Pushing the case for cost-cutting pension reform

A leading advocate of the view that public pensions are alarmingly underfunded thinks rising costs could, in the next five to ten years, push some cities into bankruptcy and some states into insolvency.

Joshua Rauh, a Stanford University finance professor, said in a new study issued by the Hoover Institution that 564 state and local pensions systems reported a “net pension liability” of $1.2 trillion under new government accounting rules.

But Rauh believes the debt is nearly three times larger, $3.4 trillion, because the pension systems, even under the new rules, use an overly optimistic annual earnings forecast, 7.4 percent, for investments often expected to pay two-thirds of future pensions.

Rauh used a 3 percent risk-free Treasury bond rate. That not only follows the basic principles of finance, he said, but is more realistic given low interest rates, the failure of pension funding levels to recover after a major bull market, and other factors.

“More and more money is going to have to go into these funds, and you are going to see more and more bankruptcies along the likes of Detroit, San Bernardino, Stockton, California,” Rauh told CNBC last week. “And over a five- to ten-year horizon, I would expect there to be a number — many, many more cities going bankrupt and many states that are insolvent.”

Rauh

Rauh


Most state and local governments in the nationwide study contribute 7.5 percent of their revenue to pensions, Rauh’s study concluded, but need to contribute 17.5 percent to keep pension liabilities from rising.

“Even contributions of this magnitude would not begin to pay down the trillions of dollars of unfunded legacy liabilities,” he said. None of the “50 worst cities” listed in the study, ranked by additional contributions needed to prevent more debt, are in California.

An oncoming wave of bankruptcies may be an extreme view, not to mention a 3 percent long-term earnings forecast. But a Citigroup study last month shares Rauh’s view that exposing “hidden” pension debt is a first step toward public pension reform.

Citigroup estimates that the total unfunded government pension liabilities for 20 industrialized countries is a “staggering $78 trillion,” nearly double the $44 trillion they have reported.

“Making these contingent liabilities more clear or complete is the first step towards further pension reform to address the increased risks from a rising dependency ratio (retirees vs. active workers) and a rising cost burden of public pension systems,” said Citigroup.

Last week, a state Senate committee rejected a bill requiring the nonpartisan Legislative Analyst’s Office to create an internet website listing major state debt, including pensions and retiree health care, that also would be shown on a page in the ballot pamphlet.

State Sen. John Moorlach, R-Costa Mesa, said his “California Financial Transparency Act” (SB 1251) would give voters “basic reliable nonpartisan financial information” as they consider bonds, spending measures, and candidates.

Moorlach, an accountant and financial planner known for predicting that risky investments would lead to the Orange County bankruptcy in 1994, created a website to show what the basic financial information might look like.

The bill, rejected on a party-line vote, was opposed by public employee unions who argued that ballot measures have a nonpartisan financial analysis and that the broad debt numbers have no direct relation to ballot measures, lack context and might confuse voters.

SB1251

Pension debt can seem distant, with most bills not due for decades, and unpredictable or even unknowable as the reported unfunded liability swings up and down with the stock market and the yield from huge investment funds.

The bite taken from employer budgets by annual contributions to the pension funds is less abstract. Some call it “crowd-out” as growing pension costs reduce the money available for basic government programs, services and personnel.

Stephen Eide of the Manhattan Institute issued a California Crowd-Out study last year that found, among other things, government staffing in December 2014 remained 8 percent below the December 2007 level, while private-sector jobs were 2.4 percent higher.

The “crowd-out” from pension and retiree health care costs was an issue as voters in San Diego and San Jose overwhelmingly approved cost-cutting pension reforms four years ago.

The ballot pamphlet argument in San Diego said Proposition B means more money for “fixing potholes and street repairs, maintaining infrastructure, restoring library hours, and re-opening park and recreation facilities.”

In San Jose, the ballot argument for Measure B said: “Retirement costs consume more than 20% of the general fund and are projected by independent actuaries to increase for years. This is unsustainable.”

