Time to get pensions under control-there is only one pot

twinpeaks66's picture

I know this is controversial.  First of all I love our city.  We are a little quirky but we have a clean, friendly city that is moderately easy to get around.    MUNI is generally cean and usually on time. (I am retired so I do not take it every day.)  I even find the person in the booth courteous and helpful. Our parks are beautiful but starting to show their age.  The streets I love are pot holed and in disrepair,  The school system is struggling.  So there is only one pot of money and something that really upsets me is the inequitable retirement age and pension amount and health care we support.  How do you plan for today when you are always paying off tomorrow.  

Public employees are paid equal wages to the private section and in some cases more (see the new york times, et al) they retire earlier than most and game the system to get more at the end and them we pay a huge percentage of their salaries and health care for life.  They retire so early they then get another job and double dip  

WE CAN'T AFFORD IT and it is unconscionable given the state of the economy.   We have transportation issues  education, seniors issues, infrastructure issues etc. AND only one budget.   I am waiting for a politician to take on the unions. Phil, are you that person.  Hoorah for Proposition D and let's see more of them.   We really need to get this solved quickly. Every day puts us behind and it straight up is NOT FAIR. 

I feel helpless to do anything and a victim of the unions.   

gcotter's picture

Replace Pensions with Annuities

I'm retired from a large corporation.  In addition to my401K investment I receive a monthly payment from a MetLife annuity.  It rocks!  How did I get so lucky to have this wonderful annuity paying me monthly for the rest of my life?

Simple:  My employer used to provide employees with a pension plan.  Much like public employees currently have provided by the city, state, etc.  But, in 1984 - yes, over a quarter century ago! - my employer decided to get out of the pension providing business.  

Instead, the company worked with MetLife to take the money in the pension fund and buy annuities for every current and former employee.  At the same time they set up a 401K plan (called a "Tax Advantage Plan") into which the company contributed an amount equal to a percent of each employees' salary each month.  Employees could contribute tax deferred income and the company would match the amount up to a certain percent.

I ended up retiring with a very healthy 401K plan that held money I contributed, my employer contributed, and which had grown over the years.  In addition, I contacted MetLife and started taking monthly payments that came from the annuity provided when the pension plan was terminated.

So, it can be done.  There are ways to get out of the pension business that is fair to the employees and to the taxpayers.  Why should public employees get pensions when no one else does?  What is unique about those jobs?  Why can't those employees do what workers all ovver America do and have 401K and/or IRA savings plans instead of pensions?

Get rid of this inequality now!  Convert current city pension plans to annuities and have all current and future employees start saving via 401K plans!  The Unions could still bargain for an amount of matching funds, but employees would need to contribute in order to get the matching funds.  

If 401K's and IRA's are good enough for the rest of America's workers it should be good enough for public employees and Union employees.

 

Paid for by Phil Ting for Assembly 2012. FPPC ID# 1343137