OT: The system is broken.

[BobbyJones]

Thanks to a link in the "Slightly OT: sheriff kills ex COO of Napster while biking" thread, I just spent some time browsing through this site about public salaries in CA. (https://transparentcalifornia.com/salaries/search/?q=Fire+Captain-56+Hour&y=2017&page=1).

I can't be the only one who thinks something "just isn't right"?

Some amazing $$$ figures. God bless America.

[fiamme red]

I can't be the only one who thinks something "just isn't right"?Wow, those are some amazing overtime numbers.

And how about this physician assistant (https://transparentcalifornia.com/salaries/2017/state-of-california/rafael-f-miranda/)?

Regular pay: $91,470.50
Overtime pay: $311,720.68

[54ny77]

holy toledo.

[verticaldoug]

Wow, those are some amazing overtime numbers.

And how about this physician assistant (https://transparentcalifornia.com/salaries/2017/state-of-california/rafael-f-miranda/)?

Regular pay: $91,470.50
Overtime pay: $311,720.68

A lot of this leads into what is known as pension spiking. Your final pension is set on the last few years on your total salary including overtime.

If the above assistant can do this the final two years before retiring, her pension will be calculated on $392,000 and not the regular salary of 91,470. In this case, her pension post retirement will be larger than her regular salary.

The only way this can happen is the direct supervisors and entire chain of command turn a blind eye to this with a wink and a nod. Just shows the system is corrupt.


This abuse happens across all areas of public employees and is leading to the eventual inability to pay anything but pensions out of state and municipal budgets.

[dddd]

For this to be corruption suggests that the recipient is somehow in cahoots with those that "turn a blind eye" to the pension-spiking, a trusted collaborator in other words(?).

Sort of makes an argument FOR privatized insurance(?), where the corporation would lose money from such practices and thus be expected to prevent them.

[verticaldoug]

They are not in cahoots as much as if has become the 'group' practice to game the system. Why do you want to prevent your people from having a better pension for retirement? Gaming the system happens in all sorts of industries to benefit insiders- look at high frequency trading on wall street and various other practices. You can look at the LIRR Retirees and disability claims. Both cases of flaws in the system being exploited by insiders.

[paredown]

I thought this was a NY story--pension bumping is rampant--and a people can leave and come back as contractors and collect their pension at the same time--double dipping.

Full paid medical/dental, and no state taxes on your state pension.

Nice work if you can get it.

We have a public interest web site, and for fun I just opened--top figure is somebody from City College NY whose pension benefit is a whopping $562,000/yr.

http://seethroughny.net/pensions/80293704

[smontanaro]

Doesn't the problem begin with misaligned incentives between the public sector unions and the politicians they negotiate with? Among other things, politicians care about holding down short term costs (appearing fiscally responsible help her rejected). The PSUs are likely willing to give up some salary for a better overall benefits package, including, but not limited to, better pension benefits, part of which includes a game-able pension calculator. The politicians will long be out of office by the time the piper needs to be paid.

[lonoeightysix]

hire more people. that amount of OT is created by a lack of roster strength.

those guys in the firehouses are never going home. that's what it takes to keep engine, ladder, rescue, and ambulance companies in service. asses in seats.

[smontanaro]

Hiring more people increases short term costs at least as much as paying overtime, since you take on the full benefits package for a new hire, not just a few bucks in overtime pay. Also, while it's egregious, I suspect most people don't actually game the system as badly as the examples might imply.

[rustychisel]

Hiring more people increases short term costs at least as much as paying overtime, since you take on the full benefits package for a new hire, not just a few bucks in overtime pay. Also, while it's egregious, I suspect most people don't actually game the system as badly as the examples might imply.


Well, insofar as the original post points to a sample of one, what is the argument?
One bad apple?
Many bad apples?

[smontanaro]

How about "enough bad apples"? :) In fact, if the system is set up to be gamed, who's fault is that?

It's a complicated system. It's not just the bus driver/fire captain/physician's assistant who works ungodly amounts of overtime the last few years before retirement (*). If someone is employed in the public sector at an early enough age, they might retire before age 50 with a full pension having never worked an hour of overtime, then go on to a second career, drawing a full pension and a second salary (then perhaps a second pension when they retire from that job). Pension calculations may not have taken into account as many people drawing a normal (not bloated) pension for an extra 15 years or so.

Add to that the entire calculations of how much need to be contributed is gamed by the politicos. They may well make unreasonable assumptions about rate of return on the pension fund investments to justify funding at lower levels.

It's taken decades to get into the multiple public pension messes our states are in. (The OP's message was about CA. Other people mentioned NY. I live in IL, which has similar problems.) Fixing them isn't going to be easy. There is more than enough blame to go around.

Maybe it's more like a death of a thousand cuts.

(*) BTW, though it has other problems, Social Security doesn't suffer from this end-of-career overtime problem. Its formula takes into account your lifetime compensation, not just the last few years of your career. So, it's not like a fix to this particular problem isn't known. It's largely the lack of political will necessary to make it happen.

[Mikej]

The system only SEEMS broken for those who are not part of it. Looks to be working freakin awesome for those that ARE a part of it. This thread reminds me of an annual shareholders meeting at Harley, where somebody questioned the CFO on his salary, his response was "well, I chose CFO, that is what the pay was, if you want to make a certain amount of money, you need to choose a job that pays that much money" Guess we need to choose better is the moral of the story.

[jlwdm]

How about "enough bad apples"? :)

(*) BTW, though it has other problems, Social Security doesn't suffer from this end-of-career overtime problem. Its formula takes into account your lifetime compensation, not just the last few years of your career. So, it's not like a fix to this particular problem isn't known. It's largely the lack of political will necessary to make it happen.

Plus it maximizes the amount of earnings that are counted every year.

I am surprised anyone is saying anything in support of the practices shown by the thread starter.

Jeff

[verticaldoug]

How about "enough bad apples"? :) In fact, if the system is set up to be gamed, who's fault is that?

Add to that the entire calculations of how much need to be contributed is gamed by the politicos. They may well make unreasonable assumptions about rate of return on the pension fund investments to justify funding at lower levels.

Maybe it's more like a death of a thousand cuts.

(*) BTW, though it has other problems, Social Security doesn't suffer from this end-of-career overtime problem. Its formula takes into account your lifetime compensation, not just the last few years of your career. So, it's not like a fix to this particular problem isn't known. It's largely the lack of political will necessary to make it happen.


The return assumptions is another huge debacle. The lifetime compounding differences that emerge between assumed and real are amazing. Currently Calpers is at 68% funding, they lowered their expect returns for the next decade from 7.5% to 7%. Meanwhile the fund returned 4.4% over the past decade.

A couple billion in slippage here, a couple billion of slippage there, and pretty soon it is real money.

[Climb01742]

Shall we make a list of every financial system gamed for someone’s benefit?:banana:

[54ny77]

^^theres not many that we taxpayers pay for directly.

Some of those figures r astounding. A half mil a year in pension is a staggering amount of money.

The gaming system happens at the federal employee level also. Have a pal who works for a particular agency and the game people play is to get transferred to a high living cost region the last 5 years of expected career window (which triggers an automatic COL increase), then presto, higher baseline from which pension calc is made.

[ergott]

^^theres not many that we taxpayers pay for directly.


It becomes our money when our money pays for bailouts and tax breaks for those that don't pay into the system because they "know" the system.

[dbh]

^^theres not many that we taxpayers pay for directly.

Some of those figures r astounding. A half mil a year in pension is a staggering amount of money.

The gaming system happens at the federal employee level also. Have a pal who works for a particular agency and the game people play is to get transferred to a high living cost region the last 5 years of expected career window (which triggers an automatic COL increase), then presto, higher baseline from which pension calc is made.