With “spiking,” pension excess becomes even less abstract and gets a face. For example, an Orinda-Moraga fire chief, who retired in 2009 at age 50 with a pension much larger than his salary, told the Wall Street Journal he was a “poster child” for spiking but didn’t make the rules.

Last September, the Contra Costa pension board voted to reduce Peter Nowicki’s initial pension, $240,923 a year, to an amount, $172,818, that is below his final base pay, $193,281.

A review by a law firm found that Nowicki, with two contract amendments, inflated the final pay used to calculate his pension, mainly by cashing out unused vacation time with smaller amounts from holiday, terminal and retroactive base pay.

Manipulating final pay to improperly boost pensions is a common spiking method, surfacing sporadically in well-publicized incidents over the past half century. The two big state pension systems, CalPERS and CalSTRS, both have anti-spiking units.

Implied pension excess surfaces in several ways. The Los Angeles Times reported this month that at least 17 legislators including Moorlach are “double-dipping,” collecting their state salaries and a public pension from another government job or office.

The “$100,000 pension club” of retirees with big pensions was posted on the internet a decade ago by a reform group led by Marcia Fritz. Another group, Transparent California, now has a searchable database of state and local government pay and pensions.

“The main thing is to engage people when you talk about pensions, because it’s boring to people,” Fritz, president of the California Foundation for Fiscal Responsibility said in 2011. “When we put the list up, it was the same reaction as ours — unbelievable.”

Whether through debt, crowd-out or excess, the public seems to have received a message about pensions from somewhere.

A statewide Public Policy Institute of California poll issued in January 2014 found that 85 percent of likely voters think the amount of money spent on public pensions is somewhat of a problem and 73 percent support switching new hires to a 401(k) plan.

Reporter Ed Mendel covered the Capitol in Sacramento for nearly three decades, most recently for the San Diego Union-Tribune. More stories are at Calpensions.com. Posted 18 Apr 16

25 Responses to “Pushing the case for cost-cutting pension reform”

  1. Dale Says:

    Ed,

    You write that “crowd-out” from pension and retiree health care costs was an issue as voters in San Diego and San Jose overwhelmingly approved cost-cutting pension reforms four years ago.”

    Any reason you failed to mention that the San Jose City Council recently voted to overturn that measure, asi it devestated city services, particularly the police department. Seems the “take the axe to public pensions ” approach of the Chuck Reed’s of this world doesn’t work when applied in real life.

  2. Dave Says:

    Dale, the real devastation is still to come. San Jose is not out of the woods. The city and its citizens were trying to solve a serious problem. If there is pain along the way, they will have to deal with it. We all have to deal with it. Once enough distressed cities rein in compensation in order to avoid financial disaster, the police and safety people will have to find another state to migrate to. California is wrecked. Police and fire compensation are killing the cities they have pledged to serve. We have military veterans who can do the work. Yes, it will take time for a transition, but the reality is that something must be done. The rubber is meeting the road right now around the country. The roads have potholes to underscore the issue.

  3. skippingdog57 Says:

    Dave, Perhaps you’re not aware that a very high percentage of police officers and firefighters ARE military veterans.

  4. Andrew Kubik Says:

    The Hoover Institute is ultra-conservative, so I would consider ulterior motives on the part of both the ‘advocate’ and his sponsor. This isn’t any different from some uber -liberal getting something published trough one of their mouthpieces. Credibility lies somewhere in the middle, and this sure isn’t IT !

  5. Tough Love Says:

    Quoting Dave….. “Once enough distressed cities rein in compensation in order to avoid financial disaster, the police and safety people will have to find another state to migrate to. ”

    Yes, and THAT won’t work out well for those CA officers, becuase their CA pension would than be FROZEN.

