WP: State and local workers: Gone but not off the books

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    Mar 08, 2011 8:38 PM GMT
    http://www.washingtonpost.com/wp-dyn/content/article/2011/03/08/AR2011030802528.html

    Whoever it was who came up with the phrase "golden years" might have had Bruce Malkenhorst Sr. in mind.

    The retired city administrator of Vernon, Calif., pulls down a pension of $43,320.53 a month - or close to $520,000 a year - through the underfunded California Public Employees' Retirement System (CalPERS), which covers about half of all government workers in the state and is the nation's largest public pension administrator.

    Malkenhorst receives that princely stipend by virtue of having held six separate four-day-a-week jobs at the same time in Vernon, a speck of an industrial town just south of Los Angeles. He was Vernon's city manager, city clerk, finance director, treasurer, redevelopment agency secretary and director of light and power.

    Deals like the one he got rankle Californians at a time when the state's public employee pension plans are "dangerously underfunded, the result of overly generous benefit promises, wishful thinking and an unwillingness to plan prudently," a government-appointed panel of experts, the Little Hoover Commission, warned last month.

    California is far from alone. Cities and states across the country are grappling with potentially crushing health and pension obligations for their current and future retirees. And as they do, stories of excess and gaming of the system are getting more attention than they have in the past, causing problems for unions as they try to win the battle for public opinion in states where lawmakers are trying to cut worker pay and benefits.

    "Not that many people are doing it, but it does inspire taxpayers' angst," said Steven Kreisberg, a top official for the American Federation of State, County and Municipal Employees. "When people look at it, they don't think it's appropriate - and neither do we."

    Fat pensions like Malkenhorst's are not typical, of course. AFSCME, which is the largest public-employee union, says that its average member earns less than $45,000 a year and receives an annual pension of roughly $19,000.

    But many retirees from state and local government jobs do much better than that. When the advocacy group California Foundation for Fiscal Responsibility requested state retirement system records in 2009, it discovered that nearly 15,000 of the state's retired government employees were receiving pensions of more than $100,000 a year, with Malkenhorst topping the list.

    In the two years since, Malkenhorst's annual benefit has risen by about $20,000, according to figures provided to The Washington Post by CalPERs.
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    Mar 08, 2011 8:48 PM GMT
    riddler78 said,

    "Heh sorry to burst your little bubble, I don't actually consider most of the rantings here to be of particular importance and I didn't bother reading the subsequent responses to this thread - and surprise surprise, I didn't bother to read the follow up"
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    Mar 08, 2011 8:54 PM GMT
    It gets worse.
    http://reason.com/archives/2011/03/08/the-state-pension-time-bomb

    First, by law, states are not required to pony up regular contributions to pension systems. Lawmakers generally jump on any opportunity to be fiscally irresponsible, so many states have deferred pension payments and used their share of the contribution to increase spending in other areas.

    Second, government accounting standards systematically underestimate fund liabilities, which in turn encourages pension deferrals. Eileen Norcross, my colleague at the Mercatus Center at George Mason University, argued in a December 2010 paper that the difference between government and private-sector accounting rules is at the root of the unfunded liability crisis.

    For accounting purposes, private pension plans use the market value of their liabilities. This rule requires future liabilities to be discounted at an interest rate that matches the risks associated with the assets; the resulting value represents the amount a private insurance company would demand to issue annuities covering all the benefits owed by a given plan. By contrast, states calculate the value of pension liabilities based on the returns they expect from investing pension assets. And on average, the states assume an unrealistically high 8 percent annual return on pension investments while the actual rate should be closer to the yield of 15-year treasury bonds. Here is why that’s so problematic.

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    Mar 08, 2011 8:58 PM GMT
    LOL

    What?, thought you didn't follow up.

    icon_lol.gif
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    Mar 08, 2011 9:04 PM GMT
    LeanathleticDC saidLOL

    What?, thought you didn't follow up.

    icon_lol.gif


    Lol - I honestly can't tell if you can't read or just don't bother reading. Please read the text that you've quoted.

    "I didn't bother reading the subsequent responses to this thread - and surprise surprise, I didn't bother to read the follow up"

    I wasn't even channeling any Engrish there. icon_lol.gif
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    Mar 08, 2011 9:14 PM GMT
    icon_lol.gif

    Made you reply.

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    Mar 08, 2011 9:24 PM GMT
    Do you kids want me to turn this car around?
    I'll turn this car around!.icon_evil.gif

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    Mar 08, 2011 9:46 PM GMT
    "These are the values inspiring those brave workers in Poland ... They remind us that where free unions and collective bargaining are forbidden, freedom is lost." -- Ronald Reagan labor day address (1980)
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    Mar 08, 2011 9:54 PM GMT
    kisuke12 said"These are the values inspiring those brave workers in Poland ... They remind us that where free unions and collective bargaining are forbidden, freedom is lost." -- Ronald Reagan labor day address (1980)


    In 1981 he fired all the Air Traffic controllers and broke their union over a strike not collective bargaining. Further, even what is being proposed in Wisconsin isn't the elimination of collective bargaining - though the that teachers participated in illegal walkouts should be fired. Finally, to my knowledge no one is proposing that unions in the private sector or even in the public sector are abolished. In fact - the people I know who are most against public sector unions are also the strongest supporters of the right of workers to unions in the private sector.
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    Mar 08, 2011 9:58 PM GMT
    riddler78 said
    kisuke12 said"These are the values inspiring those brave workers in Poland ... They remind us that where free unions and collective bargaining are forbidden, freedom is lost." -- Ronald Reagan labor day address (1980)


    In 1981 he fired all the Air Traffic controllers and broke their union over a strike not collective bargaining. Further, even what is being proposed in Wisconsin isn't the elimination of collective bargaining - though the that teachers participated in illegal walkouts should be fired. Finally, to my knowledge no one is proposing that unions in the private sector or even in the public sector are abolished. In fact - the people I know who are most against public sector unions are also the strongest supporters of the right of workers to unions in the private sector.
    Which makes your beloved Reagan a classic hypocrite!
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    Mar 08, 2011 10:01 PM GMT
    TropicalMark said
    riddler78 said
    kisuke12 said"These are the values inspiring those brave workers in Poland ... They remind us that where free unions and collective bargaining are forbidden, freedom is lost." -- Ronald Reagan labor day address (1980)


    In 1981 he fired all the Air Traffic controllers and broke their union over a strike not collective bargaining. Further, even what is being proposed in Wisconsin isn't the elimination of collective bargaining - though the that teachers participated in illegal walkouts should be fired. Finally, to my knowledge no one is proposing that unions in the private sector or even in the public sector are abolished. In fact - the people I know who are most against public sector unions are also the strongest supporters of the right of workers to unions in the private sector.
    Which makes your beloved Reagan a classic hypocrite!


    Yep, either that or he recognized that context matters.