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Thursday, July 29, 2010

Need the Government Be So Generous With Pensions?

My debate topic for today:

Why should any government paid workers receive a pension over $100,000 when they retire, or more realistically speaking why should any government pension be over $50,000?

          Along with highly paid government workers, the issue of excessively high pensions paid to retired government workers has been a controversial issue in the news.  The wretched city manager, police chief, and other employees of the city of Bell, California have recently been exposed for their outrageous thievery of city tax dollars to pay obscenely high salaries to themselves and their cohorts.  The guilty parties have either been forced into resignation or could be facing a recall by referendum.  However, there is still the issue of the pension packages that were part of their contracts and may have to be honored by the state retirement system unless fraudulent activity can be uncovered and the contracts rendered invalid.

         The Bell employees may be looking at retirement pensions in the hundreds of thousands of dollars per year with eligibility starting at age 55.   I have heard that the estimated pension that Bell ex-city manager Robert Rizzo could potentially collect if he lives an average life span could be up to $25 million paid out of the already strained retirement funds. 

          According to recent data from  californiapensionreform.com 9,111 retired California government workers receive pensions in excess of $100,000 from the California Public Employees Retirement System (CalPERS).  Currently, the investigation and overhaul of the entire California government pension program is becoming a hot button issue in Jerry "Moonbeam" Brown's campaign for governor.  Many people are puzzled and angry with some of these ridiculously high pensions.

         Another blogger whom I have frequently championed and hold very dear has been upset with my debate topics "bashing" government workers and understandably so since she is a state worker.  In a reply to me she stated, "In the state of ca the average pension is just about 2000/month".   I can't say for sure if that is the case, but it sounds possible.  As I stated in my Debate Day topic last week, what I am questioning probably doesn't apply to most government-paid workers so I don't really feel like I'm bashing anybody, but I am merely questioning some of what would seem to me to be gross inequities of the system.

        Just to give an example:  The highest paid retiree in the Calpers payouts is former city manager and jack-of-all city jobs in the tiny Los Angeles County city of Vernon, Bruce Malkenhorst, who receives a reported annual pension of $509,664.60 per year, which translates to $42,472.05 per month.  Most of us probably don't make his monthly pay in a years time.  I think there is something very wrong with this picture.

        This is but one example out of many in the state of California.  Nationwide there are probably many similar examples.  Perhaps some of you can relate other examples that you have heard about.  I may not understand all of the facts, but with all of the stirring that is going on about the subject their must be a problem.  Our governments are facing financial trouble across the country and within the federal government itself.  A reassessment of the system and the way government operates must be done. 

        I certainly can't argue with the aformentioned $24,000 a year-- that is on the low side.  I also think that the retired government employees should retain good medical benefits.  But why would a government employee expect or need a pension over $50,000 if they also receive medical benefits?   Moreover, is there any ex-government employee that should ever receive in excess of $100,000?   And why should any of them be allowed to take retirement at age 55?   I'm just asking.   Do any of you have the answers?  What are your thoughts on this topic?




         

14 comments:

  1. It do seem a large amount of money, especially when there are many people living on the breadline before and after retirement.
    As you know I'm on the outside looking in and living away from the US my opinion is only my own.We here have the same problem
    so I guess it's anuniversal problem.

    Yvonne.

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  2. I'm still waiting for California to form its own country. Or sink into the ocean. One of the two!

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  3. I think you have hit the nail on the head Lee. The problem is the top half of the government with an excessive pay scale for the work performed.

    Yes it is a problem and a drain on the society of the state in which they live. But this need not apply only to the state level.

    As to over haul...problem here is those who do the over haul are the same people we take issue with.

    We need a campaign to bring all things back to the American people through their constitutional right of the vote. Let us decide our own fate.

    I love these posts. :)

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  4. I don't think government officials should be allowed to decide their own salary or pension! That's where the problem began.

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  5. Well on the one hand I don't there is anything wrong with people who served their community in a public capacity being taken care of after retirement. We are the richest country in the world (for now) and we should take care of our own.

    On the other hand 100,000 and a retirement age of 55 is ridiculous. I could live VERY comfortably off of 50,000 dollars a year, especially since I invest and save wisely through my working years.

    No wonder California is in a budget crisis.

