why aren't californians OUTRAGED over public employee pensions?

In Canada these types of pensions are referred to as Defined Benefit pensions (DB). They were very popular with companies 40 odd years ago when inflation was running above 10% and bonds were returning a similar value. As a result the value of the pension pool was growing faster than the liabilities of the pool. So quite often the companies did not have to make any contributions to the fund. The companies would refer to this as a pension holiday. Companies loved them as they were effectively a low cost perk for their employees and they could trade off a lower salary for a good pension.

Fast forward to the last 10 years or so and inflation, and bond returns, have dropped to a couple of percent and now companies are having to shovel large amounts of cash into the pension funds each year to keep them solvent. As a result companies are ditching DB plans and going for Defined Contribution (DC) plans. In this the company puts $X per month into a 401(k) type account and then walks away. The employee decides where it is invested. If it does well, good for the employee, if it does badly - well tough luck. Basically, in a DB pension the company carries the risk, in a DC pension the employee carries the risk.

As the DB pension was part of the employment contract companies have to grandfather existing employees so if you started with a DB pension they have to honor it.

The US is exactly the same.

Defined Beneifit is old school.

Almost everyone does Defined Contribution now.

The problem with DC is that you have to guess when you will die and spend accordingly.

With DB the money is essentially pooled and the people who die young offset those that live long. But it relies on future business and future management doing their job to protect your money.

nagoya wrote:

Ciro wrote:

No point is you're being hysterical, an absolute drama queen.

So you're going to resort to name calling instead offering a rebuttal? Typical.

I'll speak it out. Point is, your selective about outrage. There's been a lot more money squandered on more dubious things than earned pensions.

Farming subsidies.

Oil & gas subsidies.

And so on....

Can't change pensions after 20-40 years? Oh, yea. I wouldn't bet on it.

gewrv wrote:

Can't change pensions after 20-40 years? Oh, yea. I wouldn't bet on it.

You can change the pensions on a go forward basis for new hires, but you can’t cut or eliminate them for existing retirees unless the fund or employer goes bankrupt.

You can also purchase private pensions or annuities later in life if you want a defined benefit portion of your portfolio.

That was the old way. Now we live in a different world. People are much more informed. Laws can change. People can have change without going though the long processes of the past. Things can happen quickly.

Cause we are progressive, enlightened, and noble. We know what is BEST for everyone.

No doubt.

No, because everyone knows what's best for themselves. That is, do whatever you want, as long as it doesn't violate the rights of anyone else.

Yes an no. For most but I’ve paid 24 years into social security working a second job. I won’t get it or very little.

But back to your point, social security is similar to a pension with less buy-in.

Additionally republicans don’t like pensions for one reason: Koch brothers want their wands on the billion dollar investment portfolios. Dig into it, it the real reason they want to break the unions.

gewrv wrote:

That was the old way. Now we live in a different world. People are much more informed. Laws can change. People can have change without going though the long processes of the past. Things can happen quickly.

No, The Riot is correct. A DB pension is a contract agreed to by both parties at the time of hiring and forms part of the total remuneration package. One side can't unilaterally walk away from it. Even if the employee quite his job the contractual commitment remains unless he agrees to accept a cash settlement for the value of his accrued pension.

Supposing I was to offer you a job for a year and agreed to give you $100K. But I would pay you $5K a month for 12 months ($60K) and then on your last day give you the remaining $40K. You may well feel that's a good deal and sign up with a legally binding contract. But if a week before your year is up I tell you that 'Now we live in a different world', 'Laws can change', 'Things can happen quickly', and you are not going to get the $40K balance. Would you walk away and say 'Gee, bad luck', or would you say 'See you in court'? You would obviously go to court and you would win as I gave you a contract that stated you would get the end of contract payout.

By the way the 60/40 split I chose is not arbitrary. If I live to the same age as my father then 40% of the total amount of money I receive from my employer will come after I have retired.

nagoya wrote:

I'd be showing up to the Capitol with pitchforks

https://transparentcalifornia.com/

Run a few searches - 150-200k pensions are the norm with someone that has 30 years of service. Unbelievable.

