Towns see bills spike after pension declines - Sentinel & Enterprise

On Sept. 29, 2008, the stock market plunged after Congress voted down the $700 billion bank bailout package. Full Story
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retiree

Worcester, MA

#1 Jan 17, 2011
unfortunately for municipal employees, they will have to face what the rest of have since the 1980s, give up their defined benefit plans in favor of defined contribution plans.

no employer can afford the old style plan anymore
voodoo economics

Fitchburg, MA

#2 Jan 17, 2011
4.7% annual increase for pensions.
at a time when revenues are limited to 2.5% increase on real estate.
and State revenue sharing is going down.
the mathematics don't add up.
you can only get so much cash out of cities and towns.
schools without teachers, fire department, snow removal, police,where does the extra money come from?
Watch city worker

United States

#3 Jan 17, 2011
Let's stop the pig-outs by the public employees and put everyone on 401-K and social security. There is no longer pensions for federal employees, why do state and municipal workers continue to receive this benefit?
Nope

Fitchburg, MA

#4 Jan 17, 2011
Some people need to re-read the article. This problem was created by the system that was in place through 1987, back then public employees contributed nothing to the retirement system. That is not how it is now. Public employees hired since 1988 are paying 9-11 percent into their own retirement.
haha

Maynard, MA

#5 Jan 17, 2011
Just to let you in the on the great big 1000lb pink elephant that the entire collective is choosing to ignore: much of these pensions were not invested in low-risk funds, but remain invested with mortgage backed securities that are leveraged to the stratosphere, and must eventually unwind. The various stages of QE that the FED is releasing to keep the biggest players from jumping ship is analogous to a thumb blocking a small but growing fissure in the hoover dam. The entire global financial system is going to change.
haha

Maynard, MA

#6 Jan 17, 2011
equally applicable in these times:

no one is listening

Boston, MA

#7 Jan 17, 2011
too bad we all can't have the tax payers make up for our loses in the market.
Elemenatry Penguin

Boston, MA

#8 Jan 17, 2011
These pensions should be phased out and eventually stopped. Problem is you have a lot of people who worked for 20+ years with the current system in place. You can't just yank away that $$$ cold-turkey. Like it or not they earned that and are legally entitled to it.
legal shmegal

Pepperell, MA

#9 Jan 17, 2011
Elemenatry Penguin wrote:
These pensions should be phased out and eventually stopped. Problem is you have a lot of people who worked for 20+ years with the current system in place. You can't just yank away that $$$ cold-turkey. Like it or not they earned that and are legally entitled to it.
We'll see when states start to declare bankruptcy. All the "legal entitlement" won't add up to a hill of beans.
haha

Maynard, MA

#10 Jan 17, 2011
maybe

AOL

#11 Jan 17, 2011
Watch city worker wrote:
Let's stop the pig-outs by the public employees and put everyone on 401-K and social security. There is no longer pensions for federal employees, why do state and municipal workers continue to receive this benefit?
a potential downside to putting them on social security is then the towns would have to start paying the employer portion which they do not do now. Pensions are funded by employees 9 or 11% of their salaries go into the pension, but the towns do make up the difference

Since: Sep 09

Location hidden

#12 Jan 17, 2011
HaHa is correct. Most cities and towns invested into HIGH risk investments. It had nothing to with who did or did not invest (put money in) to the investment. It is the money managers that got the money skimmed off the top end every time (a town) invested in their high risk investments. So if you want to track down the money look at the banks not the towns. The towns believed the "big boys" Bankers and investment houses. So look at Bank of America (BofA), Morgan Stanley, Citi group,Fannie Mae, Frannie Mac,UBS, and Chase Manhattan ect. Beginner website to look at: http://consumerist.com/
If you bank at a big bank you are part of the scam. If you have refinance and used your house as a credit card you are part of the scam. If you have lost your home you are part of the scam. If you bought a house in the last 10 years you are part of the scam. If you run up your credit card and only pay the interest you are part of the scam.
Silly people, the banks OWN you and our taxes. lol Educate your selves. Stop spending. You are owned.
David

Leominster, MA

#13 Jan 17, 2011
The teachers/police/fire fighters/public employees have done nothing wrong! They accepted a future pension in lieu of cash now in their pay check. The pension, that they pay 9-11% for is part of their compensation package. If the towns/state has not funded their portion properly it is not the fault of the public employee, it is the fault of the towns/state and must be corrected by them. It is not right, nor is it legal, to punish the employee for mistakes made by the employer. The employer has to suck it up and fix the problem, or get sued! It's money we should have been paying all the way along...time to bite the bullet and make things right. It's finally time that the Legislature did something to make towns fulfill their legal obligations!