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  6. someday in the future I imagine we shall all work just for the government and everybody else will work in some slave conditions, and we will have huge fight matches in which we will beat and kill each other for a position in some government facility :)))

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  7. Its so crazy now that I'm not sure things can be turned around here in California. Once the seventh largest economy in the world I'm afraid we'll be nothing more than a third world culture and economy in the near future.

    tremStephen Tremp

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  8. I have such mixed feelings on this topic. I STRONGLY think anyone caught cheating somewhere along the lines severs their right to ANYTHING and that government and industry alike has an obligation to investigate if it is suspected, even if the person 'goes quietly'.

    They don't do pensions anymore, but I guess my feeling on whether people should get them or not has to do with what was promised. A lot of government employees KEEP those lower paying jobs BECAUSE of the pension. The governments felt they could PROMISE those because for so long the economy had a steady rise--now it's tanked and it becomes unrealistic, but how much shoudl the person lose on it? They weren't managing the money (I'd like ENRON to pay the difference, but it won't happen).

    I guess I think they should DECREASE pensions by an amount equivalent to what would have been lost had the money been in a retirement account--that way they suffer equally to those of us with money in a 401K who lost a load, but not MORE.

    Multi-hundred thousand dollar SALARIES on the other hand... I take GREAT issue with, and a pension should be what, 70% of salary? 50%? I don't know the ratio, but LESS, so if no salaries were that high, then the pension problem wouldn't be so bad.

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  9. Lee,
    I will try to be short.
    Once again, you are opening a debate without doing research to support both sides of the argument. Looking up the CA pension reform, it is a private (non profit)organization, with its own agenda. It is set up for lobbying and political campaigning (Google 501(c)(4) organization). As with many reporters, they slant things to suit their particular agenda.

    Again, based on hype, agenda, half truths you bring to the table an issue that you want others to set you straight on without doing your own research so that you can present a fair balanced topic. You don’t even research my claim of what the ave. state pension is. All you say is “I can’t be sure that is the case”.

    And why not? It is public info. Use google. Hint: Key words CA public Retirement system. I’ll save you the trouble. You might find this document: http://www.calpers.ca.gov/eip-docs/about/facts/retiremem.pdf

    In a nutshell: Ave Monthly pension: $2,101
    Average Years of service 20.1
    Average age at retirement: 60
    78 % or all service retires receive $36,000/year or less.

    Few can afford to retire at 55. I will probably be 65 before I can afford to.
    The formula for your info for MOST cal/pers members is number of years served X 2% of your highest year of salary when you reach 55 years of age (if you are older you get something like .05 percent more per year of age with a max of 2.5% at 65). So, someone at 55 years of age earning 50K/yr, working for the state for 20 years will get: 20K per year in their pension.

    Excessive?? REALLY??

    Please stop lumping all government employees with the outlyers/exceptions. And please research your allegations to get the FULL story so that you don’t sound so biased and unfair, if not worse.

    Sig

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  10. Thank you to all who left their comments on this topic.

    Sig -- I want to be briefer since I need to get off the computer since I have company arriving shortly. I just wanted to make a few points.

    1) This is not a journalistic blog and, true, I don't do an extensive amount of research.

    2) I have repeated stated that I don't think what I am saying this week or last applies to most government employees.

    3) I believe there is a problem with the system. I'm not pulling any of this out of my head. It's a topic that repeatedly appears in media sources and in political campaigns. Where there's smoke there's fire, and maybe their is some media exploitation in the works, but there is probably also an underlying truth.

    4) If there are some problems the public has the right to know and you should be concerned about your current state and future as well. Why the furloughs and cutbacks? Will the retirement fund remain stable?

    5) Despite my lack of research, I think I have presented some accurate facts. If someone has evidence to the contrary I'd like to be convinced and have them presented to all of us. I have tried to be fair and if one carefully reads what I've said I think they would have to say I haven't needlessly cast a pall on everyone-- that was not my intent.

    6) This is Debate Day on Tossing It Out. Sometimes I take a side and sometimes I don't. I do try to load my presentation in order to fuel discussion. Ideally I'd have many different sides presented, not by me, but by those in the know. As I said before, this is not journalism. I am merely tossing some thoughts out there to see what others think about them. I want to learn something and I'm listening to everyone. But it is presented in a format that is also intended to entertain readers.

