From the great Mitchell Schnurman in this morning’s Star-Telegram:
In January, a 53-year-old policeman retired with an annual benefit of $90,312 for life, plus $256,000 in a lump sum payment.
By comparison, a Stamford, Connecticut fireman I know retired after 30 years at age 60 with an annual pension of $38,000. For how the difference will affect taxpayers, read the whole thing
here. For more on the pension debacle facing the entire country, go
here.
6 comments
Schnurman has written for the S-T for a long time. This column would have been better about 10 years ago. Now, it’s kinda like closing the barn door after the horse has escaped. And he quotes Moncrief like he’s an innocent bystander.
He may have been inspired by this New York Times piece: http://www.nytimes.com/2010/08/07/your-money/07money.html?_r=1
Kudos to former governor Richard Lamm of Colo for initiating a pension overhaul. Maybe we should take a long, hard look at this here in Dallas. Greatest quote I’ve heard in a long time: “You can’t fund the dream of the 1960s on the economy of 2010.”
The retirement plans for all government employees at all levels should be defined contribution plans only. The amount of their benefit when they retire is based upon the value of the annual contributions to their account and the earnings that they accumulated on their contributions. That way they can retire whenever they want and there is no such thing as an unfunded liability for the taxpayers to deal with.
Schnurman writes that private sector companies stopped providing defined benefit plans willingly. They were actually driven out of them by the funding limitations that Congress put on them in order to limit the tax deductible contributions – a tax increase without calling it a tax increase. The current tax system limits the amount that a company can put away for its employees’ retirment which is just one more reason to dump the current tax system and tax spending.
Just for grins Wick – call an actuary and get a proposal for your company to provide a retirement plan just like the one Ft. Worth provides – 3% per year of employment of final 3 year average pay. To make it really interesting, throw in a cost of living adjustment after retirement as well.
This public employee pension plan funding is a ticking time bomb but nothing compared to Social Security where there are no funds set aside to provide the benefits with – bka “pay as you go.”
The root of the problem is Baby Boomers, not DB plans. The “Locust Generation” has consumed the wealth of the United States and destroyed any sense of civility. The lefties went crazy in the 60s and the righties are going crazy today.
Dear God, help us, and please deploy the Death Panels on the Baby Boomers ASAP. It was the best non-idea I’ve ever heard from Sarah Palin.
It would’t be a relevant article now if Fort Worth had closed the barn door a decade ago when the funding period became infinate. You would think that a 2007 investigaation by the Texas attorney general ordered by the Texas Pension Review Board due to the chronic unfunded position would have gotten some attention.
The problem is that these plans retroactively enhanced benefits by assuming that they could consistetly earn 8%+ by investing in the stock market. As everyone knows higher returns require higher risk, the returns aren’t consistent or guaranteed. Now Fort Worth and most other public pensions are in deep trouble becuase the investments can never catch up for the losses of the past decade. They have essentially put their taxpayers at risk for anything less than an optimal stock market return every year.
They all did it, they were all wrong, they are all busted, taxpayers have to foot the bill.
I sure screwed up thinking I should go into the private sector…