You obviously don’t know this, so I will educate you. Pensioners pay into it over their lifetime. Those that work for 30 years you end up contributing at least a couple million dollars to receive that $150-$200k pension. If you die 3 years after you retire you just threw away a pile of money.

You don't understand. The people are not going to honor the contract and it will not be enforced by the courts The whole social structure is going to change, for the better of everyone, including those whose pensions disappear. This will be good for them as they will be able to now EARN a living like the people in the private sector do.

I will get one wrote:

SS funding wrote:

Remember we will not get social security

And you are exempt from paying into it.

Yes an no. For most but I’ve paid 24 years into social security working a second job. I won’t get it or very little.

Well, you did not claim you were working a job other than in government. So, you "yes and no" reply doesn't amount to anything. The poster is correct. You do not get social security unless you pay into it, and government workers do not pay into it.

gewrv wrote:

You don't understand. The people are not going to honor the contract and it will not be enforced by the courts The whole social structure is going to change, for the better of everyone, including those whose pensions disappear. This will be good for them as they will be able to now EARN a living like the people in the private sector do.

You really do not understand how pensions work do you? I worked in the private sector, my pension comes from a private sector company, it is a legal contract, and no, that pension will not disappear. And yes, the pension plan was a factor when I joined the company.

Do you realize that you sound like a socialist? "for the better of everyone, including those whose pensions disappear. This will be good for them." In other words, lets confiscate their wealth because I don't like the fact that they have got more than me. Do you also want to confiscate executives stock options or signing bonuses? How about overtime? Should some people get time and a half while others get double time? Best if there was a law that said you only get straight time for OT. After all, you are paying for those bonuses and OT premiums every time you, in my case, fly in an aircraft.

Many public sector pensions are incredibly generous and came about during the heady days of the 60's and 70's when pension plans were cash cows. It was easy to buy labor peace with improvements to the pension plan such as earlier payout or better survivor benefits as it was all free money. Due to high inflation the fund was growing faster than the pay outs so it did not cost the employer anything. Private sector companies were more cautious as they could see the era of pension holidays couldn't last forever but the public sector showed less constraint - as usual.

My point is you can't change the past and if you are locked into a contract you are locked in. You can only change going forwards. As I said previously private companies have been switching new hires to DC pensions over the last five years or so. I doubt the public sector has been as proactive.

nagoya wrote:

Tommy2Nuttz wrote:

Heres a better idea kiddo..get a job there.

Quit yer whining.

Oh sure, I'll just show up in California and get a plum gov't job with no connections.

Great idea champ.

Wimps like this are usually the ones complaining about immigrants stealing their jobs.

it's a viable question.....if it's such a plum position then why not some skills, develop some connections and go compete for it. Or maybe it's not such an outrageous salary that it's worth doing all that.......so then maybe you should stop whining.

You have no grounds to whine about other people's good fortune when the same opportunity is open to you and you are unwilling to even try.

yes and no wrote:

I will get one wrote:

Yes an no. For most but I’ve paid 24 years into social security working a second job. I won’t get it or very little.

Well, you did not claim you were working a job other than in government. So, you "yes and no" reply doesn't amount to anything. The poster is correct. You do not get social security unless you pay into it, and government workers do not pay into it.

I am a CalPERS employee and pay into Social Security. Teachers are generally in CalSTRS do not pay in.

Best deal is to start in a job with PERS and then become a teacher. You can choose to remain in PERS instead of STRS and keep the better retirement formula.

CalPERS employees hired before 2011 are in the 2% at 55 formula. If they retire at 55 they will receive 2% of their single highest consecutive 12months multiplied by the number of years worked. Retire earlier and receive less, retire later and percent goes up. Newer employees are 2% at 60, but highest consecutive 3year average.

Teachers hired before 2011 are 2% at 60 and new hires are 2% at 62.

I wasn't at all talking about private pensions. They will remain as agreed. It's the public sector that will not be entitled to their pensions. If I come across like a nutcase or something I don't blame you. I would have thought the same thing years ago. But I have discovered through long personal experience gross waste, gross incompetence and gross abase of power on a scale in the public sector that can't barely be comprehended. This is something that could never happen in the private sector. People are now understanding the magnitude and it's going to stop.