Yes, as a former fed, that's possible, but by and large with the Federal Employee Retirement System, you're not going to see the massive pension payouts that you get at the state or local level. The Reagan administration reformed the civil service pension system, and most federal pensions under FERS are quite modest. The bulk of what I'll receive will come from the Thrift Savings Plan, the fed's equivalent of a 401K. The pensions under the old system, CSRS, were much more generous, but it was fazed out for new employees starting in the early 1980s.

Living in the Boston area, I am shocked at the scale of state pension payouts, which get inflated by massive OT. The state police is in the midst of a huge scandal on OT payouts with officers making triple their base salary: https://www.bostonglobe.com/metro/2018/03/25/state-police-pay-higher-than-reported-data-hidden-for-years/pl9kAs38FTIy4pOydr08bJ/story.html


As someone who began his career in federal government, I shake my head at these state and local pension plans. The fed system really should be a model for state and local government employee pensions. There's a reason we don't talk about a federal government pension crisis. It's because by and large the pensions are more modest and the system is better managed (the postal service excepted as that is a different system). Am I going to retire with a six-figure defined benefit payout? No. It's not like I'm going to retire poor either.

Without getting too political, but as a taxpayer and someone who believes government is inherently a good thing, it bothers me when a huge portion of government spending goes to cover inflated pensions instead of supporting social welfare, education, or public safety programs today. At the state and local level at least, I see this as an area where Dems and Repubs can come together to do something about the system. It's in no one's interest (unless you are one of those lucky few getting an amazing deal on your pension) to keep pouring ever-increasing amounts of money down the pension hole at the expense of everything else (be it increased government social spending or tax cuts).

[nicrump]

I'm moving to Cali with my mop bucket.

https://transparentcalifornia.com/salaries/search/?q=janitor&y=

[Vientomas]

Unsustainable...

https://www.usatoday.com/story/money/economy/2018/04/12/many-state-pension-systems-huge-funding-gaps-report/511159002/

[zennmotion]

I'm moving to Cali with my mop bucket.

https://transparentcalifornia.com/salaries/search/?q=janitor&y=

As someone with a recent mortgage in Cali, you'd be better off staying where you are and commuting with your mop. With airfare it would work out if you are OK sleeping in the boiler room of the building.

[jet sanchez]

Isn't the problem that the pension funds are being mis-managed? I pay into a pension that has billions of dollars of assets that, on average, sees an annual return of 4%. The fund has never lost money in close to 100 years of activity.

I do work for the government but, thankfully, the pension is not managed by the government and in fact I believe there are all sorts of rules that will not allow the government to access any of the pensions' funds.

[BobbyJones]

A lot of the conversation here has revolved around the pension benefits. What initially caught my eye is the outstanding OT some people are pulling in addition to decent salaries. 2.5x (+-) of a salary in OT? How does that happen? That money comes from somewhere.

I don't fault the individual for maximizing the potential while working within the system (any system for that matter), hence the "system is broken" title.

My God Bless America comment wasn't sarcasm. I think it's wonderful. Not so much when I write checks to the government every quarter, especially for the perceived benefits in return.

[AngryScientist]

As someone with a recent mortgage in Cali, you'd be better off staying where you are and commuting with your mop. With airfare it would work out if you are OK sleeping in the boiler room of the building.

i think this, said in jest, i understand - actually points to another huge problem in California, as well as a bunch of other metro areas.

real estate prices are so absolutely out-of-control high - people's pay has to be high, or no one can afford to live there.

it's a complicated discussion, and "gaming" they system aside - shouldn't a janitor who's been working full time for 20+ years be able to afford to own a home in the county he works?

it's a big, complicated mess IMO.

[nicrump]

i think this, said in jest, i understand - actually points to another huge problem in California, as well as a bunch of other metro areas.

real estate prices are so absolutely out-of-control high - people's pay has to be high, or no one can afford to live there.

it's a complicated discussion, and "gaming" they system aside - shouldn't a janitor who's been working full time for 20+ years be able to afford to own a home in the county he works?

it's a big, complicated mess IMO.

Mortgages in Austin are not far behind you guys. I assure you no county employed janitor in Travis county makes better than $60k all in. Perhaps his manager but not the guy cleaning toilets.

[cmbicycles]

Wow, those are some amazing overtime numbers.

And how about this physician assistant (https://transparentcalifornia.com/salaries/2017/state-of-california/rafael-f-miranda/)?

Regular pay: $91,470.50
Overtime pay: $311,720.68

Funny thing is as you scroll down the list of huge overtime numbers it seems that it mostly comes from correctional facilities. I would also be curious to know what the "other pay" category covers. I would think that the simplest way to prevent pension spiking is that you would base pension off of regular salary... not salary + OT... or do away with the pension and switch to a 401k or similar. I'm not in the financial field, so there is probably more to it than that simple "logic".

[verticaldoug]

Isn't the problem that the pension funds are being mis-managed? I pay into a pension that has billions of dollars of assets that, on average, sees an annual return of 4%. The fund has never lost money in close to 100 years of activity.

I do work for the government but, thankfully, the pension is not managed by the government and in fact I believe there are all sorts of rules that will not allow the government to access any of the pensions' funds.

A bit of both. The problem is the fund returns 4% on average but is funded like it will return 7 or 7.5%. Hence, CALPERS targets 7% returns for the next 10 years, while the previous 10 average 4.4 while they are budgets for 7.5

Start at 100 year 1, 107 year 2 and 114,49 year 3
but you really at 104 year 2 and 108.16 year 3. under perform for 20+ years of compounding and you have a large underfunded pension. Hence CALPERS currently at 68%.

The irony here is if your pension manager did a spectacular job for a period of time, chances are the state would rachet up expections on budgeted returns and cut contributions. Eventually leading to the underfunded problem again.

[longlist]

i work for the gsa. the system is very very broken.

[bigbill]

I served 27 years in the military and retired as an O-4. I get a pension based on 67.5% of my base pay. I retired because I couldn't physically continue to serve, it's a young man's game and 47 is old. I started a second career as an engineer working 40 hour weeks with some occasional 12 hour shifts for projects. I was salaried so whether I worked 40 hours or 80, my pay didn't change. I was comped days off. I left that job last month after six years with a nice severance package. All I have to show from that job is savings and a decent 401 balance. I'll get another job in the next few months. I don't need to make much to close a gap. My son got into the Naval Academy, that helps.

My retirement pay comes out of the service budget and honestly, the system had to change. Back in the day, people would die within 5-10 years of retiring because the lifestyle while in the military (heavy smoking, drinking, fat) would literally kill you. All that changed in the late 80's with a focus on health. People stopped dying in their 40's after retiring at 38 with a 50% pension. Nowadays there's every expectation of a normal life span. That forced some changes because the current system was not sustainable.

[redir]

I wonder if the people whose neighborhoods were saved by the local fire departments go online and vent about how much they make for a living?

[fiamme red]

http://www.latimes.com/projects/la-me-pension-crisis-davis-deal/ (2016 article)

...This year, state employee pensions will cost taxpayers $5.4 billion, according to the Department of Finance. That’s more than the state will spend on environmental protection, fighting wildfires and the emergency response to the drought combined.

And it’s more than 30 times what the state paid for retirement benefits in 2000, before the effects of the new pension law, SB 400, had kicked in, according to data from the California Public Employees’ Retirement System...

[joosttx]

I wonder if the people whose neighborhoods were saved by the local fire departments go online and vent about how much they make for a living?

Truth

[FlashUNC]

There's been some discussion of this locally given the overtime BART and Muni janitorial staff are getting as a result of the demands of keeping the stations clean.

Honestly, you go through Civic Center and see what happens there, the janitors earn every penny as far as I'm concerned. But yes, also symptomatic of a number of factors: People gaming the system for pension/retirement. Lack of staff and ability to hire, etc etc.

[bigbill]

There's been some discussion of this locally given the overtime BART and Muni janitorial staff are getting as a result of the demands of keeping the stations clean.