  6. Dave Says:

    Certainly aware of that. I don’t fault anyone from becoming a police officer. As a friend just told me recently who works for the SFPD, the “salary, benefits and retirement age is great. He loves his job, too.” The point is that compensations has to be affordable. It is not. I’m not mad at my friend or any person who works in public safety. As I said, the compensations is unaffordable and I believe that it is overly generous — especially for fire safety. BUT the point is that it is unaffordable and the true cost has been hidden for decades. Now as cities and towns struggle to keep a float, it is coming into the limelight.

  7. leretort Says:

    Using the 3% number is pure propaganda. Why doesn’t he show the 20 year average? Maybe because it will blow his opinion out of the water.

    You know an article is propaganda BS when the writer quotes Moorlach. The LA Times just called him for trying to cut cops pensions and then taking his from Orange County, AND THEN collecting a double dipper state paycheck.

    Not taking an honest look at what Chuckie Reed did to public safety will doom other cities. And if they pass a state wide measure, you’ll see a retirement tsunami in public safety that will empty jails and prisons.

  8. john m. moore Says:

    The Hoover Institute ultra conservative? Hardly, and Prof Rauh is a full professor at Stanford. He said the true pension deficit is three times larger than the Hoover number.
    But the biggest deficits are still on the way, because no Agency can win over time. DB plans based on a 7.5% per year investment growth rate will continue to grow deficits well beyond the taxing power. As Dr. Rauh says, how long it takes each agency to become insolvent depends on the stock market, which is expected to earn about 3% a year for years to come.
    Rah Rah songs about not being able to hire safety officers are dependent on who does the hiring. If with the consent of a Union member, no one seems to qualify. Bakersfield adopted 3%@50, but could not afford it, so reduced it to 2%@50 for new hires: there were three hundred applicants for three spaces the first year. There are about 180 cities and counties that pay 2%@50, and they do very well. But talk doesn’t matter. It is all over but the shouting: because of the phony bargaining system Ca. went from the best to the worst in every government service. The govt. agencies should be so proud.

  9. spension Says:

    I wonder if military pensions themselves are accounted for in the debt calculation.

    You can start taking a military pension at age 37, and most of the military pensions are pay as you go, with no pre-funding and investment.

    Would be great if every pension debt calculation had a line that said, `if debt calculated like military pension, would be XXX trillion’. Instead of Rauh’s $3.4 trillion, would be more like $10 trillion.

  10. Steve Says:

    And like clockwork Johnny Moore stumble in with his usual nonsensical anti-public employrr rants.

    Sad, but it’s all Johnny has following his failed Mayoral campaign in Pacific Grove, his failed efforts to reverse pension benefits for public employees in Pacific Grove, his major sad that three times Reed/DeMaio failed to put an anti-pension initiative on the ballot in the past year….

  11. S Moderation Douglas Says:

    As leretort Says:

    “Using the 3% number is pure propaganda.”

    Kinda sorta. It’s used so much that it does get scary, but, at some point, Rauh and the others who insist on 3% discounting will include the caveat:

    “This logic does not necessarily imply that governments should invest pension money in risk-free assets. It does, however, imply that when measuring the value of the liability, governments should reflect the fact that the liability is a debt that is guaranteed.”
    (page 5)

    It is a lot more complicated than this article or Rauh’s paper make it seem. And, if you read the study, Rauh himself is not actually “Pushing the case for cost-cutting pension reform”. He is only laying out the reasons for underfunding. It is some of the others (using Rauh’s projections of increased cost) who are pushing for pension reform. (And “pension reform, by the way, is a euphemism for ” reduction.

  12. Tough Love Says:

    Ed,

    Since you mentioned “Transparent California”, they just published some new (2015 retiree) pension statistics here:

    https://blog.transparentcalifornia.com/2016/04/19/four-los-angeles-retirees-collected-1-million-plus-pension-payouts-last-year/

    It shows that the average starting pension for a 2015 retiring LA Safety worker (Police and Fire) is over $101K, and the average starting pension for a 2015 retiring LA non-Safety worker is just shy of $72K annually.