What's really interesting is how many people are upset that the towns must now pay more so that "their annual increase rates down close to 4.75 percent from fiscal 2013 on." If you stopped the pension and put these people on SS, the town's responsibility for their SS portion would be 6.2%, or almost 1.5% MORE than you are currently complaining about!
Blogenburgian

Clinton, MA

#14 Jan 17, 2011
Why not just have the pension payout tied to the investment risk??
That;s how 401k's work.
crocker

Sarasota, FL

#15 Jan 17, 2011
legal shmegal wrote:
<quoted text>
We'll see when states start to declare bankruptcy. All the "legal entitlement" won't add up to a hill of beans.
It's not entitlement, silly. They contributed a greater % of their pay to their pension than non city workers contribute to Social Security.They earned it, and they don't get Social Security. People with your brain limitations should not be allowed to vote or reproduce.
David

Leominster, MA

#16 Jan 17, 2011
crocker wrote:
<quoted text>
It's not entitlement, silly. They contributed a greater % of their pay to their pension than non city workers contribute to Social Security.They earned it, and they don't get Social Security. People with your brain limitations should not be allowed to vote or reproduce.
Good points crocker! Not to mention that someday Social Security will need a bail out by the tax payers, and it will be those public employees that are not allowed to collect Social Security that will pay equal shares from their paychecks to bail out a system they are not allowed to collect from. Public employees will pay more from their paychecks to bail out Social Security than non-public employees will ever have to pay for the state pension systems.
David

Leominster, MA

#17 Jan 17, 2011
Blogenburgian wrote:
Why not just have the pension payout tied to the investment risk??
That;s how 401k's work.
Not the same. 401k's the person has direct control over where the money is invested, and how much risk they are willing to assume. With the pension somebody else decides what happens to the money, and how much risk they are willing to take with somebody elses money.
social security

Fitchburg, MA

#18 Jan 18, 2011
for the private sector social security system, everyone has access to their "investment".

from those who never contributed and are considered disabled, to refugees,mental due to panic attacks, kids on meds,every old person who has no other income, kicked off welfare, etc.

why should not everyone contribute to all this generosity of our federal government?

it seems unfair to me that only private sector workers are required to support the charity of our society.

and then,social security for only for 100k of income, so the most able to support the needy in our society don't pay their fair share.

our society does it's charity work at the expense of private sector workers.

that is sad.
maybe

AOL

#19 Jan 18, 2011
David wrote:
The teachers/police/fire fighters/public employees have done nothing wrong! They accepted a future pension in lieu of cash now in their pay check. The pension, that they pay 9-11% for is part of their compensation package. If the towns/state has not funded their portion properly it is not the fault of the public employee, it is the fault of the towns/state and must be corrected by them. It is not right, nor is it legal, to punish the employee for mistakes made by the employer. The employer has to suck it up and fix the problem, or get sued! It's money we should have been paying all the way along...time to bite the bullet and make things right. It's finally time that the Legislature did something to make towns fulfill their legal obligations!
What's really interesting is how many people are upset that the towns must now pay more so that "their annual increase rates down close to 4.75 percent from fiscal 2013 on." If you stopped the pension and put these people on SS, the town's responsibility for their SS portion would be 6.2%, or almost 1.5% MORE than you are currently complaining about!
While I support your point that employees have self funded a significant portion of the pensions from their own pockets-your other points are questionable
1) They may have had lower salaries in the past, that is no longer the case-public sector salaries are competitive with private
2) Cities and towns have funded the pension plans according to accepted accounting practice, further, most put an emphasis on maintaining services, i.e. SALARIES in lieu of other spending-you want to see more layoffs to fund pensions? OK.
3) There were no mistakes made by the employer-limited funds are allocated as fairly as possible-again, you can have a job, computers, cruisers, fire trucks,etc or fully funded pensions-which do you want?
-The private sector had to adjust compensation, pensions and healthcare to compete in this economy-why can't the public sector?
4) Not sure why we should all pay higher taxes as services are reduced to insure you and the other public sector employees avoid our national fiscal reality
5) I posted earlier it could be more expensive to convert to social security, but the percentage increase in pension funding is not related to social security %.
-each town needs to do the math to see which is less costly if its even an option.

The biggest issue with pensions is the ridiculous early retirement ages which not only drain funds, but also force cities and towns to fund 75%-90% of expensive health insurance plans until retirees reach medicare age, if their town even makes them take advantage of it.
This isn't an attack on public employees-it is a request that they share our realities
crocker

Sarasota, FL

#20 Jan 18, 2011
maybe wrote:
<quoted text>
While I support your point that employees have self funded a significant portion of the pensions from their own pockets-your other points are questionable
1) They may have had lower salaries in the past, that is no longer the case-public sector salaries are competitive with private
2) Cities and towns have funded the pension plans according to accepted accounting practice, further, most put an emphasis on maintaining services, i.e. SALARIES in lieu of other spending-you want to see more layoffs to fund pensions? OK.
3) There were no mistakes made by the employer-limited funds are allocated as fairly as possible-again, you can have a job, computers, cruisers, fire trucks,etc or fully funded pensions-which do you want?
-The private sector had to adjust compensation, pensions and healthcare to compete in this economy-why can't the public sector?
4) Not sure why we should all pay higher taxes as services are reduced to insure you and the other public sector employees avoid our national fiscal reality
5) I posted earlier it could be more expensive to convert to social security, but the percentage increase in pension funding is not related to social security %.
-each town needs to do the math to see which is less costly if its even an option.
The biggest issue with pensions is the ridiculous early retirement ages which not only drain funds, but also force cities and towns to fund 75%-90% of expensive health insurance plans until retirees reach medicare age, if their town even makes them take advantage of it.
This isn't an attack on public employees-it is a request that they share our realities
The early retirement age is often a cost saving adventure. A first year taecher makes much less than a 20 year veteran. In school systems administrators will often hire one with the least experience to save money. Only in education is the need to save money so great that experience and expertise are sacrificed. And if the pay is so good, why is it that in the top level classes, the brightest students do not opt to be educators. If you ask them, they will tell you-"not enough money." Certainly the amount of education required to be a teacher and the compensation given are disproportionate to other careers. Unfortunately, teachers cannot share your realities, they are not paid enough!

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