Honestly, you go through Civic Center and see what happens there, the janitors earn every penny as far as I'm concerned. But yes, also symptomatic of a number of factors: People gaming the system for pension/retirement. Lack of staff and ability to hire, etc etc.

In my last job we had an engineer shortage for two years. It was a cost savings to not hire replacements for normal attrition. As a result the existing engineers worked longer hours for salary. When a Voluntary Separation Program came out earlier this year, the company lost a large percentage of their remaining engineers. Unfortunately, short sighted practices contribute to the problem.

[stackie]

I wonder if the people whose neighborhoods were saved by the local fire departments go online and vent about how much they make for a living?

Well, when a physician saves their life, they do. Why not?

Anyone use the CA state transparency site to look at who the highest paid state employees were? Coaches. Several over 3 million. Shows where our priorities are.

Jon

[BikeNY]

I'm sure I'll get flamed here, but yes, the current systems are severely broken.

How is it sustainable to pay somebody a pension of 67.5% of their salary for 40 years after they retire at 50? And it's tax free? And they then go get another job and still get full pension?

While the private sector works until they're 70 and 75% have no retirement savings.

Oh yeah, it's not sustainable. It needs to be drastically changed. But that's impossible because not politician would dare try to pass a law like that.

broken indeed...

[bigbill]

I'm sure I'll get flamed here, but yes, the current systems are severely broken.

How is it sustainable to pay somebody a pension of 67.5% of their salary for 40 years after they retire at 50? And it's tax free? And they then go get another job and still get full pension?

While the private sector works until they're 70 and 75% have no retirement savings.

Oh yeah, it's not sustainable. It needs to be drastically changed. But that's impossible because not politician would dare try to pass a law like that.

broken indeed...

Military retirement is not tax free. I get a 1099R every January that I use to prepare my return. And the system did change as of 1/1/2018. http://militarypay.defense.gov/BlendedRetirement/

Google is your friend.

[colker]

I'm sure I'll get flamed here, but yes, the current systems are severely broken.

How is it sustainable to pay somebody a pension of 67.5% of their salary for 40 years after they retire at 50? And it's tax free? And they then go get another job and still get full pension?

While the private sector works until they're 70 and 75% have no retirement savings.

Oh yeah, it's not sustainable. It needs to be drastically changed. But that's impossible because not politician would dare try to pass a law like that.

broken indeed...

Not only in the US... a LOT of big economies will crumble down because of state sponsored retirement pensions.
Politicians w/ any plans of cutting or changing the system just don´t get elected!
Voters want their free lunch. We will end up w/ chaotic broken nations.
Brasil is on the line w/ a huge hole created by the retirement pensions of civil public servants who retire w/ FULL salaries. We are talking 10k salaries, sometimes 30k salaries.

[verticaldoug]

I wonder if the people whose neighborhoods were saved by the local fire departments go online and vent about how much they make for a living?

Uber does this. Airlines do this. It's called surge pricing. Pisses people off.

Being thankful a fire department did their job and disapproving of pension spiking as an abuse of the system are not mutual exclusive.

Police use this argument all the time. Its total B.S.

[verticaldoug]

In my last job we had an engineer shortage for two years. It was a cost savings to not hire replacements for normal attrition. As a result the existing engineers worked longer hours for salary. When a Voluntary Separation Program came out earlier this year, the company lost a large percentage of their remaining engineers. Unfortunately, short sighted practices contribute to the problem.

But Bill, the military is the great exception since Congress refuses to raise your wages to market rates, overtime and pension spiking are not options.

[vav]

Well, when a physician saves their life, they do. Why not?
Anyone use the CA state transparency site to look at who the highest paid state employees were? Coaches. Several over 3 million. Shows where our priorities are.
Jon

I read somewhere (googling it as we speak) that in 48 states the highest paid public employee is the football coach of the state university system.

[m4rk540]

I wonder if the people whose neighborhoods were saved by the local fire departments go online and vent about how much they make for a living?

My smallish city averages one residential fire yearly. While in California, it's not a developed hillside which has burned for millennia. Smarter planning and modern wiring. What a concept.

[BobbyJones]

How is it sustainable to pay somebody a pension of 67.5% of their salary for 40 years after they retire at 50?....


It's probably sustainable if you're paying 67.5% of the salary the position is on the books for. However, start paying out double that due to the killing they've already made in OT....

[Lewis Moon]

I work for a State government. I take home less than 60% of what I would in the private sector. I often work 60-70 hour weeks and sometimes 20+ hour days. I make sure the water your child plays in and the fish you eat are safe. I have a college education and am acknowledged as an expert in my field.
I make $45 k/year. I don't get overtime. I don't even get compensatory time.

The fact that I love my job and have a good pension is a part of my compensation package.

If you want to rail at some injustice, look toward State governments raiding adequately funded retirement systems to give upper income folks and corporations more tax breaks.

[BobbyJones]

http://www.latimes.com/projects/la-me-pension-crisis-davis-deal/ (2016 article)


and further:

By far the largest group of state workers — office workers at the Department of Motor Vehicles, the Department of Social Services and dozens of other agencies — contributed between 5% and 11% of their salary in 2015, and the state kicked in an additional 24%. To fund their more costly benefits, Highway Patrol officers contributed 11.5% of pay and the state added 42%.

Amazing! Almost a 4x match with no limit!

[bigbill]

But Bill, the military is the great exception since Congress refuses to raise your wages to market rates, overtime and pension spiking are not options.

My last job was in the private sector as a Process Engineer. The company had a restructuring and wanted 5K salaried people gone world-wide. There was a disproportionate number of engineers that took the VSP and now the company is pushing back capital projects because they can't be supported.

The only thing I had to pay attention to in the military was my High 3 years for retirement. To retire as an O-4, I had to spend at least 3 years in that pay grade before retiring. I was a Mustang, prior enlisted so I didn't become an officer until I had already served 15 years. Now that has changed with the new system.

[Climb01742]

It’s easy to pick on public sector unions. Why? They’re public. Their numbers are public. Versus so many privately held companies and financial services firms. All their shenanigans happen in the dark. What’s really gamed? The tax code. Look at the tax codes for hedge funds. Look at how income vs investments are taxed. Not saying public funds aren’t misused but they’ve become whipping boys by folks whose cheating happens in the dark and gamed by lobbyists. Let’s just dish out outrage evenly.

[Lewis Moon]

It’s easy to pick on public sector unions. Why? They’re public. Their numbers are public. Versus so many privately held companies and financial services firms. All their shenanigans happen in the dark. What’s really gamed? The tax code. Look at the tax codes for hedge funds. Look at how income vs investments are taxed. Not saying public funds aren’t misused but they’ve become whipping boys by folks whose cheating happens in the dark and gamed by lobbyists. Let’s just dish out outrage evenly.

Yep.

[slowpoke]

It’s easy to pick on public sector unions. Why? They’re public. Their numbers are public. Versus so many privately held companies and financial services firms. All their shenanigans happen in the dark. What’s really gamed? The tax code. Look at the tax codes for hedge funds. Look at how income vs investments are taxed. Not saying public funds aren’t misused but they’ve become whipping boys by folks whose cheating happens in the dark and gamed by lobbyists. Let’s just dish out outrage evenly.

Exactly.

I'm not gonna give a janitor, or any other service worker, flak for getting $200,000 while working overtime. It's clear the person busted their ass or the scheduler messed up.

Now the "management consultants" than fly in, give a lecture and "restructure" a company while charging $200/hour (minimum)? F-them. They charge their extravagant expenses to their clients, and can't explain to you in 5 minutes what they do exactly other than "optimize" and "consult".

[GregL]

Exactly.

I'm not gonna give a janitor, or any other service worker, flak for getting $200,000 while working overtime. It's clear the person busted their ass or the scheduler messed up.