    Taxpayers should keep in mind that the $101K average 2015 full-career safety pensions, and the $72K average full-career 2015 non-Safety pensions need to be MATERIALLY adjusted for an apples-to-apples comparison with the pensions of comparable and similarly situated (in pay, years of service, and age at retirement) Private Sector workers.

    That is because:

    (a) CA Public Sector pensions are COLA-increased, while employer-sponsored Private Sector pensions VERY rarely include annual COLA-increase provisions. This ALONE increases the value of Safety pension by about 30% and non-safety worker pensions by about 25% (lower because they typically retire at age 60 vs 55 for Safety workers).

    (b) While PUBLIC Safety workers and non-Safety workers can collect their FULL/UNREDUCED pensions at age 55 and 60 respectively, the Private Sector worker (who cannot typically do so until age 65) would get a reduction in the otherwise calculated pension of about 5% for EACH year of age that they retire before age 65.

    So here are the adjustments to arrive at an apples-to-apples Public/Private Sector pension “value” comparison:

    For non-Safety workers, the $72K pension INCREASES to $72K x 1.25 (from (a) above) giving $90K, while (from (b) above) the Private Sector worker’s pension DECREASES by (65-60) x 5% = 25% from $72K to $54K.

    For Safety workers, the $101K pension INCREASES to $101K x 1.30 (from (a) above) giving $131.3K, while (from (b) above) the Private Sector worker’s pension DECREASES by (65-55)x 5% = 50% from $101K to $50.5K.

    If we stopped THERE the non-Safety Public Sector worker’s pension would be $90K/$54K = 1.67 TIMES greater in “value at retirement” than that of their Private Sector counterpart, and the Safety worker’s pension would be $131.3K/$50.5K = 2.6 TIMES greater in “value at retirement” than that of their Private Sector counterpart.

    But even those adjustments materially UNDERSTATE the Public/Private Sector pension “value” relationship, because until THIS point, the calculation assumes that the DB pension “formula-factor” for the Private Sector Plan is the SAME as that granted the Public Sector non-Safety and Safety workers. Clearly it is NOT, and TYPICALLY, Public Sector non-Safety worker pension Plan “formula-factors” are 50% greater than those of Private Sector pension Plans, and for Safety workers, the “formula-factors” are typically DOUBLE that of Private Sector pension Plans.

    Hence the 1.67 times greater pension “value” for non-Safety workers must be increased to 1.67 x 1.5 = 2.50, and the 2.6 times greater pension “value” for Safety workers must be increased to 2.6 x 2.0 = 5.2.

    The above fully* reflects the HUGE advantage that CA’s Public Sector workers have over their Private Sector counterparts, with non-Safety worker pensions being 2.5 TIMES greater in “value at retirement”, and with that 2.5 TIMES rising to 5.2 TIMES for Safety workers.
    —————————————————————–
    * while FULLY reflecting the difference in “pension” value, it does not reflect the fact that virtually all Public Sector workers get free or heavily subsidized Taxpayer-funded retire healthcare benefits, while employer-sponsored retiree healthcare benefits are indeed a rarity in the Private Sector today.

  13. S Moderation Douglas Says:

    So, speaking of TransparentCalifornia,

    Mr. Fellner once challenged a poster for citing the “average” wage for Santa Clara County, 
    Fellner:
    “The BLS reports the median earnings for a full-time, year-round worker in Santa Clara was $68,586 in 2013. That link is also in Ed’s article.

    These are the relevant, comparable numbers.

    The data you cite is not.

    It simply adds up the total wages paid and divides them by total employees. That is not a good predictor of what the average worker receives.

    The BLS reporting the median earnings is a good predictor of what the average worker receives. This data comes from individual employees’ actual earnings. Not gross receipts that sum total wages paid in the county divided by total number of employees.

