But it is the Democrats that are doing it, so it’s legal.
In 1997, the Washington State Legislature secretly gave themselves a raise. Not to their monthly incomes, this was more of a ‘future raise’ that Washingtonians didn’t see coming until now.
The legislature voted in an addendum to their pension plan, the same plan that the rest of the retired former employees of Washington State draw from, currently approximately 114,000 people, that ups the dollar amount in the monthly check if the pensions investments do better than expected.
Sounds fair, doesn’t it? Sure it is. If your pension plans has more money than it needs, you should benefit from lending them the money to invest with in the first place.
But that isn’t the whole of the plan.
What the legislature included in that plan was that if the investments do poorly after doing better than expected, the previous monthly pay increase would stay and the taxpayers would have to make up the rest.
But wait, it gets better!
Not only does the payout never decrease, if the stock market goes up again after a drop, the payout only increases, guaranteeing that the payee will always get more money and never less, even if the money isn’t there to pay out.
Isn’t that swell of them to screw me like that!?!
But wait, it gets even better than that!
The unions who the state employees are organized by are ready to sue the state if the current legislature tries to vote it out of the plan!
I’ve said some rather rude things about unions here at RNS in the past. My only regret about them is that they weren’t rude enough to cover how pissed off I am right now.
Because of the Dot-Com bubble of the 1990’s, the monthly pension payouts increased at close to 10% over what they should have been. The bursting of that bubble and then the attacks on September 11th, which subsequently blew the bottom out of the stock market, means that former state employees were drawing more out of the plan than it had in its bank account and it is estimated that there is a $4.9 Billion dollar deficit that I, the Washington State Taxpayer, am going to have to fill
In Monday’s rant, Barely Governor Gregoire showed that she planned on immediately dropping $49 Million of a $1.4 Billion surplus into the pension plan hole after the legislature passes her budget addendum in 2006. She also has plans to set aside $127 Million from what is left of the surplus to plop into it in 2007. But other than that, she has no plan.
Mr Completely also reminded me that I forgot to write about the 500 or so new employees Gregoire plans on adding to the payroll because of the surplus. So now there will be 500 more people who can bitch about any vote to stop this ignorant pension plan.
My question is, if the taxpayer dollars can be siphoned off to pay for the pension plan for public employees and the pension is running a deficit larger than the surplus, is it really a surplus?
Don’t get me wrong here; I want my portion of that $1.4 Billion surplus back in my wallet, but shouldn’t it be wrong to tease me with it before handing it over to an ill-run union benefits plan?
In somewhat of a correlation to this point, I give you Ryan Sager’s NYPost article titled “A New Class War� that I found at Smash’s place. The article talks about how while benefits for private sector are staying steady or are falling, public sector employees are bilking the taxpayer for more and more money every year.
Sager points out that while only 8% of private sector workers are unionized, 40% of public sector are. I believe that you can almost double those numbers here in Blue Washington, where public employees are being forced to join unions or lose their jobs to someone who will join.
So that is where it stands here in Washington. The local lefties are crying and moaning about the wars in Iraq and Afghanistan and how much they cost and how it will be ‘our grandchildren’ that end up paying for them.
But if there is a large debt to a union that will end up being paid by ‘our grandchildren’, that is just fine.
Hypocrites, each and every one of them.
I think that this problem should be treated the very same way that Democrats want to treat Social Security: Do nothing and let the money run out.
Either that or make the current union member pay more into the pension fund. There are currently at least 300,000 employees for the state of Washignton, double their out of pocket contributions. See if they want to keep this bogus benefit then.
The other side of the Coin O’ Shittiness is that public sector employees can retire at relatively young ages and milk the taxpayers for decades and decades. It has to end.
I’m going to have to take the other side here. Not because you have your financial facts wrong, (you appear to have the gist of it) but because you have taken up the cudgels against public employees generally.
I’m sure that on a personal level, AK, you know some other public employees, active or retired besides me. I think that you will find that most of us aren’t communists.
