Amen brother!

But here is an example to consider. One way to look at it is that “pre-funding” (which creates the asset pool from which interest is earned) is simply a mechanism to change the cash flow pattern between 2 extremes (Lump sum pre-funding of all costs up front, and pay the costs as they occurs with zero pre-funding). Now consider the extreme lump sum prefunding case….. say the promised benefit will be $1 Million payable in one payment 20 years in the future, and assume assets will earn 6%. Then a lump sum of $311,804.73 is required, becuase it would grow over 20 years to the $1 Million at 6% interest. Now suppose the split of costs between workers and Taxpayers is 25%/75% so the workers pay $77.951.18 and the Taxpayers pay $233,853.55. In THIS case you would argue that the Taxpayers’ cost is $233,853.55.

At the other extreme, neither the workers nor Taxpayers pay anything until 20 years hence, and then the workers pay $$250,000 and the Taxpayers pay $750,000. I’m sure, in THIS example you would agree that the Taxpayer PAID $750,000 for the SAME fixed benefit that has been promised the workers.

But how can that “fixed” benefit have 2 different costs ????

Now lets try this ….. we indeed choose to make one one payment at the end of the 20 years, the Taxpayers’ payment being $750,000. But quietly on the side, the Taxpayers (huddle amongst themselves and put $233,853.55 into a 20 year bank CD with a guaranteed return of 6%). Well voila, that $233,853.55 has grown to $750,000 at the end of the 20-th year … of which $750,000-$233,853.55=$516,146.45 is earned interest. Now no one would argue that the $516,146.45 is the Taxpayers’ money since it is in a CD in THEIR name.

So, is there really a difference if they pay the full $750,000 cost at the end or put $233,853.55 in year 1 into a CD and earn $516,146.45 in interest to get to the same $750K, and THEN take it out of THEIR pocket and pay the bill ?

First, I took a look (again) at San Jose salaries and payments. I had glanced at them before, briefly. I will say I was surprised by the number of “captains”, “sergeants”, lieutenants”, “brigade Commander”, ad nauseum, who made well over $100K. Compared to a city like Turlock, makes Turlock look much more reasonable.

I won’t try to justify San Jose, but I also won’t criticize, since I know nothing of the particulars there. (As I recall, they are not in CalPERS, for what that’s worth.)

Yes, I will dispute the “cost” of pensions. “Unfunded liabilities” is one issue. If more money (taxes) is required due to a failure to meet investment goals, this is obviously an extra burden on the taxpayer. Especially in cities, where over 80% of the budget is personnel costs. For the most part, in the past, these changes in costs have averaged out over the years.

However, you seem to be referring to the “income follows principal” as an extra cost on the taxpayer. As I recall, Girard Miller, among others, agrees with you.

Calpers says that, based on figures for 20 years, ending June, 2011: each dollar of pension comes from three sources: 13C from members, 21c from employers (taxpayers) and 66c from investment earnings.
You are saying, as I understand, that 66c, or a good portion of it, is actually also taxpayer money, since it is earned from 21c taxpayer contributions which could otherwise be earning interest in YOUR retirement account.

There I do disagree with you and Mr. Miller. That 21c coming from the employer to CalPERS is part of my compensation. Once the employer has remitted that to CalPERS, the income is following MY principal, not the taxpayers.

You may have a much more valid point on the salaries of some police and fire. I know many of them have increased greatly in the last 10 years. And since pensions costs are a percentage of salary those have increased also.

Top pay step for GED cop is well over $100K in base salary in many if not most cities;

Police Officer ($7,594 – $10,264)= $123K NOT COUNTING the special pay, which increases base pay by up to 50%= $185K not counting benefits, which is eaisly a smuch as the cash salsary= $369K.
http://www.ci.richmond.ca.us/DocumentCenter/Home/View/7936

Around here it means goofball.

The average CalPERS pension is actually less than $30.000.

Once again, the AVERAGE CalTURDS pension with a 30 year trougher who has retired in the last 3 years is $68K, it is much higher for the 20 1937 act local pensions, $86K for Contra Costa.

And another fact: only 2 percent of CalPERS pensions are more than $100,000
FACT: that 2% accounts for 20% of CalTURDS pension expenses. Do the math of when thtat 2% hits 8%, 10%.

BAM!!!!!! Another trough knocked into the last week with the truth.
Steve just got Maviglioised!

Around here it means goofball.

The average CalPERS pension is actually less than $30.000.
Once agaib, the AVERAGE CalTURDS pension with a 30 year trougher who has retired in the last 3 years is $68K, it is much higher for the 20 1937 act local pensions, $86K for Contra Costa.

And another fact: only 2 percent of CalPERS pensions are more than $100,000
FACT: that 2% accounts for 20% of CalTURDS pension expenses. Do the math of when thta 2% hits 8%, 10%.

BAM!!!!!! Another trough knocked into the last week with the truth.
Steve just got Maviglioised!

I have modest concern about their cash pay. It’s their pensions that are WAY WAY too generous. When you factor in the extraordinarily rich formula (which by itself is too generous) and layer upon that full (unreduced) retirement ages in the 50’s and COLA increases, each of these $100K safety pensions would, on the date of retirement, cost $2 Million to buy.

In the Private Sector where formulas are rarely even HALF as generous formula-wise, with no COLAs, and with full retirement ages typically at age 65 (sometimes 62 with long service), a pension with a $2 Million value at retirement would be that of a Private Sector executive making just about $400K annually.

While you will likely dispute this, factually, the workers contributions (including all the investment income earned on those contributions) rarely accumulates to a sum at retirement sufficient to buy more that 10-20% of the promised pension (YES, it’s true) …. with Taxpayers contributions and the earnings thereon responsible for the 80-90% balance. Keep in mind that the investment earnings on Taxpayers contributions would have stayed in the Taxpayers’ pockets (benefiting THEM) in the absence of the need for such high Taxpayers contribution levels.

So call that $400 private sector salary-equivalent a 0.85 (halfway between the 80-90%) x $400K = $340K. Which means that the TAXPAYERS pay for the FULL cost of a safety worker’s pension equivalent to that of they typical Private Sector executive making about $340.

Yes, I would say that that’s unnecessary (to attract and retain a qualified workforce) and is grossly unfair to Taxpayers who pay for it.

And let’s not forget the HUGE healthcare subsidies for people retiring in the 50’s …. easily worth several hundred thousand dollars for a husband and wife.

CalPERS shows that in 2011 the average retirement for CHP was $7,718 per month. Average public agency safety retirement was $7,059. Clearly a lot of law enforcement and firefighters receive less than $100,000.

They also show about 1,500 new pensions in 2011were over $100,000, and about 2/3 of those were state or local safety retirees.

If the average safety retirement is under $100,000, I must assume those 1,000 new $100K pensioners were in the upper ranks.

I’m not sure what you’re point is, though. Is it that these guys are paid too much, or their pensions are excessive, or both?