    Here’s an example of why.

    There is a 10 person firm. The CEO makes $1M and the 9 employees make $75k.

    The median earnings in this firm is $75k. That’s what most people make.

    The averages wages paid, however, would be $167,500. That’s not what most people make, and 90% of the firm would take objection to you acting like since they “already make, on average $167,500″ are in no need of a raise.”
    __________________________
    (In the article in question, though, the author had compared the “average” public pay to the “median” private pay. What’s worse than that?)  
    Maybe comparing average “total compensation” to median “salary” only:

    “(1)  These workers are very well paid. The average nurse collects a compensation package worth $183,822 per year. The average janitor collects a compensation package worth $76,309 per year. By comparison, according to the U.S. Census Bureau, the median annual earnings for a full-time, year-round civilian employed worker in Santa Clara County in 2013 was $68,586, one of the highest in the nation.”
    ___________________________________
    Okay, water under the bridge, so to speak.

    But I have noticed that in the TC “studies” for public sector workers pay, benefits, and pensions, Mr. Fellner always uses “averages” rather than medians. If he could give both when he cites this data, we might be able to make more relevant comparisons. 

    If you would like other constructive criticism of TransparentCalifornia, just let me know. I’ll be here all week.

  14. S Moderation Douglas Says:

    Three lawyers rent a hotel room for the night. When they get to the hotel they pay the $30 fee and then go up to their room. Soon the bellhop brings up their bags and gives the lawyers back $5 because the hotel was having a special discount that weekend. So the three lawyers decide to each keep one of the $5 dollars and to give the bellhop a $2 tip. However, when they sat down to tally up their expenses for the weekend they could not explain the following details: 
    Each one of them had originally paid $10 (towards the initial $30), then each got back $1 which meant that they each paid $9. Then they gave the bellhop a $2 tip. HOWEVER, 3 • $9 + $2 = $29 
    The lawyers couldn’t figure out what happened to the other dollar. After all, the three paid out $30 but could only account for $29. 

    What happened to the dollar?

    ???????????????

    Makes more sense than “Hence the 1.67 times greater pension “value” for non-Safety workers must be increased to 1.67 x 1.5 = 2.50, and the 2.6 times greater pension “value” for Safety workers must be increased to 2.6 x 2.0 = 5.2.”

    Over eighty percent of public workers have defined benefit pensions. Fewer than twenty percent of private sector workers do. The comparison is specious. You cannot compare public pensions to the “pensions” of the eighty percent of private workers who have …no… pensions. You must compare the pay …plus… pension of the public worker to the pay alone of the private. Or to the pay …plus… pension of those private workers who still have DB pensions. Comparing pensions alone is invalid. Always has been. It is common knowledge that public pensions have more generous formulas than private. It is also shown by most major studies that public cash wages is about twelve percent on average less than for similarly situated private workers. The proper question is, is the higher pension of the public worker offset by the lower cash wages?

    The answer has always been, total compensation for the lower ranks of public workers is higher than their private sector counterparts; total compensation for the higher paid groups of public workers is much less than similar private workers, and somewhere in the middle they are “roughly equal.”

    The comparison of public vs. private total compensation is valid. The comparison of pensions outside the context of total compensation is not. Comparison to two decimal places based on assumed or “typical” formulas is just silly.

    It took SurfPuppy over four years to finally be convinced that a change from 2%@50 to 3%@50 was NOT a “fifty percent increase in pensions (except for those few who actually retired at 50) because of the graduated feature of the 2%@50 formula (to 2.7%@55). Tough Love may never understand that his math, while true, is also moot, irrelevant, and misleading. Hopefully other readers will be able to get the point and ignore his specious math.

    What did happen to that dollar?

  15. Tough Love Says:

    SMD, My math (as exemplified by my above comment), is true, and neither moot, irrelevant, or misleading ….. but I must admit, you are indeed skillful in your attempts to mislead and confuse those without a full understanding of the issues.

