Someone shared this link to an interesting article…
For a long time, there have been warnings of a “silver tsunami” among public employees—a sudden wave of baby boomer retirements that could potentially cripple the workforce.
It is a long read but well worth the time. Especially if you consider how many people our little City has who are now enrolled in the DROP.
A very informative article shooting holes in the common myths about Government Pensions.
From the linked article:
Think public retirees have it made? Not necessarily.
True, there have been plenty of headline-grabbing cases of public-sector retirees with seemingly over-generous pensions — even some whose retirement pay outstrips what they made in their working days. But the fact is that most public retirees enjoy modest lifestyles.
Still, in the ongoing debate over reforming public pensions, retirees sometimes are portrayed as living high on the hog, a characterization employee advocates say is unfair — and one that’s clouding the issue.
4 Myths About Public Pension Retirees.
Just to give a small bit of context to the article, the average pension amount from the Florida Retirement System (FRS) is $18,000 annually. (source here, it’s a PDF, page 3)
Thanks to Kim for pointing out the original article.
Mr Gerald Jones, long-term employee, Steward, and Executive Board Trustee, is retiring!
Good luck Mr Jones! We will miss you and enjoy your retirement!
If you spend any amount of time paying attention to the comment sections of any news article about Public Workers and their benefits you will hear over and over about the ‘outrageous benefits’ we receive as Government Employees. Well a Census Bureau report, by way of the Miami Herald, has this to say about Florida…
…gives Florida low marks for the actual benefits paid to state pensioners. Florida’s average payout is $19,940 a year, well below the national average of $24,140
via Florida’s pension system relatively low on workers – Business – MiamiHerald.com.
And while that data is specific to the State’s retirement system (FRS), it still manages to point out the fallacy about ‘outrageous pension amounts.’
Another cry of Unfunded Pension Liability. This time from right up the road in Titusville. A really good read if you keep this particular point in mind:
“The city can get out of the problem by paying 100 percent of its annual required contribution for about 30 years…
via Mayor: Pensions might bankrupt Titusville | FLORIDA TODAY | floridatoday.com.
The City of Titusville, like most Cities that have Pension Plans, has not been contributing what their share into their own pension plans. They have been withholding monies from the system because the Market was doing so well they could get away with it. Which is fine, and legal too. But it has set up a situation where nothing is set aside for the ‘rainy day,’ and now it is raining.
And, being politicians, are trying to pass the blame to the workers.
Don’t let them treat us like an ATM Machine.
Florida’s Retirement System (FRS) is doing OK overall:
…Over the past 20 years, the pension fund has seen an average annual return of 8.1 percent, above the 7.75 percent annual benchmark.
via Florida’s state pension ekes out small annual gain | Reuters.
And the interesting item in the article is the traditional Defined Benefit funds have averaged 11% over three years while the Defined Contribution funds have only grown a mere one percent (1.07%).
If the FRS system is successful with only a 3% contribution from the employees, why is Hollywood doing so poorly with a 9% employee contribution?
While Stockton is far away from Hollywood, Municipal Bankruptcy is still something to pay close attention to.
This article in the San Gabriel Valley Tribune is reporting some of the problems the City of Stockton is facing in their filing of Chapter 9 Bankruptcy protections.
One of the interesting lines in the article:
Multi-year labor contracts for city workers carrying escalating costs and generous retirement plans added to the burden.
A phrase that is appearing more and more often about Municipal Workers across the country….. Generous Retirement Plans. They make it sound like we Municipal Workers don’t work for and earn those retirement benefits. And just who, exactly, is deciding what is ‘normal’ and what is ‘generous?’
via Stockton: City set to become largest municipal bankruptcy in U.S. – SGVTribune.com.
We keep hearing a lot from our City Leaders about the ‘Huge Unfunded Liability’ in the Pension Plan. They make it sound like a group of pensioners are sitting on the front steps of City Hall demanding some insanely huge pile of money RIGHT NOW!
No. They aren’t.
No. Pensions don’t work that way.
Yes. There is an Unfunded Liability in the current Pension Plan. There always has been. And unless or until the Market starts returning very high double-digit returns there always will be an Unfunded Liability in the Pension Plan.
Don’t believe us? Read this little explanation from the Public Pensions Online website.
Two of the highlights from the linked article:
Florida local retirement plans covering police, firefighters and general employees are not
underfunded. They do have an unfunded liability. There is nothing intrinsically wrong
with having an unfunded liability.
Local government plan sponsors do not have to take drastic and immediate actions to
reduce or pay off the plan’s unfunded actuarial liability….
That last one kind of goes against the message the Commissioners were using last year with the Special Referendum, doesn’t it?
Read through the article. Get the word out. Share the link with anyone and everyone and let them see for themselves. It is a Pension, not rocket science. Don’t let them spin the message to their own ends because it is our ends that have worked for those very same Pension benefits.