Posted on 02/20/2011 6:01:28 PM PST by NoLibZone
Taxpayers kick in an average $8.60 for every dollar that city employees contribute to their pensions, a sweet deal costing the Big Apple a bundle.
The cost is expected to hit $7.6 billion this fiscal year and $8.7 billion next year.
BIG DIPPERS: CITY UNION CHIEFS PULL TWO SALARIES
"It's a double-whammy for taxpayers," said E.J. McMahon, a senior fellow at the Manhattan Institute.
"If they're privately employed, they shoulder the risks of saving for their own retirement. At the same time, they have to pay a steadily mounting cost of guaranteed pensions for government workers."
Teachers get the biggest bang for their pension contributions -- the city puts in $15.50 for every $1 they contribute.
Taxpayers pay $10 for every $1 firefighters put in, $9 for every $1 from cops and $5.60 for every $1 from transit, sanitation and other civil servants, the 2009 report shows.
"The cost has risen because employee benefits were dramatically increased in 2000, just as the [stock] market began to collapse," said John Murphy, former executive director of the New York City Employee Retirement System, NYCERS, the largest city pension fund.
"In retrospect, it was one of the most irresponsible things to have done," he said.
Many private companies cut back or suspended matching contributions to employee 401(k) plans after the most recent dramatic market downturn in 2008. Some have begun to restore contributions, depending on profits.
Cops and firefighters are guaranteed an 8.25 percent return on their contributions, and can take loans from the plans up to twice a year,at 4 percent interest.
It's only fair, said Anthony Garvey, who recently retired as executive director of the Police Pension Fund.
Taxpayers kicked in $7.35 billion to the city pension funds last fiscal year, while employees contributed $853.5 million.
(Excerpt) Read more at nypost.com ...
That 7 Billion could have been used to help starving women and childern, build new libraries, new schools.
What a scam!
Nothing like numbers to give people a clearer picture of what’s going on.
Bernie Madoff went to jail for this form of Ponzi scheme.
That 7 Billion could have been used to help starving women and children, build new libraries, new schools...
Disagree here that’s $7 billion that belongs in the tax payers pockets not in government hands to spend elsewhere.
Let's say we have a civil engineer. No matter who hires him he's going to cost the company or government agency pretty much the same ~ let's say it's $125,000 per year to hire on a civil engineer with appropriate certifications (that's going to include base pay, probable special or "overtime" pay, vacation, holidays, sick leave, retirement and medical insurance)
To the employer this engineer costs $125,000 no matter how you cut it.
So what's the best deal we can make him? If we pay him $125,000 flat out ~ straight salary, he's going to be paying a chunk of it at the highest possible federal income tax rate, and the highest possible state income tax rate. He'll be paying full Social Security. He'll have to buy a single medical policy which will run him well in excess of $20,000, and so on.
From the prospective engineer's point of view that $125,000 has gotten turned into $50,000 or less PDQ.
Let's say we tell the engineer, "Hey, well give you your retirement ~ we make a deposit in the fund equal to 20% of your base pay ~ then you don't pay federal and state taxes at the highest rate. That's worth an extra $7,000 per year!"
Yeah, he likes that. Then they offer him a "free" medical insurance plane, which he likes. Next thing you know he's got fully paid retirement, free medical insurance, and his take home is nearer $75,000 than the $50,000 he'd have gotten if he took full salary and paid for these things out of pocket. Plus, he got a great deal ~ his retirement and his medical are all on group plans, and he gets more for less.
The cost to the folks hiring this engineer continue to be $125,000.
All the Manhattan Institute is quibbling over is HOW the engineer gets paid ~ not what he costs.
Such debates are designed to fire up class envy and make it easier for the Communists to infiltrate our society and take over.
I agree.
Its a point to be used on the “what about the children?” side of the isle.
Yes its our money.
Yes , the blue cities high taxes need to be paid by taxpayers multiple times.
Be up front about it ~ not that it's your money, you just don't want to pay the employees as much.
It's possible that in tough times you can get more for less ~ maybe not. But that's what it is about ~ not that your employee is cheating you!
If you have an undesirable area you will need to pay the same civil engineer the same rate he'd command elsewhere. You might even need to pay him more.
The issue is what the engineer costs ~ and knowing that what will it take to attract the engineer.
I know a fellow who was a polymath in his youth and for a while he worked for Morton Thiacol ~ talk about some undesirable places of employment ~ he decided that San Diego was much better so he got a job with someone else. He rose through the ranks, worked with different companies, and finally became the morning time guy for the Mercury program launches ~ those old enough remember him ~ short fellow, very bright looking, bristly hair, full pocket protector on a white shirt with bow tie~! He ended up with a plush job somewhere near someplace in LA doing untold things for numerous space projects, etc.
He NEVER once succumbed to the attraction of far higher take home pay to work in the middle of a barren dessert with no fishing in 250 miles!
So, if you wanted a civil engineer out in the middle of nowhere you gots to pay!
It's not your money once it's paid ~ and if you make a deal effective over a period of time you are stuck with the deal.
Be careful what deals you make!
Is pretty funny Rush Limbaugh kicked NYC to the curb... the city govt. there can suck it.
Those "guarantees" can be broken. It's done to military retiree's all the time.
The problem comes when you start adding the cost of medical insurance for retirees. Those costs aren't covered under the pension system . . . they're paid by future taxpayers as direct line items in future budgets.
THAT is what is ultimately going to kill these various state and city governments, folks.
Btt
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