    You’d make a great politician.

  16. S Moderation Douglas Says:

    Maybe SurfPuppy can explain it to you.

  17. Tough Love Says:

    SMD, You pose a math riddle a smart middle schooler could solve…,that being that hey did NOT spend $9 • 3 + $2, but only $27 dollars, $25 for the room plus a $2 tip.

    Please tell the readers how you make the instantaneous jump form your juvenile math riddle to a conclusion that (my earlier comment) …..

    “Makes more sense than “Hence the 1.67 times greater pension “value” for non-Safety workers must be increased to 1.67 x 1.5 = 2.50, and the 2.6 times greater pension “value” for Safety workers must be increased to 2.6 x 2.0 = 5.2.”
    ———————————-

    What never do is directly respond/answer with “facts” to disprove anything, just inundate the soup bowl with ingredients to confuse the chefs …. in this case, readers, few of whom have the wherewithal or time to sift through your answers for any real substance.

  18. S Moderation Douglas Says:

    Thank you love. You did well. The “instantaneous jump” is what I have been trying to tell you for years. Math itself is fairly easy and straightforward. The big difficulty is when we get to fifth grade and start doing “word problems”. If you don’t set up the question properly, you will never get the right answer. That is the connection. The lawyers did not set up the problem correctly. One of your previous statements:

    “My “beef” isn’t really with what you did (or what any other Public Sector workers do) but the undeniable FACT that Taxpayers are unjustly FORCED to provide you with Total Compensation (via pensions & benefits ROUTINELY 3, 4, 5 even 6 times greater in valise upon retirement than those of comparable and similarly situated Private sector workers) FAR greater than necessary, reasonable, just, fair, or affordable.”

    Without the unnecessary rants:

    1) Total Compensation greater than necessary

    2) Because (via) pensions and benefits greater in valise (sic)

    3) For “comparable and similarly situated Private sector workers”

    By “greater than necessary” we mean public sector total compensation is greater than private sector. It’s a given (*almost) that public sector pensions and benefits are a greater portion of total compensation than in the private sector. Your math “proves” something that is already known. Your math is for “similarly situated Private sector workers” (SAME pay, SAME age at retirement, SAME length of service) …NOT for “comparable” workers. That is the fourth SAME I have been trying for years to tell you that you are missing.

    I believe you have written before that you sometimes demonstrate a principle by giving the extreme examples. Our old friend Biggs has done that for us. For those not familiar:

    “Overpaid or Underpaid? A State-by-State Ranking of Public-Employee Compensation” American Enterprise Institute
    Biggs and Richwine, 2014

    Table 4, page 60

    In every case, based on real life data, public sector pension costs, as in your math, is greater than for the private sector.

    In the example of the HS graduate, the higher pension cost coupled with “similar” wages results in a 19% advantage for the public sector worker.

    In the case of the “professional” or PhD, the higher pension value combined with lower wages results in a 17-18% DISadvantage in total compensation.

    I suppose you could say in the case of the workers with less than a college degree, the total compensation is “FAR greater than necessary, reasonable, just, fair, or affordable.”

    Hell’s yeah!!! 19% is a damn big difference. The public sector guy is making TEN THOUSAND DOLLARS a year more than the private sector. (Most of that in pension and health care …wages are nearly equal.)

    But those at the top end, even if their pensions are “3, 4, 5 even 6 times greater in valise” (sic), still have a lower total compensation than the private sector.

    18% lower. That is thirty thousand dollars a year less than “comparable and similarly situated Private sector workers.”

    THIRTY THOUSAND DOLLARS less.

    Caveat: this particular example (Biggs table 4) I used to demonstrate the principle that (admittedly) higher public pensions cannot be taken out of context. Pensions, benefits …and… wages must all be factored in to determine comparable total compensation. Table 4 is nationwide average data. Almost all state have average public sector wages lower than private, and public sector benefits higher. But there is a big difference from state to state.

