Reminds me of a study many years ago which concluded that chocolate was good fore your teeth. If I recall correctly, it was funded by a chocolate candy company (Mars, I seem to recall).

And yes, I know this stops digging the financial hole we are in from getting deeper but doesn’t address the unfunded liability for PAST service accruals.

And that can be split into 2 groups ….. those already retired, and the Past service of current actives. Cities and towns in the most desperate situation may need to reduce some of these promises. Obviously it’s better to be more careful with the treatment of those already retired as their choices are more limited (e.g., working a few more years). As to those still active, if past service accruals must be reduced, I’d look to reverse past retroactive enhancements first, and then (if legal) look the introduce a sliding scale of reductions with the greatest reductions associated with the largest pensions.

While 37% of voters thing benefits for local and state government workers are excessive, 36% say they are about right. Some 17% think the benefits are not generous enough.

The poll found that 67% of voters support establishing an upper limit or salary cap when calculating pension benefits.

But a plurality of 50% of voters oppose linking deficit reduction efforts to taking away collective bargaining rights for public workers, the Field Poll found.

Dave Low, chairman of Californians for Retirement Security, said the poll indicates to him that there is strong support for common-sense improvements to end abuses “but not for a dramatic overhaul that will undermine collective bargaining.”

(LA Times July 10, 2012)
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Sigh!

Obviously I understand that the percentage the taxpayer contributes is not fixed. Why else would I say the percentage is about 19% PRESENTLY ? The employers percentage was zero, or near zero, at the beginning of this century. It is due to be REDUCED in the next year, Ironically, the reduction is due to:

” The lower dollar cost of pensions is a result of a drop in payroll, lower than expected salary increases and additional member contributions required by AB 340.”
…………..
Let’s hear it for “common-sense improvements to end abuses “but not for a dramatic overhaul”

And for the glass that is still at least half full.

Of course no such terminology is included.

And for the range of pension formulas in CA, TOTAL (EE + ER) level annual contributions of 30-60% of pay are necessary to fully fund the promised pensions over the working career of the employee. Obviously Safety workers are at the higher end, requiring about 60% of pay.

And those percentages are just to fund the Normal Cost. ADDITIONAL contributions are necessary to amortize unfunded liabilities.

Compare these %s to what Private Sector workers typically get … the employer’s 6.4% contribution toward Social Security and another 3-5% into a 401K Plan.

It’s not very hard to see that Public Sector Pension Plans are GROSSLY EXCESSIVE, just by looking at the true cost.

If I may correct you, there is ONE source of contributions. Ultimately, it all comes from the taxpayer.

The workers wages come from the taxpayer. A portion of those wages (10% in my case) is contributed to CalPERS. An additional amount ( about 19% presently, in my case) is contributed as per contractual agreement.

The 10% and the 19% are BOTH part of my “total compensation”. ( both from the taxpayer)

My “total compensation” which Briggs and Richwine concede are “roughly equal” to private sector total compensation.

My wages, my compensation, ergo MY principal, MY interest.

My glass is at least half full.

Yours is probably more full than you realize.

With that as the backdrop, for the VERY TYPICAL Public Sector worker, if you accumulated all of their pension contributions and accumulated them with investment earnings (at an annual rate consistent with a balanced portfolio in the year of contribution), rarely would the accumulated sum on the date of retirement be sufficient to buy more than 10%-20% of the VERY generous promised pensions. Go ahead, try it. Create a spreadsheet with your own contributions and see what the accumulated sum at retirement would buy.

The 80%-90% remainder is the responsibility * of the Taxpayers (their contributions and the investment earnings thereon …. just like in your case). The BIG chunk of earnings, arises ONLY from those big taxpayer contributions and only because your promised pensions are excessive (by any and all reasonable metrics). And in the absence of those excessive pensions, not only would the Taxpayer contributions be much lower, but the earnings on those contributions would have stayed in the Taxpayers’ pockets, to perhaps to fund their much smaller pensions.

* Above I said that Taxpayers are “responsible” for. I didn’t say they are paying that full 80%-90% share. They haven’t been (because it’s unaffordable without unacceptably high taxes or unacceptably low services), and they won’t be for the same reasons. Not sure when, but there is a very high probability that these Plans will not pay out anywhere near what has been promised. Detroit is now entering that door. Many will follow,

Greed DOES have consequences.

The fact is that the RAGWUS feeders are over compensated at every turn by at least 50%, let the cutting begin. 🙂