[Leica] Government and school pensions

[jayanand at gmail.com (Jayanand Govindaraj)]

Ric,
The lower current salary could also be because of lifetime job security.
This is usually the trade off for public sector employees the world over,
even in Asia, where retirement benefits are minimal.
Cheers
Jayanand

On Sun, Mar 13, 2011 at 4:09 AM, Ric Carter <ricc at embarqmail.com> wrote:

> But, let's not forget. Pensions were one of the things management used as a
> bargaining tool to keep wages down. Employees were persuaded to work for
> less today on the promise of being cared for after retirement.
>
> State employees still make less money than private industry when comparing
> comparable education.
>
> ric
>
>
>
> On Mar 12, 2011, at 5:29 PM, Lawrence Zeitlin wrote:
>
> > Rei is certainly right. Pensions are the biggest burden on state and
> local
> > taxes. I've seen how this operates from both sides. I was a union member
> at
> > my university for 32 years as my union negotiated for ever higher pension
> > and medical benefits for retired faculty. The union espoused a defined
> > benefit plan where the pension after retirement would be based on the
> > average of the last three year's salary. It was an unfunded pension,
> > payments to be made from endowment and current income. Fortunately the
> > legislators in my state permitted faculty to drop out of the plan in
> favor
> > of a defined contribution pension where the university would contribute
> 15%
> > of annual salary plus whatever I cared to add into a TIAA/CREF retirement
> > fund. I chose to invest largely in equities, a lucky decision. The Dow
> was
> > at 600 when I started. Now it hovers around 12,000.
> >
> > On the flip side, I was a member of my local school board for 10 years. I
> > saw our expenditures for student education rise markedly during and
> mostly
> > after my tenure. When I started, our budget was about $17,000,000 for an
> > enrollment of 3,500 students, an annual cost of less than $5000 per
> student.
> > Currently the budget is over $50,000,000 for only 2,500 students, an
> annual
> > cost of $20,000 per student. While education costs have indeed risen
> > (computers, mandated busing, special education) the bulk of the increase
> is
> > due to overly generous retirement and full medical care benefits paid to
> > former teachers. Since school districts are prohibited from investing and
> > can hold only a small amount in reserve, the full budget is paid by
> > taxpayers every year. One teacher told me that she makes more as a
> retiree
> > than she ever did while working. You can imagine my joy at hearing that
> > since I haven't had a kid in public school for over 20 years.
> >
> > All I can definitively say is that state and local governments are on the
> > slippery slope to bankruptcy because of the benefits negotiated in those
> > golden '90s when it was assumed that the money would keep flowing in.
> From
> > my personal experience I suggest that educational and municipal
> institutions
> > get off the defined benefit retirement bandwagon and adopt a defined
> > contribution system. Let the hard working teachers and government
> employees
> > take their chances on the economy like the rest of us.
> >
> > Larry Z
> >
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>
>
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