Posts Tagged ‘pension’
The Milwaukee County Board’s finance committee on Thursday decided against reducing future pension overpayments amounting to an estimated $10.3 million to 217 current and future retirees.
The committee instead unanimously recommended approval of a Pension Board proposal to retroactively change county ordinances that would result in keeping the improperly high payments flowing to the group. The vote was 8-0 to adopt the Pension Board’s proposal.
The committee rejected a counterproposal by County Executive Chris Abele to reduce future pension overpayments to the group.
This month, Abele stepped back from his April plans to recover as much as $26 million in past overpayments and interest and offered what he described as a compromise. The recovery effort was approved by the County Board in 2007 but never implemented.
Read more by Don Behm of JSonline.com
Abstract: Policymakers at every level of government are confronting the cost of fringe benefits for public-sector workers. The difficulty of placing an economic value on public employees’ pensions, however, means that policymakers rarely know whether benefits are excessive, especially as interest groups take advantage of the confusion by advancing misleading arguments. This paper discusses how to properly calculate the cost of public defined-benefit pension benefits, compares the cost of these benefits to private-sector retirement plans, and refutes two of the most common arguments that public pension benefits are somehow modest.
The generosity of public-sector pension benefits has come under increased scrutiny in recent years, as states and local governments search for ways to close their budget deficits. The intense battles over public-sector collective bargaining in Wisconsin and Ohio, for example, have been seen as conflicts over whether to reduce public-pension benefits for future retirees. Whether pension cutbacks are justified, however, depends crucially on whether existing benefits are excessively generous compared to those in the private sector. More broadly, policymakers cannot know if total compensation in the public sector—including salaries, benefits, and job security—is at an appropriate market level without a proper understanding of pension costs.
Read more by Jason Richwine, Ph.D. from Heritage.org May 31, 2012