Posted on 06/06/2008 1:16:34 PM PDT by shrinkermd
Vallejo, Calif., took the extreme step of filing for bankruptcy to get out of generous obligations to public employees. Other cities and states are watching
The jig is up. For years, politicians have been playing what amounts to a multi-trillion-dollar shell game with state and local pensions. They've doled out lush retiree benefits to their heavily unionized workforces, knowing that they could shove the cost for those benefits onto future generations of taxpayers.
But a recent financial bombshell dropped by a San Francisco suburb shows why that shell game is now starting to unravel in a nasty way. And it's a cautionary tale that you can't afford to ignore.
...But the real nail in Vallejo's coffin was the city's labor costs. Under the current labor agreement, the average police officer walking the beat in Vallejo will be paid $122,000 this year before overtime, according to city documents. An average sergeant will make $151,000; a captain, $231,000. The average firefighter, meanwhile, will bring in $130,000 before overtime.
...So a Vallejo police sergeant making $150,000 a year can now retire at age 50 and receive an annual pension of $135,000, increased each year for inflation. To put that amount in context, you would need to amass a retirement nest egg equal to about $3.5 million to produce a similar retirement income on your own.
...But that no longer seems to hold true. According to the federal Bureau of Labor Statistics, the hourly salary (before benefits) of public-sector professionals (including teachers and lawyers) was $31.51 in December 2007, virtually identical to the $31.75 for private-sector professionals. Public-sector service employees (including many blue-collar jobs) averaged $16.72 an hour in salary, compared to $9.87 for private-sector employees.
(Excerpt) Read more at money.cnn.com ...
Notwithstanding this failure, count on the overwhelming majority of public employees to vote RAT.
Pensions are ridiculous, top-heavy payments that must collapse of their own weight.
My teacher wife’s pension is considerably larger than my pension(s) at twice her salary.
Sounds like cities should raise taxes to “invest” in their employees’ future. Watch your wallets on this one. This is the mother of all underfundings. Liberal mayors and councilmen paying their liberal friends for public sector job programs. Did you know your city work force was a job program? In Atlanta, they “couldn’t bear to lay off workers because those people NEEDED their jobs”. I guess taxpayers don’t NEED their money.
Pensioners getting screwed is just a taste of when Social Security and Welfare checks become unredeemable.
Holy hell will break loose on that day.
Cut salaries, end pensions — and introduce the real world to our “civil servants”...
Let them save their own money in a 401k or IRA as the government and private industry has told the “rest” of us to do......
While we’re at it — END “Civil Service” Unions.....
there is no way to actually pay for the many promises made.
That IS the liberal dimwitted way of doing things then why not TAX the $hit out of the middle class to pay for them. Liberals are too stupid for this life.
bump
Medicare is going to fail first. Future benefits will consist entirely of a coupon for $1.00 off a bottle of chewable Vitamin C tablets and a booklet from the Surgeon General entitled "Ten Tips for the Positive-Minded Octogenarian". ;)
But, not before they bring down taxpayers with ruinous tax increases necessary to support the gold plated pension plans, which are relics of the 1950s when people did not live 20 or 30 years, or more, on a pension, after having worked as little as 20 or 25.
Vallejo, Calif., took the extreme step of filing for bankruptcy to get out of generous obligations to public employees. Other cities and states are watching
The jig is up. For years, politicians have been playing what amounts to a multi-trillion-dollar shell game with state and local pensions. They’ve doled out lush retiree benefits to their heavily unionized workforces, knowing that they could shove the cost for those benefits onto future generations of taxpayers.
CAN ANYBODY SAY SOCIAL SECURITY AND MEDICARE ??
PROBALLY THE LARGEST “LEGAL” SHELL GAME PLAYED ANYWHERE IN THE WORLD.
“...So a Vallejo police sergeant making $150,000 a year can now retire at age 50 and receive an annual pension of $135,000, increased each year for inflation. To put that amount in context, you would need to amass a retirement nest egg equal to about $3.5 million to produce a similar retirement income on your own.”
The coupon rate of the 10 year treasury is now 3.875%. This is often used as the bench mark for a conservative return.
This makes Social Security and Medicare look like piggy bank problems.
The jig is up for you!
Once the public employee unions have to live under the same economic rules as everyone else, we might actually see an America with shared interests again rather than a balkanized collection of quarreling interest groups.
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