The public worker pension debate rages on. And “rage” is the operative term when the unions and their allies discuss switching to 401-k plans from their current guaranteed defined benefit plans.
Carefully selected sob stories are popping up to justify continuing the public worker guaranteed pensions that are roughly three to four times what private sector workers can expect to receive upon retirement.
Rather than rehash the usual talking points, I’d like to here list what I consider some key often UNSTATED (and false) assumptions underlying the labor unions’ pitch:
1. “A government worker should be able to retire comfortably with their pension alone.” No need to otherwise save or invest. No stocks, no savings, no IRA’s, no home equity build-up, no payoff of mortgages and no inheritances. In the private sector, we look to these and other sources for improving our retirement years.
2. “City workers get zero social security.” Often that is not the case, as over their lives they earn sufficient credits in other employment (10 years total). Granted, there is a severe SS offset against government defined benefit pensions that greatly reduces the monthly SS check, but still some SS is paid. If they choose NOT to make the effort to qualify for SS, whose fault is that? And, BTW, what did the workers do with their SS annual deduction that they didn’t have to make? Why were those funds not invested, and, assuming they weren’t, why is that the taxpayers’ fault?
3. “It is normal for people to stop working and retire at age 55 to 60.” Not in the private sector! Indeed, many spend their final years trying to sock as much away as possible for retirement. Why should government workers be different?
4. “A family should be able to retire comfortably on one worker’s pension.” But for most CA families, both spouses are expected to work, save and invest.
5. “Public employees consist mostly if not entirely of police and firefighters.” As I said, these are UNSTATED assumptions. VERY time the union supporters discuss public employment — those are the occupatons brought forward as typical government work.
One other common union talking point is that “we don’t want geriatric police and firefighters answering emergency calls.” And they are generally correct.
We seldom send 60 year old soldiers into the field to battle our foes. But just because most police and firefighters should be retired before age 60 from public safety work does not mean that they are therefore entitled to completely retire from working.
When a military person retires (as early as [but seldom at] age 37), there are two key points to consider:
1. Their pension is figured on only their base salary — all the other additions (especially the housing allowance) don’t count. An E-6 staff sergeant retiring after 20 years’ service gets a bit over $19,000 a year retirement pay. A retiring 30 year E-7 will get less than $39,000 a year pension.
http://militarypay.defense.gov/mpcalcs/Calculators/FinalPayHigh3.aspx
2. It is assumed that military retirees likely will go get another job. Usually they don’t expect to live well on just their military retirement. The same should be true for our cops and firefighters — who have a FAR easier and safer job than our military.
Our police and firefighters are talented, savvy individuals who would be valuable employees in many fields, though it’s likely that the pay would be less than what they are used to. But somehow I can’t get to0 teary-eyed for them discovering that competitive private sector wages are less than is commonly found in government work.