Now the "management consultants" than fly in, give a lecture and "restructure" a company while charging $200/hour (minimum)? F-them. They charge their extravagant expenses to their clients, and can't explain to you in 5 minutes what they do exactly other than "optimize" and "consult".
As a taxpayer, I can't agree with your sentiment. While I agree that all public workers should be fairly compensated (both during their working lives and in retirement), I feel that the use of excessive overtime to boost pensions is nothing short of ridiculous. In most cases, it is a result of union contracts that grossly favor the unions. Elected officials won't stand up against these contracts because it will cost them votes. It's a very real problem here in NY state. A co-worker of mine was a county legislator. He despises these contracts, but felt he couldn't do anything effective to stop them.

Greg

[redir]

I work for a State government. I take home less than 60% of what I would in the private sector. I often work 60-70 hour weeks and sometimes 20+ hour days. I make sure the water your child plays in and the fish you eat are safe. I have a college education and am acknowledged as an expert in my field.
I make $45 k/year. I don't get overtime. I don't even get compensatory time.

The fact that I love my job and have a good pension is a part of my compensation package.

If you want to rail at some injustice, look toward State governments raiding adequately funded retirement systems to give upper income folks and corporations more tax breaks.

My dad was an engineer with the GSA and while he got a descent retirement he's not exactly sailing the 7 seas on his yacht either.

BTW I followed the money on that website and sure enough my suspicion was correct in that it was funded by Koch style anti-government libertarian think tanks. ;)

I'm not saying that's necessarily a bad thing, we need check and balances on government just as much as we do on industry. But I just KNEW it, if ya know what I mean.

[joosttx]

My dad was an engineer with the GSA and while he got a descent retirement he's not exactly sailing the 7 seas on his yacht either.

BTW I followed the money on that website and sure enough my suspicion was correct in that it was funded by Koch style anti-government think tanks. ;)

I'm not saying that's necessarily a bad thing, we need check and balances on government just as much as we do on industry. But I just KNEW it, if ya know what I mean.

It’s not correct. At least the ones they do for teachers in California.

[Spaghetti Legs]

Military retirement is not tax free. I get a 1099R every January that I use to prepare my return. And the system did change as of 1/1/2018. http://militarypay.defense.gov/BlendedRetirement/

Google is your friend.

And I will add Bill, as you mentioned in your earlier post, that your pension is calculated on base pay. My guess is at retirement, your base pay was about 2/3 or less of your paycheck. Military pay has additional components for housing, food, combat pay, sea duty, etc. This is different than the state pensions at issue. To my knowledge it is extremely rare for a military retiree in his/her 40's early 50's to not have to find a new job to supplement the pension.

Different ball of wax - 27 years of deployments, new home every 3-4 years, *no overtime pay*.

[zap]

Many US state and local systems are not sustainable. Some state pension systems are only 35-40% funded and are not getting any better.........and if the stock market returns moderate watch out. Some states are also close to hitting a tax "ceiling", the level when residents say enough and leave.

My concern is that this will be the next financial crisis which will affect more people........retired or soon to retire state employees.

[parris]

Zap that tax ceiling has pretty much been hit here in NYS. I know many people that have left over the last 5 years due to high taxes, surcharges, etc. When my wife and I retire we'll leave as well.

[jlyon]

Every pension and company will eventually fail just like every government has.

The question is when.
Shouldn't everyone be paid for the work they do at the time they do it?
Promising future benefits for your work just seems like a way to dodge paying current market value both too much and too little.

Is a level paying field something to be strived for or is eliminating all pensions a really bad idea?

[buddybikes]

Public pensions stink - us taxpayers are funding their cushy retirements.

This coming from a "screaming liberal" who wants public programs. All I know - I ain't getting crap from my employer, and most of us aren't either.

[earlfoss]

Public pensions stink - us taxpayers are funding their cushy retirements.

This coming from a "screaming liberal" who wants public programs. All I know - I ain't getting crap from my employer, and most of us aren't either.

Get mad at your employer then... And the state workers too if you feel that helps.

[buddybikes]

...call it frustration as I am closing in on retirement. Funding wise fine, but healthcare - public retirement get the golden paracute, general public get the crumbs. Once script for me, one f'ing script (I take 10) is 250.00 mth... copay, my sister on state retirement - 25.00

[paredown]

Zap that tax ceiling has pretty much been hit here in NYS. I know many people that have left over the last 5 years due to high taxes, surcharges, etc. When my wife and I retire we'll leave as well.

Yes--true for a lot of people we know as well. We found that when we were campaigning, a lot of people were not interested in local politics/issues, since they already had one foot out the door, and were not planning on staying in NY once they retired.

Except for state employees, since their state pensions are not taxed in New York state, so there's an advantage for maintaining a residence here.

Our current property taxes are about 5x what they were in NW Arkansas, and about 2.5x what they were in Seattle for a comparable house, and New York has the added advantage of high sales tax, high gasoline tax, high state taxes--and you still have to pay high tolls to drive the toll roads, bridges and tunnels. It is not where you want to be with a modest pension.

[notsew]

It's with pointing out, many, if not most public pensions aren't quite as stupid as California's. The well run ones are pretty reasonable. The employees pay a fair share and the promise of the pension is part of the overall compensation package. In the private sector you just get the cash. We forego that income for future stability. Pensions could easily exist elsewhere but our economic structure rewards firms that minimize the compensation of their workers. I think government should be better.

That said, places like Cali and illinois are ****ed and taxpayers and current workers are holding the bag. Maybe, at some point the unions will recognize that and capitulate, if not, we'll see massive forced restructuring and the equivalent of state bankruptcy. it's inevitable.

Also, no matter where you live, no matter the size of your town, I can virtually guarantee your firefighters are your highest paid municipal employees. And every time they hire one position, 500 people apply. Bit of a disconnect between supply and demand. But their unions are well organized and maintain the moral high ground.

Somebody made a comment about coaches being the highest paid state employees. That's true to, but they are net revenue generators which is a bit easier to swallow. I mean except the bit where states don't pay the people who folks actually pay to see...

[93KgBike]

...states don't pay the people who folks actually pay to see...
That's right - it's the "students" that generate the revenue. They do get free room and board, and a "degree". As long as they don't get hurt, or cut.

It's amazing to live in a world where a sheriff makes more than a doctor or a teacher, and a coach makes millions of dollars off the backs of children. Yeah, the system might be broken, alright.

[Mr. Pink]

I wonder if the people whose neighborhoods were saved by the local fire departments go online and vent about how much they make for a living?

Hmmmmm. Sounds like a form of blackmail to me. Or, a protection racket? I can almost see a fat guy in shiny suit with a cigar in his hand. " Youse guys like your nice little neighborhood?"

[Mr. Pink]

I blame 9/11 for a lot of this. It was bad before that incident (I remember reading an article about a police chief in Rockland county, NY, making a half million, and four of his immediate underlings making close to that. And, trust me, there's no crime to speak of in New City). Now our culture is saturated with military and "first responder" jingoism, and woe to a politician or citizen who criticizes pay and "support" for cops who only hand out traffic tickets and try to keep domestic disputes discreet, like the life in my upscale suburb, where the police actually, and this has been documented over and over, cost the taxpayer more money in retirement than when they were working, if they live to a normal age at death.

[redir]

Hmmmmm. Sounds like a form of blackmail to me. Or, a protection racket? I can almost see a fat guy in shiny suit with a cigar in his hand. " Youse guys like your nice little neighborhood?"

I guess we could privatize everything and then if you get royally screwed over then all ya gotta do is sue. But then that leaves our the people who don't have the money to pay the fire brigade. Just screw 'em?

I'm imagining the 'Fast and Fury Fire Service Co.' showing up to your house fire and you having to run your credit card through a machine before they get to work :D

If anything, in my moderately liberal view point, government services were designed exactly to prevent the protection racket. I mean yeah you got to pay into it and the far right Libertarians will argue that if you don't then guys with guns will put you in a cage but it's on a sliding scale to help those who are less fortunate.

