Posts Tagged ‘pension’
President Obama’s budget, to be released next week, will limit how much wealthy individuals – like Mitt Romney – can keep in IRAs and other retirement accounts.
Under the plan, a taxpayer’s tax-preferred retirement account, like an IRA, could not finance more than $205,000 per year of retirement – or right around $3 million this year.
Read more by Karl Denninger at market-ticker.org
I’ve laid this out before but it’s time to do it again, because it’s coming folks.
The recent ditty on how “nobody needs more than $3m for retirement”, defined as “whatever you need to get a $200,000 annuity”, is just one facet of how this will play out.
Since I started writing The Ticker I have been repeatedly asked where one should put their assets to evade confiscation, whether through outright acts of theft, devaluation or any other means.
Read more by Karl Denninger at market-ticker.org
If Democrats have control of both the Senate and the House, as well as the White House we could all be put on the hook for not only Illinois’ pension liabilities, but those of every other state.
Read more at LouDobbs.com with video
More than 21,000 retired federal workers receive lifetime government pensions of $100,000 or more per year, a USA TODAY/Gannett analysis finds.
Of these, nearly 2,000 have federal pensions that pay $125,000 or more annually, and 151 take home $150,000 or more. Six federal retirees get more than $200,000 a year.
Some 1.2 percent of federal retirees collect six-figure pensions. By comparison, 0.1 percent of military retirees collect as much.
Read more by Dennis Cauchon of USA Today at CNBC.com
Milwaukee Mayor Tom Barrett has become the official poster child for Governor Walker’s budget reforms. That’s right. The unfailingly liberal mayor took a right turn on public employee benefits, and used the Governor’s reforms to save taxpayers $25 million a year.
In fact, during the debate over collective bargaining changes, Barrett even said the law requiring public employees to contribute to their health care and pension benefits didn’t go far enough because it excluded police and firefighters. Barrett complained that they were receiving “Cadillac benefits”.
Last but not least, Mayor Barrett sought to use the Governor’s reforms in order to get around a ten year old legal settlement with city workers. “It is my hope that all public employees should be required to pay more toward their pension,” Barrett wrote in a letter to Governor Walker.
The Wisconsin Club for Growth thanks Mayor Barrett for helping Governor Walker make his case. More importantly, we thank him for saving Milwaukee taxpayers as much as $36 million in 2012 through health care benefit changes he didn’t have to negotiate with unions, as a result of Governor Walker’s reforms.
Today, the Wisconsin Club for Growth launched several billboards in Milwaukee to thank Mayor Barrett— for using Governor Walker’s reforms! Now we need your help to keep them up.
Let’s help Mayor Barrett spread the good news that Governor Walker’s reforms are working!!!
Wisconsin Club for Growth
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
Common Council takes steps to end unusual practice
More than 30 Milwaukee city employees - including two aldermen and the elections chief - are simultaneously earning a city paycheck, drawing a city pension and building credit toward a second city pension, records show.
That unusual “triple-dipping” arrangement is legal in Milwaukee, at least for now.
But it’s not allowed in the state or Milwaukee County retirement systems, or at most - if any - other public pension systems around the nation, officials say. And the Common Council recently acted to prohibit a second pension for any retiree who is rehired after December.
“I just think one pension is more than adequate,” said Ald. Michael Murphy, a city Pension Board member who sponsored the measure.
But the ordinance couldn’t legally cut pension benefits for any of the 32 employees already on track for a second pension, said Murphy and Mayor Tom Barrett.
Among those employees, the top earner is Sue Edman, who is paid $83,117 a year as executive director of the city Election Commission and draws a $76,023 annual pension as a retired police captain, for a total of $159,140 a year. That’s almost $12,000 more than Barrett’s $147,336 annual pay.
Read more by Larry Sandler of the Journal Sentinel
A pension benefit that allows Milwaukee County employees to retire at 50 or in rare cases even younger carries a price tag of up to $90 million - much higher than the estimate given when the benefit was approved in the 1990s.
Fewer than 10% of public employee pension systems in the United States offer anything as generous as Milwaukee County’s “Rule of 75,” which allows employees to retire when their age plus years of service reach 75, according to a survey by the nonpartisan Wisconsin Legislative Council.
Milwaukee County employees gave up paid retiree health care for the younger retirement age, but the Rule of 75 and its potential expansion to cover more workers have county officials worried about runaway costs.
The program will allow Jack Takerian, the county’s transportation and public works director, to retire in April at age 47. His lengthy county tenure, starting with part-time work in high school as a lifeguard in 1981, will allow him to leave under the Rule of 75 and collect a pension of about $65,000 a year.
Read more by Steve Schultze of the Journal Sentinel
Reforms.wi.gov will show the results from the Administration’s reforms
MADISON – Governor Scott Walker’s office today released a new website, www.reforms.wi.gov that will help inform Wisconsinites about the results from the Administration’s reforms.