The problem with our pension systems is that as we try to make it to the end of our long careers (the first fact you got wrong is career length), we will have to work under many different administrations and administrators. Today, Washington State is run by liberal (D)emocrats, but they could be (and both of us hope that they will be) elected out of office any day now. The public employees have their pension system as their major benefit, and it shouldn’t be adjustable at the whim of a new administrator. It has to be fixed into law.
That’s only fair: you wouldn’t want your private 401K to come or go at the whim of a corporate shark at the head of your firm, would you?
Here’s a bacic list of facts as to how the system works, in Oregon (CA is much the same):
1. The system has a fixed retirement age for all but police and fire (and yes, some politicians have stuck themselves into the P&F category for some absurd reason).
2. Police and Fire have to work 25 years to get an average of 50% of their wage at retirement, and all others have to work 30 to get the halfsies.
3. The pension is vested at 5 years.
4. The amount in your account can be adjusted upwards by earnings and percentages based on them (i.e., overtime). 401Ks have a finite cap and public pensions don’t. This is why I retired at 25 years with almost 70 percent of final wage: there were almost 4,000 hours of overtime in there, representing 6,000 hours of additional contributions I made. Additionally, I was able to put $50,000 of my own savings into the system to buy time that I lost on military duty. 401K people have the same right.
5. The pension is guaranteed a certain rate of return, in my case, 8%. I got 8% back during the dot-com times when the hi-risk 401Ks were getting 40% (plus a timy fraction of the surpluses the fund made), but I have gotten 8% since then, also. It’s about a wash.
6. There ARE tier layers. PERS here is now on it’s 3rd tier, and each tier gets less guaranteed growth, and less payout at the end. You stay in the tier you were hired in, as that is considered a promise to you for the duration of your employment. This tenet of public pensions is also controversial, but it is not correct to say that the pension structure never changes.
7. If a mistake is made, the overpayment can be collected back from both active account holders AND pensioners who have retired. That’s happening here in Oregon today. In 1999 (the height of the dot-com bubble), the 8-percenters were paid 19.8 percent (the variable guys were paid 43%), because of the clause on surpluses. The public employers all got together and sued the system, and won. The court said that the payout should have been 11.9 percent. The system is going to collect not only the overpayments into our accounts from us, we have to pay back the overpayments made to us since then. My payment will come to around $15,000, and could be handed to me as a lump sum, and I’ll have to take a lowered pension also.
Public pensions aren’t “fat”. The private sector doesn’t see fit to compensate it’s employees in the future to the degree that the public sector does, and that is the difference. In the private sector, employment follows the business cycle, but the people who make demands on their governments for services (you and I) have decided that we don’t want the level of those services to strictly follow the business cycle, so the level of public employment doesn’t vary much.
Sure, there are hogs at the trough. My pet peeve is education, where in the primary and secondary grades, there are at least 300% too many administrators, conselors, aides, etc.
There are also hogs at the trough in the private sector. CEO compensation in the US is totally out of hand, and the business sector refuses to correct the imbalance (as measured against private corporations in other parts of the civilized world). Japan, for example, has an 11-fold spread between the CEO compensation level and the highest wage earner’s. In the US, it averages almost 300% for the same size (as measured in employees and sales) corporation. That’s 30 times as much. Japanese executives have no lack of incentive, so the answer doesn’t lie there. The US executives pay themselves that much BECAUSE THEY CAN, AND FOR NO OTHER REASON.
For me, corporate irresponsibility in both sectors needs to be first addressed in the boardrooms and executive suites (and types of workers, to be fair), THEN we can talk about fairness issues in pension compensation.
The cost of governmental employment balloons because of a failure to analyze the job and decide who is or isn’t actually producing towards the goals of those employer groups, not because of the pensions guaranteed to the workers.
If you take socialism out of government employment, and have business-minded direction of the goals of employer groups, then get rid of excess jobs and job classifications, you will have a more streamlined work force, but one that can still do the jobs that citizens want done.
The fat is in the heads of the politicians, not the ledgers of the pension accounts.
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