[unterhausen]

there are lots of places with private (or pay to spray) fire departments. It stinks, but hey, low taxes. Not hard to find stories of fire departments showing up and watching a building burn because the owner didn't pay. Sounds heartless, but someone has to pay, and if you can just write them a check when they fight your fire, then there will be no fire response for anyone.

It does seem that a defined benefit pension that is calculated on high-3 or similar is bound to fail. Probably needs a modifier based on the amount of employee contributions.

[FlashUNC]

Somebody made a comment about coaches being the highest paid state employees. That's true to, but they are net revenue generators which is a bit easier to swallow.

Net revenue generators for who? Athletic departments?

Not exactly a huge public good there unless you're counting the bread and circuses bit.

[notsew]

Net revenue generators for who? Athletic departments?

Not exactly a huge public good there unless you're counting the bread and circuses bit.

Absolutely agree, only pointing out that the tax payer doesn't necessarily pay their salary in the same way that you pay for at Fire Captain. There's offsetting revenues.

(and they do help support less popular sports in a lot of cases, whether that is a good or not depends on your worldview)

[Mr. Pink]

I guess we could privatize everything and then if you get royally screwed over then all ya gotta do is sue. But then that leaves our the people who don't have the money to pay the fire brigade. Just screw 'em?

I'm imagining the 'Fast and Fury Fire Service Co.' showing up to your house fire and you having to run your credit card through a machine before they get to work :D

If anything, in my moderately liberal view point, government services were designed exactly to prevent the protection racket. I mean yeah you got to pay into it and the far right Libertarians will argue that if you don't then guys with guns will put you in a cage but it's on a sliding scale to help those who are less fortunate.


Well, on the other hand, there is the phenomenon of people building homes in Stupid Zones. That's a label that a columnist for the Denver Post by the name of Ed Quillen gave to places that really shouldn't have homes in the first place. Colorado has plenty. MacMansions deep in dry, fire prone forests, far from help, or, at the bottom of hills that could easily landslide during a heavy storm. Just today I read an article in the NYT about how affordable RE is in the area in Hawaii that is now filling up with fresh lava. Well, duh, but, some of these homes were built on lava flows that occured just twenty years ago. And yet, they keep on coming back, much like SF was rebuilt in short time after the '06 earthquake. So, his argument was, yeah, sure, let them live wherever they want, but, cut off all emergency services beyond a certain perimeter, and let them fend for themselves. Such a shame when I see young emergency fire/rescue workers die attempting to save these structures and dummies who live there.

[redir]

there are lots of places with private (or pay to spray) fire departments. It stinks, but hey, low taxes. Not hard to find stories of fire departments showing up and watching a building burn because the owner didn't pay. Sounds heartless, but someone has to pay, and if you can just write them a check when they fight your fire, then there will be no fire response for anyone.

It does seem that a defined benefit pension that is calculated on high-3 or similar is bound to fail. Probably needs a modifier based on the amount of employee contributions.

I found one(1) story in a google search about that at a home in Tennessee. Is it really as rampant as you think?

https://www.google.com/search?q=fire+department+lets+house+burn+becasue+t hey+didnt+pay&ie=utf-8&oe=utf-8&client=firefox-b-1-ab

Well, on the other hand, there is the phenomenon of people building homes in Stupid Zones. That's a label that a columnist for the Denver Post by the name of Ed Quillen gave to places that really shouldn't have homes in the first place. Colorado has plenty. MacMansions deep in dry, fire prone forests, far from help, or, at the bottom of hills that could easily landslide during a heavy storm. Just today I read an article in the NYT about how affordable RE is in the area in Hawaii that is now filling up with fresh lava. Well, duh, but, some of these homes were built on lava flows that occured just twenty years ago. And yet, they keep on coming back, much like SF was rebuilt in short time after the '06 earthquake. So, his argument was, yeah, sure, let them live wherever they want, but, cut off all emergency services beyond a certain perimeter, and let them fend for themselves. Such a shame when I see young emergency fire/rescue workers die attempting to save these structures and dummies who live there.

Agreed 100%. IMHO if we had done it right then there would be no private property along the beach front and inland riparian zones. No seawalls, jetties or any erosion control and so on. Nature is the best engineer.

[fiamme red]

Nice for these public employees to be able to pad taxpayer-funded pensions, claiming to work massive overtime hours when they were actually home, on vacation, or hanging out in bowling alleys.

God bless America! :rolleyes:

https://www.nbcnewyork.com/news/local/crime-and-courts/current-ex-mta-workers-charged-with-overtime-fraud-totaling-more-than-1m-feds/2759102/

According to LIRR and NYC Transit complaints, Caputo, Ruzzo, Nugent, Balestra and Gunderson each schemed to fraudulently receive thousands of dollars in compensation from the MTA each by falsely claiming to have worked hundreds of overtime hours (and in the case of Gunderson some regular time hours also) that they did not work. The alleged overtime pay they claimed claimed resulted in astonishing salary increases making them among the highest-paid MTA employees, and in the case of Caputo, the highest-paid MTA employee in 2018.

In 2018, Caputo was allegedly paid about $461,000 by the MTA. Of that amount, about $344,000 was paid for overtime he was allegedly to work, according to his complaint. In total, this made Caputo the highest paid employee at the MTA during 2018 – higher than the Chairman of the MTA. Caputo claimed to have worked about 3,864 overtime hours, on top of 1,682 regular hours, according to the complaint filed against him. That alleged amount of overtime would average out to about 10 hours of overtime every single day of the year, including weekends and holidays, on top of his 40-hour work week.

Similarly, Ruzzo, Nugent, Balestra and Gunderson were paid over $240,000 in overtime each, putting them within the top 12 highest paid employees at the MTA during 2018. These payments were based on reported amounts of overtime hours ranging from 2,918 to 3,914 for the year.

[fiamme red]

Thanks to a link in the "Slightly OT: sheriff kills ex COO of Napster while biking" thread, I just spent some time browsing through this site about public salaries in CA. (https://transparentcalifornia.com/salaries/search/?q=Fire+Captain-56+Hour&y=2017&page=1).

I can't be the only one who thinks something "just isn't right"?

Some amazing $$$ figures. God bless America.Looking again at that website (https://transparentcalifornia.com/salaries/2019/?&s=-overtime), I found a firefighter named Donn Thompson in L.A. who made $575,594.09 (salary plus benefits) in 2019. There were lots of other public employees in California raking in over $200,000 and even $300,000 a year in overtime pay in 2019. Just mind-boggling.

[Black Dog]

I'm sure I'll get flamed here, but yes, the current systems are severely broken.

How is it sustainable to pay somebody a pension of 67.5% of their salary for 40 years after they retire at 50? And it's tax free? And they then go get another job and still get full pension?

While the private sector works until they're 70 and 75% have no retirement savings.

Oh yeah, it's not sustainable. It needs to be drastically changed. But that's impossible because not politician would dare try to pass a law like that.

broken indeed...

This is the race to the bottom argument: If I don't have it as good as you then you should have to be brought down to my level. It is not an all or nothing proposition. Some public sector pensions may need some adjustments but not as much as the private sector where people work until they die and have no pension. Why don't we complain about the gross income inequities within the private sector? The income gap is really an income chasm and it is not the tax burden on the average person that is the root issue, it more like the lack of a tax burned on a small number of wealth holders/hoarders.

[C40_guy]

(*) BTW, though it has other problems, Social Security doesn't suffer from this end-of-career overtime problem. Its formula takes into account your lifetime compensation, not just the last few years of your career.

Maybe not, but for those of us born in 1960, 2020 may be the gift that keeps on (not) giving.

Here's the story (https://www.fool.com/investing/2020/09/05/born-in-1960-brace-yourself-for-a-big-social-secur/).

[HenryA]

Let me reduce this to the lowest common denominator:

Public employee unions = large pools of votes that can be bought.
Everybody gets what they want except for the taxpayer.