    7) I don't want to offend anyone by my debate topics. Sorry, Sig, if you were upset by anything that I or anyone on this forum has said. I just think that it is important to understand that a lot of people have questions about the way their tax dollars are being spent and how government is being run. Some of us have had bad experiences or know people who have. It's natural for us to want to know what's going on and we should be more fearful when people stop asking the questions and just blindly accept what's handed to them.

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  11. Hey Lee.

    Don't take the following the wrong way, as I am truly saying this with affection and the utmost respect.

    You might think you aren't writing a journalist blog. But the thing is, you do write in an authoritative voice. I guess I just have you held to a different standard because I know you said somewhere that you don't see your blog as a "vanity" blog, and that you have something of an aspiration of being a writer. Because of this...my expectations are different I guess. Maybe I should change that.

    It can be dangerous to spread 1/2 truths, especially when opinion is presented a truth. The media and politicians doe this all the time. It can be a mess and create all sorts of problems and misunderstandings.

    Yes the state has problems, I dont deny that. But blaming state employees.retirements for it is making us scape goats. The real problems become politcal hot cakes the politicians don;t want to tackle. They fear losing voters.interest grouos. Much easier to blame state employees, and take their money since the "Savings" are immediate. But its funny money in most cases, for example cal/osha is not funded from state money. Cut our salaries=no savings, or at best they get the money saved from the feds to put into general fund. This is of course illegal. State gets away with it with slight of hand.

    Yet with all that...I do see your prejudice quite loudly considering govt employees thru your 2 blogs and several comments. Be careful that your prejudice through whatever bad experience you had/have does not cloud the truth from you.

    No matter what...

    I still think the world of you!

    Hugs

    sig

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  12. Arlee, this is such a deep subject, I wouldn't even know where to begin. I mean lets face it, things are and will be so messed up for years. I have come to the point where I just don't bother getting upset anymore.
    It is a huge argument that will turn into a different argument that will turn into a different argument!
    I used to have the energy to fight it all but I don't anymore.
    This doesn't mean that I have completely given up, I just know when I am getting %$#@&! now.
    Love Di ♥

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  13. Lee-

    Similar to my comment last week regarding salaries, I struggle with a blanket cap on pensions.

    I think that a government entitie's pension formula should follow the marketplace.

    In that manner, the days of defined-benefit pensions (where your pension is a fixed amount) have long been over, and government needs to follow suit. For fifteen years or so, companies have offered defined contributions pensions (where, similar to a 401K, they set aside money for you, and it grows or doesn't depending on investment performance).

    That would be the first change I would make-change the plan type.

    The second plan, as I stated last week, is change the management philosophy of government away from the Marxist "everyone paid the same" to a "pay for performance" structure, where hard work and innovation is rewarded and encouraged.

    I'd also caution you that $100,000 is not rich. I've got friends that make a lot more than that, and when you're raising a family, they may have nicer stuff, but they're still probably living paycheck to paycheck like most people.

    One of the greatest hoaxes our leaders have pulled off on us is to have the lower and middle classes at odds with each other, while the truly wealthy laugh all the way to the bank.

    If you want to begrudge the rich, ask why a twenty-one year old college quarterback is getting $47 million to play a game. Why are marginal actors paid millions to make lousy motion pictures? Why are authors paid seven figure advances for put out drivel?

    If we live in a free market economy, it should be free. But that means the government has to stop bending the rules towards Marxism.

    So how can you affect change? When you vote, look past the campagn ads and the party emblem and really critique what these people have done and how they live. Past behavior is an excellent indicator of future performance.

    Shameless self-promotion time.

    Coincidentally, my latest post on my political blog is all about how most Americans do not realize how close we are to practicing Communism as a country.

    If anyone is interested here is a link:

    http://discconnectedussr.blogspot.com/

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  14. Larry -- I've been cleaning up my emails so that's why I am responding to things that people may not even see.

    I don't think I ever said $100,000 is "rich" by U.S. standards. If it were I'd say cap government salaries at $30,000. However $100,000 is a good bit above the median American pay. I've been hearing lately that, especially with current economic situations, government pay is becoming better than private sector, especially when you include benefit packages. I don't know that government jobs are necessarily really part of a free market system as we think of it in private sector.

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Lee