have been raised, benefits have been reduced, the length of time required to vest has been increased and annual automatic cost-of-living increases have been scaled back or tied to the pension portfolio's performance. The reforms are affecting some people who are already retired.

They have spurred lawsuits in Colorado, Minnesota, South Dakota and Rhode Island, among others. They have prompted legislative walkouts, massive rallies by public employees and efforts to recall politicians who have supported cuts.

The highest-profile fight came in Wisconsin, where Republican Gov. Scott Walker signed a law forcing public employees to contribute 5.8% of their salaries to their pensions and pay at least 12.6% of their health care premiums. They will have reduced ability to bargain for wages.

On Monday in Florida, the state's 140,000-member teachers union filed suit against Gov. Rick Scott, also a Republican, to block a law requiring public employees to contribute 3% of their salaries to their retirement plans.

While the majority of county government employees piggyback on state pension plans, many that are independent have pushed for change. Two weeks ago, Shelby County in Tennessee eliminated for new employees the key aspect of its pension plan, a full pension after 25 years of service, regardless of age.

"That was probably a mistake when they did it," said the county's chief administrative officer, Harvey Kennedy. New police officers and firefighters will now have to reach age 55 for a pension; government employees, age 65. The new deal also increases employees' contributions to the plan to 8% of their base salary, from 6%.

"We attacked it from a couple of different directions, because it was just killing our general fund," Mr. Kennedy said.

In California's Marin County, budget manager Dan Eilerman said county officials are focused first on lobbying the state legislature to expand local governments' power to alter pension plans. Last year, government workers agreed to raise the retirement age by 6.25 years for new hires to 61.25. County officials are now working with public-safety unions to raise new employees' retirement age and the time it takes to earn a full pension.

The Atlanta proposal is expected to pass, despite weeks of acrimony at City Hall. Atlanta is $18 million over budget for the coming fiscal year, despite years of cuts and hundreds of layoffs in every city department, including police, fire and public works. The city work force of 7,000 faces the prospect of 122 additional layoffs this year if the pension changes don't pass, according to Atlanta COO Peter Aman.

City unions oppose the pension changes, which cut city payments for worker retirement plans, and have vowed legal challenges. "What is happening in Atlanta to municipal workers is a travesty," said Jim Daws, president of the Atlanta Professional Fire Fighters Association.

If the proposal passes as worded, unions plan to go to court, said Gina Pagnotta, president of the city's Professional Association of City Employees.

Atlanta's cash woes have been exacerbated by the recession, which hit the city of 420,000 people hard. But its pension crisis is partly self-inflicted. Votes by the City Council in 2001 and 2005 dramatically increased the value of pension benefits for city workers. The city's liabilities increased as a result, but Atlanta didn't adequately increase contributions to its pension funds.The city's police pension was 96% funded in 2000 but is only 64% funded now. The firefighters' pension was more than 92% funded in 2000; funding is now 61.4%.

Mr. Reed backs legislation by Councilwoman Yolanda Adrean, which calls for a pension plan to continue for current employees but with significantly reduced benefits, and for new employees to be put into a 401(k)-type plan as well as Social Security. Ms. Adrean recently called the pension costs "a huge liability that is sucking the life out of this city."

The plan passed out of the council's finance committee last week, after a public hearing in which angry city workers heckled council members and hurled curses and insults. Union and city employees argue they have endured years of cuts, wage freezes and layoffs since the recession.

"The workers that supported Mayor Reed are being betrayed," said state senator Vincent Fort, a Democrat and a supporter of the unions.

Ms. Adrean's plan needs at least 10 votes from the 15-member council for passage. As of last week, seven members had signed on to the legislation.
http://online.wsj.com/article/SB1000142 ... te+pension" onclick="window.open(this.href);return false;