[redir]

No doubt those people mentioned abused the system and deserve prison time and pay back for what they did but is it fair to use a few people to paint a broad brush over the whole base of government employees?

My father retired from the GSA at 59 years old and his retirement is still going strong 21 years later. Granted it's a great pension but still most of the comfort he takes in retirement id from 401k and other personal investments. And for the 40 years he has had in government service starting of in the Marine Corps at age 18 he never got paid the equivalent of what he did for the government as he would have gotten in the private sector.

Private sector jobs pay a LOT more than their government equivalent. The government however will take good care of you in retirement but those in the private sector are left on their own. So if you want a Porche and a McMansion instead of a Mutual Fund or a Roth IRA then have at it but good luck retiring.

Any and all systems are rife with abuse weather they are private or government. Cripes there are so many instances of private industry corruption it would take weeks to list them out. But for some reason the general public always blames the low paid government officials for all the nations corruption.

[fried bake]

This is the race to the bottom argument: If I don't have it as good as you then you should have to be brought down to my level. It is not an all or nothing proposition. Some public sector pensions may need some adjustments but not as much as the private sector where people work until they die and have no pension. Why don't we complain about the gross income inequities within the private sector? The income gap is really an income chasm and it is not the tax burden on the average person that is the root issue, it more like the lack of a tax burned on a small number of wealth holders/hoarders.


This! All of this! Class envy has been normalized against certain “acceptable groups.” Meanwhile those in protected classes: Military (including contractors), the Uber wealthy continue on their merry way plundering the limited resources while the middle class drowns in debt.


Sent from my iPhone using Tapatalk

[BobbyJones]

This! All of this! Class envy has been normalized against certain “acceptable groups.” Meanwhile those in protected classes: Military (including contractors), the Uber wealthy continue on their merry way plundering the limited resources while the middle class drowns in debt.


Sent from my iPhone using Tapatalk


The great thing about this country is that you too can become the Uber wealthy. Effort, Favorable Circumstances and Luck are applicable to everyone!

Unfortunately, it does take a bit of a looters mentality to rise to the top.

[tuscanyswe]

The great thing about this country is that you too can become the Uber wealthy. Effort, Favorable Circumstances and Luck are applicable to everyone!

Unfortunately, it does take a bit of a looters mentality to rise to the top.


Is that even true anymore? And even if one does rise to the top its at the expense of others. Not that great of a deal for a group nore the individual that makes it imo that is.

[Davist]

Private sector jobs pay a LOT more than their government equivalent.

I think this has changed, depending on education level (PhD or professionals make more, but masters/bachelors/high school make less in private sector vs fed), agreeing with your points, however. per the CBO (data is '11='15 most recent available) https://www.cbo.gov/publication/52637

[fried bake]

The great thing about this country is that you too can become the Uber wealthy. Effort, Favorable Circumstances and Luck are applicable to everyone!

Unfortunately, it does take a bit of a looters mentality to rise to the top.


I also have a chance to sleep with a super model, which means SFA in terms of how I should approach my relationship with my current girlfriend. How about we approach public policy in terms of reasonable outcomes such as increasing wealth of the middle class, uplifting those who work hard but are still stuck due to systemic failures in our broken system of local and federal governance? I’m glad to pay taxes to fix those issues.


Sent from my iPad using Tapatalk

[jamesdak]

This! All of this! Class envy has been normalized against certain “acceptable groups.” Meanwhile those in protected classes: Military (including contractors), the Uber wealthy continue on their merry way plundering the limited resources while the middle class drowns in debt.


Sent from my iPhone using Tapatalk

Well as retired Military I'm going to hold my tongue. Just had a big response typed up but deleted it.

[nortx-Dave]

Well as retired Military I'm going to hold my tongue. Just had a big response typed up but deleted it.

Ditto. I'm retired Army.

[BobbyJones]

Is that even true anymore? And even if one does rise to the top its at the expense of others. Not that great of a deal for a group nore the individual that makes it imo that is.


It is. Personally, I'm a "rising tide raises all ships" person. The choices I've made and lifestyle I live reflects my ethos. I suppose my comment may suggest otherwise.

However, it's pretty obvious that in nature, there's always been winners and losers. A bit difficult to overlook that fact.

[jamesdak]

I think this has changed, depending on education level, agreeing with your points, however. per the CBO (data is '11='15 most recent available) https://www.cbo.gov/publication/52637

Yep that get's preached all the time and honestly I'd say it's still not true. I have plenty of associates and friends in the same business I am in but in the private sector. Our work is specialized a requires the highest level of trust the country has. Yet even though my workload is greater than most of them they easily make twice as much as I do still or even more with benefits packages to blow what a GS worker get's out the door.

[tuscanyswe]

It is. Personally, I'm a "rising tide raises all ships" person. The choices I've made and lifestyle I live reflects my ethos. I suppose my comment may suggest otherwise.

However, it's pretty obvious that in nature, there's always been winners and losers. A bit difficult to overlook that fact.

Hmm just by looking at the society in usa it seems there are very few tides just mostly large waves with the abyss in between where its seems most of the ships hangs out apart from those that are allrdy on the ocean floor :)

[benb]

Old thread brought back?

We are having a massive scandal this year in Massachusetts regarding abuse of police overtime.

Tons and tons of officers charging hundreds of thousands of dollars of no-show overtime details for years.

Lots of them get caught over and over and got no real punishment at all. They get suspended and keep their regular pay while they're suspended and then go right back to doing it again.

Just the tip of the ice berg as now the press is uncovering all kinds of crimes by officers that were covered up including violent crimes, DUI accidents that resulted in deaths of civilians, etc.

The union is fighting tooth and nail to stop any reform from happening.

No "low pay" here. More like the officer takes home $250-300k/yr by the time all the shenanigans are done. One of my HS classmates bragged non-stop about pulling in this much as an officer through details at our reunion. They get massive pensions too, and keep them even when convicted of felonies.

[paredown]

This is the race to the bottom argument: If I don't have it as good as you then you should have to be brought down to my level. It is not an all or nothing proposition. Some public sector pensions may need some adjustments but not as much as the private sector where people work until they die and have no pension. Why don't we complain about the gross income inequities within the private sector? The income gap is really an income chasm and it is not the tax burden on the average person that is the root issue, it more like the lack of a tax burned on a small number of wealth holders/hoarders.

While I agree mostly--the issue in New York is not just income tax, but that property tax (and the other near-taxes I mentioned above) have spiraled up--and in New York State--that tax burden pays mostly for wages and pension benefits for State employees. Because of the fiscal problems at the State level (since so little of the their budget is discretionary)--they have cut support for all kinds of local programs, which are now funded through local property taxes. The impact of this (and it echoes through NJ and CT) is that average citizens are paying a lot more for less (worse roads, worse facilities etc) while one group only--those with state government jobs and protected services like the police--are being paid wages that are multiples higher than the homeowners--who, on retirement are selling and moving out of the Tri-state area because they cannot afford to pay their property taxes. And this is before we are talking about the absurd wage rates (also mentioned by someone else above) for Rockland County police--and with the same kind of overtime abuse AND political patronage that determines who gets hired for those jobs.

And the Trump tax cuts exacerbated the problem by capping the deductibility of property taxes.

WalletHub (2019)--Ne York State has the dubious distinction of being the highest taxed state in the nation: https://wallethub.com/edu/states-with-highest-lowest-tax-burden/20494

I could go on--but to your point, there was a great graphic on the NYTimes page that showed the shifting of the US income tax burden--and you are absolutely correct that more of it has ended up on the lower-middle/middle income groups as the US has slashed taxes (and preserved loopholes like the Carried interest provision that the hedge funds have been using.)

This one shows the rate changes:
https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html

[Black Dog]

Let me reduce this to the lowest common denominator:

Public employee unions = large pools of votes that can be bought.
Everybody gets what they want except for the taxpayer.