“Since our reforms passed a lot of people have wondered what kind of results we’re getting and why the reforms were necessary,” said Governor Walker. “Reforms.wi.gov shows the results from our reforms and how they’re working.”
So far local governments have saved over $450 million because of the reforms. That total is only the beginning of the potential savings. The savings are based on media reports and the Legislative Fiscal Bureau’s estimate on pension savings. For hundreds of governments there is no official estimate of savings from health contributions, but it is likely millions of dollars more.
Governments have seen savings not only from employee pension and health care contributions, but also by having the ability to do design plan changes and shop the market for better rates. So far governments have saved over $73 million through health plan savings.
Reforms.wi.gov goes beyond just the savings from pension and health care contributions to share how the reforms have improved government.
For example, in Baraboo School District is considering using the savings to rebuild the running track and athletic field at the high school, a project that had been on the backburner for years.
In Kaukauna, they turned a $400,000 deficit into a $1.5 million surplus. With the savings from the health care and pension contribution, they were able to hire additional staff to lower class sizes. The district is also now working on a merit pay proposal for teachers.
In Brown Deer, the reforms allowed the district to have teachers in contact with the students for only 310 minutes per day. According to the Finance Director, “if it got to be 311 minutes, they grieved it. You couldn’t even ask a teacher to walk her little first graders to art because that was 312 minutes.”
The website will be updated as more data becomes available and more results become public.
October 21, 2011
For Immediate Release
Contact: Cullen Werwie, 608-267-7303
On a day when the Green Bay Packers begin defending their Super Bowl title, it seems fitting that Wisconsin public-school teachers have begun running their own version of the famous Packer Sweep to get around the state’s new collective bargaining law.
Just last week, the Associated Press reported that teacher retirements had doubled as a result of Gov. Scott Walker’s new law requiring increased pension and health contributions by state and local government employees. As reported by the Milwaukee Journal Sentinel, many public workers feel “under attack” by the measure that required them to pay more for their health insurance and pension benefits and took away most of their ability to collectively bargain.
Yet, as the newspaper reported today, plenty of teachers are apparently willing to weather Walker’s “attack,” as many of them are returning to the classroom with different pay arrangements. The new collective bargaining law gives districts the flexibility to hire back recently retired teachers at similar or reduced salaries, without the districts having to pay the rehired teachers’ health or pension benefits. Teachers feigned offense when retiring, but now they are willing to work in these supposedly oppressive jobs while collecting both a current salary and generous pension benefits.
Therein lies the danger in this situation: Not only are teachers collecting a salary close to their original level, they are “double dipping” by collecting their pensions contemporaneously. Such double dipping arrangements have prompted scandals in other states; in 2010, Florida had to ban the practice altogether after nearly 9,700 workers were found to be benefiting from such arrangements. (The state instituted a six-month waiting period for retired workers to be hired back.)
By Christian Schneider at National Review
The revelation that a vice chancellor at the University of Wisconsin-Green Bay retired from his $131,000-a-year position and returned about a month later while continuing to draw his retirement benefit has prompted the state to launch an investigation into whether the move was made legally.
The university’s decision to rehire its top finance official, Tom Maki, also prompted state Rep. Steve Nass (R-Whitewater) to cancel a public hearing scheduled for Thursday on tuition legislation that’s supported by UW-Green Bay.
State law bars agencies from making an arrangement to rehire someone who is planning to retire before that person leaves. Nass said he suspects that’s what happened in Maki’s case. The university denies there was an arrangement.
By Sharif Durhams of the Journal Sentinel
Falling mail volume and soaring red ink may soon doom Saturday mail delivery and prompt three-day-a-week delivery within 15 years, Postmaster General Patrick Donahoe warns.
By Carly Mallenbaum, USA TODAY, 7/19/2011
Donahoe’s forecast is based on a projected $8.3 billion loss this year as the drift from paper to electronic communication hammers the Postal Service. “On Sept. 30,” he told the USA TODAY editorial board Tuesday, “I won’t be able to pay my bills.”
Chief among them: a $5.5 billion payment due Sept. 30 to cover future retirees’ health benefits.
By Steve Schultze of the Journal Sentinel , 7/15/2011
Milwaukee County Executive Chris Abele said Friday the county faces a 2012 shortfall of about $55 million, and he renewed blunt warnings about the inevitability of service cuts.
“There is no way we can avoid major cuts to balance the budget - and balance the budget is what we are going to do,” Abele said during a public briefing on county departmental budget requests for 2012.
Abele said the county was still laboring under heavy costs of lavish pension enhancements, approved a decade ago, as well as expensive sick leave and vacation benefits. He has proposed limiting payouts of accrued sick leave to 240 hours, but the County Board has not yet acted on the issue.
Abele has also called for a legal review of whether the “backdrop” lump sum pension benefit can be scaled back. The backdrop provides a lump sum for veteran workers who could have retired earlier, plus a monthly pension check.
Abele said his goal for 2012 was for the county to be able to deliver as many vital services as possible. He didn’t offer any new hints on cuts he’s contemplating for next year.