Posted on 02/25/2011 8:10:46 PM PST by tcrlaf
Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin. Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans.
Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.
How can this be possible? Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.
Many of us are familiar with the concept of deferred compensation from reading about the latest multi-million dollar deal with some professional athlete.
A review of the state’s collective bargaining agreements – many of which are available for review at the Wisconsin Office of State Employees web site - bears out that it is no different for state employees. The numbers are just lower.
(Excerpt) Read more at blogs.forbes.com ...
This is posted because it is the latest BS lie circulating the leftist blogosphere, with the intent of influencing the weekend news cycle, and Sunday talk circuit. The point of this post is to DEBUNK this crap, and if that’s not conservative, I don’t know what the hell to tell you.
You push back against propaganda, or you get run over by it.
“So that leftist crap propaganda can be countered by intelligent minds???”
First read, I missed that you comment #1 was an “update” of the article and thought those were YOUR thoughts. Ooops.
Previous IBTZ retracted. Sorry.
CA will get there first
OK, I think that I got it!
A teacher is hired and is told her annual take home pay is $80,000, but she will be credited with $100,000 and the extra $20,000 will go into a union lockbox for her future benefit.
So the taxpayer pays her $80,000, and pays her lockbox account $20,000. She is then guaranteed a 10% return on her “contributions”
So twenty years transpires and her $20k times 10 year, or $200,000 should have grown to say $350,000 with accumulated returns.
But, due to the undertarget returns, bad economy, whatever, her account has only $200,000 in it. So the taxpayers now need to put up another $150,000 to make up for the poor investment returns, on the $200,000 that they already paid for.
Gee, I understand that. And if her contract said that the investment bogey was 12% return, instead of a 5% return, the taxpayer would need to pony up an additional $300,000 to make up for undertarget investment returns.
Sure, this doesn’t cost the taxpayer. Perfect sense, that the taxpayers paid deferred income benefit, is guaranteed to return whatever the contract bogey was targeted to, 3%; 5%; 8%, 15%, and if there’s a shortfall the taxpayer pays more; if there’s a windwall, the employee gets the windfall.
Sure, I understand that.
Perfect bargaining sense on September 1, as the kids are supposed to go back to school, and the weak administrators must make a decision - and that decision cannot possibly be STFU teachers!
So, the state, using taxpayer funds, over-pays the teachers, then takes back some of it as “deferred compensation”; then promises to use more taxpayer funds to make up any “sort fall”?
Is that an accurate assessment?
Truth is, 100% of all of it is taxpayer funds.
Why was I thinking it was about them paying into their own HEALTH CARE PLANS? Like a small co pay at doctor’s offices, which they don’t have to do now...?
Nice diversion though.
the taxpayers do not contribute to the public employee pension programs so much as serve as insurers-———
Well it wouldn’t be like taxpayers would have to bail anyone out, eh?
BS deceptive article.
Unless I’m reading the article incorrectly, it seems that the WI taxpayers are even more screwed than I originally thought. Not only do they fund the salaries, healthcare, union dues, and benefits for state workers, but they also must pay for any shortfall in a collectively bargain deferred retirement.
Am I wrong in thinking this. It’s basically taxpayers potentially paying additional interest on what they already are paying to the state union workers. It’s the exact opposite of a private loan, isn’t it?
LMFBO!!!
WHO pays the salary that INCLUDES the "deferred compensation" that is the pension plan??? This is, by far, the most ridiculous and assinine article I have read in years. I cannot believe Forbes actually published this silly nonsense. Wow.. What has happened to Forbes?
/facepalm
Ungar keeps saying that the matching state contribution to both the defined and the optional retirement plans is money that would be paid as salary if the state didn’t do it that way, so the employees are paying 100% anyways. Wait a second. If the state decided NOT to match contributions, would that be a cut in pay? Of course not. It might be a cut in benefits, but it’s not a cut in pay. Just ask the IRS what they tax as income. No, wait...
Right its part of their pay the taxpayers fund.
The taxpayers are gong to reduce that pay..END OF STORY.
On the NRO page, I noted a link with video of the protesters chanting:
‘We Are The Mighty Teachers’!
(Snorf! ROTFL!)
Rick Unger. Another glittering jewel of colossal ignorance.
Would Malcolm Forbes ever have tolerated such utter garbage that this guy has written?
You’ve put into words what I’ve been trying to—I was thinking, “So the money put into the bennies is taxed as if it were salary given to the teacher, huh??”
I’m thinking the same thing, it’s even worse than originally thought, the blogger didn’t do them a favor.
Uh, EVERY dollar that goes to a "public employee" comes from taxpayers. Whether they choose to spend it or use part of it to buy health insurance is irrelevant.
I'm less concerned about their health plans than the fact that they are drastically overpaid compared to private business employees. In time past, government workers made less than private business employees because their employment, benefits and retirement were more certain. That should still be the case.
That is exactly right, what kind of an idiot writes this stuff? So, stop deferring their compensation, and fire them. Hire people who can do the same job for less and do a simple matching 401K plan with a maximum match.
And your post once again shows the problems with public-sector employee unions. They own a lot of Dem politicians. So the contract negotiations are often anything but.
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