*This claim of voter bribery is disputed.

So you are saying that public sector employees will vote for any party that will gIve them what they want? Soooo...wanna back that up with any evidence?

[Black Dog]

It is. Personally, I'm a "rising tide raises all ships" person. The choices I've made and lifestyle I live reflects my ethos. I suppose my comment may suggest otherwise.

However, it's pretty obvious that in nature, there's always been winners and losers. A bit difficult to overlook that fact.

Winners and losers is fine as long as the game is not rigged and the playing field is level and the rules are the same for all players and the referees are not biased or payed off. How many of these conditions actually exist in our society?

[Black Dog]

Old thread brought back?

We are having a massive scandal this year in Massachusetts regarding abuse of police overtime.

Tons and tons of officers charging hundreds of thousands of dollars of no-show overtime details for years.

Lots of them get caught over and over and got no real punishment at all. They get suspended and keep their regular pay while they're suspended and then go right back to doing it again.

Just the tip of the ice berg as now the press is uncovering all kinds of crimes by officers that were covered up including violent crimes, DUI accidents that resulted in deaths of civilians, etc.

The union is fighting tooth and nail to stop any reform from happening.

No "low pay" here. More like the officer takes home $250-300k/yr by the time all the shenanigans are done. One of my HS classmates bragged non-stop about pulling in this much as an officer through details at our reunion. They get massive pensions too, and keep them even when convicted of felonies.

Surely this is just a few bad apples? There can not be any systemic problems within law enforcement. :rolleyes:

[BobbyJones]

Winners and losers is fine as long as the game is not rigged and the playing field is level and the rules are the same for all players and the referees are not biased or payed off. How many of these conditions actually exist in our society?

I understand where you're coming from.

I'm sure said winners and losers will define those rules differently.

[BobbyJones]

*This claim of voter bribery is disputed.

So you are saying that public sector employees will vote for any party that will gIve them what they want? Soooo...wanna back that up with any evidence?

At a glance, this is a pretty high percentage of the workforce that would vote in contrast to their self interests. I'm just sayin'...

[Davist]

Yep that get's preached all the time and honestly I'd say it's still not true. I have plenty of associates and friends in the same business I am in but in the private sector. Our work is specialized a requires the highest level of trust the country has. Yet even though my workload is greater than most of them they easily make twice as much as I do still or even more with benefits packages to blow what a GS worker get's out the door.

Not preaching, but how/why would the CBO put out stuff that isn't true? Why would they skew results to show pay plus benefits is higher in government sector (ie what's in it for them?) Could your specialty be an outlier of sorts? The health benefits alone as part of a gov't pension are worth their weight in gold at this point and moving forward...

[skitlets]

Not preaching, but how/why would the CBO put out stuff that isn't true? Why would they skew results to show pay plus benefits is higher in government sector (ie what's in it for them?) Could your specialty be an outlier of sorts? The health benefits alone as part of a gov't pension are worth their weight in gold at this point and moving forward...

I work for the fed govt. My experience matches that with CBO data. Specialized positions and those that require prof degrees get paid much less than private sector. The blue collar to college degree/office admin types are comparable to private sector, but with better benefits. I think this is mostly a reflection of just how varied (and bad) private sector benefits can be. The current fed pension system isn't great and the 401k equivalent is decent. It's the health benefits that are a big cost saver for the middle road wage earners.

[xnetter]

I've worked in provincial government my entire career and I am most certainly NOT laughing all the way to the bank. I think many people who haven't worked in the public sector have a certain idea of what it's like based off some sunshine list data and a few news stories and that defines it for them.

Maybe it's different in the states but working in govt is no cake walk - layers of approvals for everything and austerity is a constant companion. You buy your own pizza at the staff party and your own drinks at the Christmas party. You are not allowed to bank overtime without executive-level approval. In many cases, the matched contribution pension is the only perk there is. As others have said, it's part of the overall compensation package. There are other benefits like stability and a degree of insulation from economic recession but overall you really need to value your role as a public servant. I've worked with people who have come from the private side and in most cases the degree of oversight and prudence was quite eye opening for them.

OTOH, the large municipal governments do seem to be universally prone to corruption and skulduggery, with law enforcement and transit personnel always getting busted for fraud and OT schemes. I guess I'm in the same category as those jobs insofar we are all "public servants" but really that seems like a totally different universe to me.

KJ

[redir]

I think this has changed, depending on education level (PhD or professionals make more, but masters/bachelors/high school make less in private sector vs fed), agreeing with your points, however. per the CBO (data is '11='15 most recent available) https://www.cbo.gov/publication/52637

A lot has changed too with the pension system. When my dad was in GSA it was old school now it's a sort of hybrid private 401k type thing where the employees are sort of left to make their own decisions.

[reuben]

At a glance, this is a pretty high percentage of the workforce that would vote in contrast to their self interests. I'm just sayin'...

I think that recent events indicate that there is a pretty high percentage of people that would vote in contrast to their self interests, period.

[jm714]

Not preaching, but how/why would the CBO put out stuff that isn't true? Why would they skew results to show pay plus benefits is higher in government sector (ie what's in it for them?) Could your specialty be an outlier of sorts? The health benefits alone as part of a gov't pension are worth their weight in gold at this point and moving forward...

What health benefits are you talking about? I’ve worked for five different cities in California and only one had retiree health benefits. $700 a month for life if you retired from that city.

[jm714]

Also in regards to OT and pension spiking, I have friends and family in two of the larger California fire departments. None of them get to count their OT towards their pension.

In regards to the guy that made $500k in OT, if I remember correctly he spent most of his time out working wildland fire assignments where he was gone for months out of the year. Most of that pay was reimbursed through The state and the Feds depending upon the incidents disaster designation.

Lastly, it is cheaper to pay OT to an employee than it is to hire another employee and pay them full salary and benefits.

[GregL]

Lastly, it is cheaper to pay OT to an employee than it is to hire another employee and pay them full salary and benefits.While this is true, we have run into some significant problems in NY state because some employee contracts for uniformed service (including police officers and fire fighters) allow overtime to be included in retirement pay calculations. Uniformed civil servants will work ridiculous amounts of OT in their final 2-3 years before retirement, sometimes as much as 30-40 hours extra per week. This raises their retirement pay to extreme levels that were never planned for. The OT is justified due to hiring freezes. The hiring freezes are in part caused by high costs associated with retirees - a vicious cycle where the taxpayers are the biggest losers. This cost structure is unsustainable. Yet every time an elected official tries to raise this issue, they are excoriated by the civil service unions.

I'm all for paying fair salaries and benefits to civil service employees. At the same time, it's financially reprehensible for them to receive these kind of retirement payments.

Greg

[jm714]

I can’t speak to NY pensions, but in California it’s a different story. OT isn’t pensionable in the majority of jurisdictions.

[GregL]

I can’t speak to NY pensions, but in California it’s a different story. OT isn’t pensionable in the majority of jurisdictions.
In NY, OT is most definitely part of your Final Average Earnings (FAE) calculation, which (along with date of hire) determines your retirement pay. One of the many reasons that we are the most taxed state in the US...

https://www.osc.state.ny.us/retirement/publications/1644/final-average-salary

Greg

[bart998]

I can’t speak to NY pensions, but in California it’s a different story. OT isn’t pensionable in the majority of jurisdictions.

This is true. I'm an L.A. County retiree.... no overtime is included in my pension. Plus L.A. County employees pay 12% of their salaries toward their own pensions. The employees run the County pension fund and it is fully funded, unlike the state fund that is run by the Sacramento Pols and used as a slush fund... and is broke.

[Latestart]

I worked in public sector in HR for 3 years after college
I have been a volunteer/unpaid commissioner managing a City department with a$100M/year budget.

It's not the people, it's the system and the incentives. Period. It is also the case that some in-efficiency is part of a large system of *any* type. Army, IRS, City, Airline.