    Also, while the Biggs data is very interesting and informative (I highly recommend reading this entire study …at least twice) there are other studies done at about the same time which have much different results, and ALL these studies are based on data four to seven years old. A lot has changed in those seven years.

  19. S "Facts" Douglas Says:

    *
    From the previous post:

    “It’s a given (*almost) that public sector pensions and benefits are a greater portion of total compensation than in the private sector.”

    Never say never. All pensions are not alike, public or private. This subject came up on another board

    https://burypensions.wordpress.com/2016/04/16/mpra-more-political-revenue-anticipated/

    Public sector (New Jersey state) truck drivers earn a maximum $48,000 a year, and at age 60 with 35 years service qualify for a pension of $2,556 per month.

    Private sector drivers in the same area earn an average of $45,000 to $55,000 a year and with 35 years service (at any age) qualify for a pension of up to $4,200 per month.

    That’s just one example. The big difference here apparently is that these pensions are based on years of service only, not final average salary Who knows what other formulas are out there, in either sector?
    _________________________________

    TL: “What never do is directly respond/answer with “facts” to disprove anything, just inundate the soup bowl with ingredients to confuse the chefs …”

    “Facts” is my middle name, Love. Sorry it confuses you. You’re the one doing math to two decimal places based on assumptions. Most public pensions have COLAs, but with widely varying formulas. And “FULL/UNREDUCED pensions at age 55 and 60 respectively,” is not universal. There are a great number of different formulas.

    Biggs is facts (old, but good for examples)

    New Jersey pensions is facts.

    I am the fact man.
    LP

  20. S Moderation Douglas Says:

    What happened to the dollar?

  21. Tough Love Says:

    I have addressed EVERYTHING that SMD brings up in his above comments so many times it seems pointless to do so again, but as an example of the continued way SMD misleads and distorts the truth, read on ……

    SMD quoted ME as follows ….

    ““My “beef” isn’t really with what you did (or what any other Public Sector workers do) but the undeniable FACT that Taxpayers are unjustly FORCED to provide you with Total Compensation (via pensions & benefits ROUTINELY 3, 4, 5 even 6 times greater in valise upon retirement than those of comparable and similarly situated Private sector workers) FAR greater than necessary, reasonable, just, fair, or affordable.”

    A statement I stand by as strongly today, as ever.

    But SMD then goes on (in his above comment) to say ….

    “It’s a given (*almost) that public sector pensions and benefits are a greater portion of total compensation than in the private sector. Your math “proves” something that is already known. ”

    Read that a few times, and it becomes obvious (via the huge disconnect between what I said, and his conclusion) how SMD tries to whistle-past the undeniable math that Public Sector pensions & benefits are grossly excessive, by attempting to move the discussion to …. not the excessive pension amounts THEMSELVES …. but to a statement on the SHARE of Total Compensation that comes for pensions & benefits.

    SMD’s comments DEPEND on such slight of hand … always …. “smooth” the conversation away from what is the RELEVANT (that being the Grossly excessive, unnecessary, unjust, unfair, and affordable Public Sector pensions) to something else …. ANYTHING ELSE.

  22. S Moderation Douglas Says:

    Thank you, Love. I just won a bet.

    When it hits you, remember, “I told you so!”

  23. S Moderation Douglas Says:

    And my hands are just as large as anyone’s.

  24. spension Says:

    So anyone know what the US Debt current value for Military Pensions is? Is there a TransparentMilitary that lists all those pensions, age at first payment, etc?

  25. spension Says:

    Found an estimate of the the unfunded liability of the military pension system at the end of FY2013… $885.1 billion. Probably does not use the risk free rate of Rauh.

    Have found that while the US allows military retirees to start drawing pensions at age 37, 2.5% per year of service. T

    The UK starting age for military pensions is 55, and Sweden is 61.

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