Because government's 'owners' are voters and it's managers are politicians, there is some things that it's just not well-suited to do. And there are other things that *only* government can do well, even if it is done imperfectly.

I have seen plenty of top government leaders, mainly administrators, who make $175k-$300k who would make 2x-5x in the private sector. But it is also true that lower-level jobs are overpaid. In one case a manager who was responsible for 1,000 employees and $100M budget made $180k and his secretary who had no direct reports made $110k.

Read the Fifth Risk by Micheal Lewis - there are lots of great people throughout government who forgo lots of upside to be in public service and we should celebrate them.

There are also plenty of people 'gaming the system'. It's the job of our civic leaders to find and oust them - but we don't make it easy. It is VERY hard to fire government employee. Some of that is good, so you don't get the flavor-of-the-day politician firing senior staff (check out DC last few years). But is is also true that you can 'phone it in'. It is also true that the unionized workforce makes innovation *harder* than the private sector and you have to be really committed to effect change. As a result, inefficient and expensive practices persist for really long period.

All of that to say, forget worrying about the headline about a person and focus on the system underneath that makes the scam possible. WHY is it possible to work 3x your base in overtime? Why is OT included in retirement estimates in some cities? If it is possible, people will do it - don't hate the player, hate the game.

[tkbike]

In NY, OT is most definitely part of your Final Average Earnings (FAE) calculation, which (along with date of hire) determines your retirement pay. One of the many reasons that we are the most taxed state in the US...

https://www.osc.state.ny.us/retirement/publications/1644/final-average-salary

Greg

Tier 1, hire date 1973...even better

[mistermo]

...a "rising tide raises all ships"....

I used to believe this too, but unfortunately realize now that it's not the case. Real wages have remained comparatively flat for nearly 50 years. Despite a decade of economic recovery since the Great Recession, real wages remain at levels equal to 1970s. Compare this to the rise in earnings of Top 1%, Top 5%, the DJIA, NASDAQ, GDP....pick whichever economic measure you prefer, and the incongruity of this sentence is evident.

IMO, rising financial inequality is the biggest long-term threat our country faces. It's felt by many, the majority. A coherent argument can be made that it's given rise to 'unusual' political figures on both sides of the political aisle, who have become darlings of the disaffected. I won't go there.

If we want capitalism to succeed, we must address the inequity that exists in the system. We must realize that a select few are prospering at the at the expense of many. With capital gains taxed at a lower rate than ordinary income, the wealthy will continue to get wealthier.

Real wages:
https://assets.weforum.org/editor/large_wMMFc9vl93njMaDg7aEhjX2O_Qo9AQ80F6zscRVdp0w. jpg

Dow Jones has risen from 800 to 30,000 since 1970, an increase of 3,650%

NASDAQ is effectively 40 years old and has risen from 200 to 12K+, or 6,100%.

US GDP has risen from $1 trillion to over $20 trillion since 1970 for increase of 1,900%

Good Article (https://time.com/5888024/50-trillion-income-inequality-america/)

[slowpoke]

Folks often rag on "overpaid" public sector workers. This is because their salaries are out in the open for anyone to scrutinize.

If we could see salaries and expenses for private companies, we'd probably be shocked at the numbers. $100/day per diems, $7000/year continuing education budget, etc.

[d_douglas]

Folks often rag on "overpaid" public sector workers. This is because their salaries are out in the open for anyone to scrutinize.

If we could see salaries and expenses for private companies, we'd probably be shocked at the numbers. $100/day per diems, $7000/year continuing education budget, etc.

agreed. My salary is public as a public sector employee. My salary is pretty modest compared to most (I have friends that are in the mid-to-high 6-figures :eek:) so the fact that I get a pension and good dental care and get orthotics for my kids seems quite a reasonable compensation for the fact that I get paid 1/5 of my private sector buddies.

[mistermo]

Folks often rag on "overpaid" public sector workers. This is because their salaries are out in the open for anyone to scrutinize.

If we could see salaries and expenses for private companies, we'd probably be shocked at the numbers. $100/day per diems, $7000/year continuing education budget, etc.

This is true. Several years ago, I interviewed a guy for a mid-level management job where I worked. He was CFO of state Dept of Transportation and managed an enormous budget. This mid-level job, was a a step up in pay (and benefits, though not pension). Of late, there's been some public sector jobs I'd be interested in, but the pay cut is too steep for me to consider the idea seriously.

I hope people keep this in mind the next time they blame government workers' service. If they expect private sector service levels, then they should be prepared to pay 20-40% more in taxes.

[HenryA]

*This claim of voter bribery is disputed.

So you are saying that public sector employees will vote for any party that will gIve them what they want? Soooo...wanna back that up with any evidence?

No, no, you got this backwards.
Refute what I wrote if you can.
Show me wrong.

[jm714]

I think most people that I have worked with in the public sector have trended to the right. However, when it comes to rank and file employees and the public safety employees they are all unionized and supported by SEIU, the Teamsters, AFSCME etc and those unions control the politicians at the state level (at least in California) where employment policy and legislation is decided. And those groups won’t let the politicians make policy that would reduce benefits.

A few years ago the California City Manager’s Association hired an actuarial consulting firm to take a look at pensions and to come up with a plan fix the underfunding.

The plan would’ve changed my pension from what is called 2 @ 55 to 2 @62. It wouldn’t have changed the formula for my whole 30 year career, just from the point in time that it was adopted on a go forward basis. The other part of the plan was to eliminate COLA’s for 2-3 years for current retirees.

The plan was presented to the state legislature and while they found it interesting there was no backbone to adopt it.

Politicians love to kick the problem down the road.

[BobbyJones]

This has been an informative thread and a learning experience.

It's also been fairily non-antagonistic. Would be great to keep it that way.

[skitlets]

Politicians love to kick the problem down the road.

Politely, not just politicians. Corporations kick the can down the road too. Climate change, pollution, air and water quality. These are problems that private industry are generating, not paying for, and kicking down the road.

[xnetter]

This has been an informative thread and a learning experience.

It's also been fairily non-antagonistic. Would be great to keep it that way.

Agreed. Lots of smart and articulate folks on this forum with insightful things to say. I always enjoy reading these socioeconomic digest type threads.

KJ

[mistermo]

This has been an informative thread and a learning experience.

It's also been fairily non-antagonistic. Would be great to keep it that way.

Agreed. In high school I enjoyed economics and chose it as my major in college. This was at the time of nobel prize winning U. Chicago economist Milton Friedman, who espoused wholly free markets, void of any government regulation. When it was time for grad school in early 90s, I intentionally chose a school populated by U. Chicago School PhDs teaching this style of economic theory, based on free markets. It's very tempting to believe that free markets exist and people behave rationally as that model assumes.

Since then, we've learned that people do not behave rationally (e.g. love is not rational) and newer economic models now explain the fallacy of free markets in real world terms.

We're hostage to our values and our values glorify consumption and wealth. Other societies are different. In native American culture, the entire tribe, infants, elderly and the infirm, would enjoy equally the spoils of the hunt made possible by the stronger members. Braves would not hoard supplies for themselves or sell to others to build a bigger teepee. In other cultures, the Chief is poorest member as status is conferred by giving possessions to others. These are behaviors that, in our western view, are irrational, yet moral.

To me, THIS (https://www.bloomberg.com/news/articles/2020-10-08/top-50-richest-people-in-the-us-are-worth-as-much-as-poorest-165-million) is immoral. Whatever our religious, spiritual or moral values may be, this can't be justified. Yet it's where we are. (https://www.theguardian.com/business/2020/sep/17/wealth-of-us-billionaires-rises-by-nearly-a-third-during-pandemic)

Mind you, I don't have a solution that's better for allocating resources than capitalism. However, it's lead to an immoral outcome and there are instances where it is decidedly at odds with widely held human values. I'm not preaching, because I don't have the answer(s) of a better system, except one of practicing our own thoughtful morality.