QuoteAlabama Town’s Failed Pension Is a Warning
RICHARD, Ala. â€" This struggling small city on the outskirts of Mobile was warned for years that if it did nothing, its pension fund would run out of money by 2009. Right on schedule, its fund ran dry.
Then Prichard did something that pension experts say they have never seen before: it stopped sending monthly pension checks to its 150 retired workers, breaking a state law requiring it to pay its promised retirement benefits in full.
Full Article:
http://www.nytimes.com/2010/12/23/business/23prichard.html (http://www.nytimes.com/2010/12/23/business/23prichard.html?_r=1&src=me&ref=metrojacksonville.com)
Great article.
Our city is broke.
Look up 2005-1007 and what other city in the country had legislative bennies for its workers. This is recent. Introduced 5 years ago.
We had a JCCI study-Our Money, Our City, Financing Jacksonville's Future
We were to have- Pension Reform
It is now -Pension Sustainability
Next year -The check is in the mail
What is the position of the Mayoral candidates and city council candidates on this issue. I couldn't tell you.
But it is safe to say that up until this point.
Public Service-Cha Ching
Ask the fathers of consolidation.
We may never see an opportunity like this for pension reform again. I would venture to say that more than half of our citizens have had either:
- layoff
- pay cut
- significant loss in retirement savings
For a mayoral candidate to suggest drastic pension reform in the past, probably would have been political suicide. Now, it could be the spark that gets them elected. What could complicate this is that some (and perhaps all) of the candidates are currently receiving a sizable pension themselves. Does anyone know the exact figures? That may speak volumes as to how much pension reform we could expect to see.
I hate all those financial doomsday people, but I really do think we're gearing up for some major state & local meltdowns coming our (America's) way. All those bailouts & printing money from thin air was just delaying the inevitable cold hard truth. This was talked about on 60 Minutes just days ago: http://www.cbsnews.com/video/watch/?id=7166293n
We've all been on this path on un-sustainability for so long that the chickens are finally coming to roost. And I don't mean just federal government, but state/local govs & our day to day lives in general (what we eat, where we shop, how we get around, etc). It's probably not going to be pretty, but it'll be healthy in the end because it'll get people to actually pay attention to these things & correct them for the greater good down the road. Our generation might be toast though (at least financially).
Steve Kroft: "Why aren't people paying attention?"
Meredith Whitney: "Because they don't pay attention until they have to."
That's the story of our lives. BTW, I wonder where Jax stands in all of this??
As I have said many times, I would vote today to trade my Jax police pension for the same State pension that the Mayor and City Council (as well as all other Florida Sheriff's Office's) get. But why didn't the "Fathers of Consolidation" do that? Why won't the current City government give it's workers the same pension fund that the Mayor and City Council paid millions of taxpayer dollars to get into a decade ago?
Citizens would be well advised to study up a bit on Florida pensions and high liability pensions in particular. If you are getting all of your information from the TU, or here, then you don't have all of the facts.
This really does get complicated.
Try here for a start:
http://www.coj.net/NR/rdonlyres/e4erh4yk5nzvpjdo6p3snrgjf7yjrftppibqefidrjqrnxypctvwekolfnshbxgznyp57pzxdd5llz4dwnv2s2sngqf/112208+-+Ronnie+Fussell.pdf
Tried the link but can't get through. Can you give us a synopsis?
The Florida Retirement System would place a fixed cost on the pension obligations of the COJ. It would fix Officer retirements to a State standard. JSO Officers would see a slight increase in benefits. JSO Officers would no longer be required to contribute to their pension, but would be required to make Social Security contributions. COJ would be responsible for Social Security contributions not currently made. JSO Officers would vest in six years. Current FRS retirees recieve medical insurance benefits, which JSO Officers do not.
Why would COJ want the Mayor and City Council on this plan but not other employees?
$$$$
Let's go one further. Let's reduce the benefits and increase the cost of pension to those same employees, regardless of the Jax plan's inadequacies when stacked against similar Florida plans.
You're right - it is complicated. Here is how my simple brain feels about it:
- JSO officers and their pension makes a little sense from the emotional standpoint of "these folks are out there putting their lives on the line, they deserve a little something back". Right or wrong, I don't believe that I am alone in that perception.
- It is a complete mystery to me why any other government employee (except firefighters - who I would put in the JSO category) would be entitled to such a benefit. Every place that I have ever worked gave me the option of putting some of my earnings in a retirement account and would match a percentage depending on my contribution. But there was never a guarantee of performance of any kind. It was (and has been) up and down with the market. That seems like a reasonable system for government employees as well.
I don't think it has to be complicated. We made it that way.
The link is to a memo to Ronnie Fussell written by the Pension administrator, explaining why the figures used in a city study are skewed. It explains much more clearly than I can, the twisted logic used to describe the fund as "unsustainable" and the effects of the city taking "pension holidays" and not paying into the pension in past years. It is located on the city site:
www.coj.net
under the Police & Fireman's Pension Fund Office site.
Stephen, what is your take on the pensions? For them or against them? I'm looking for the short answer.
I purposely stayed away from the computer yesterday to focus on time with the kids, but I was thinking about what I wrote regarding this issue. I try to keep my mind open to learn, and it kept occuring to me that perhaps I don't have all of the information here. So - to those who have really studied the issue - what do you think? Should we have pensions at all? If so, why?
I have the pleasure of working with city and state staff members on a regular basis. Most work just as hard and efficiently as people I encounter working for private companies. I feel they often get a bad rap from the anti-government crowd.
But why pensions as opposed to a competitive salary and contribution toward a retirement account?
(I fully agree that sprawl is a problem - and that eliminating sprawl will solve many problems - but I'm not sold that eliminating sprawl will resolve the budget problems associated with funding pensions.)
If you want to see Wackenhut run amok, go to Boca. The city has like 5 actual cops and thousands of private security guards hired by residents and the subdivisions. I bet it's probably more expensive than a traditional setup, but for whatever reason a private system that costs more is usually preferred by rightwing nuts to a public system that is less expensive and works better. So it's easier to go that direction than to expand public service. Go figure.
Regarding COJ's situation, I agree with NotNow, the alleged shortfall was created by COJ's own failure to contribute to the plan when the market was up, leaving it short when the market is down. Now that the chickens have come home to roost, they don't want to pay. It's B.S. and unfair to the plan members.
Police and Firefighter pensions are "high liability pensions". They can not be intermingled with general public worker pensions. High Liability Pensions also serve as the insurance for injured workers. If an Officer or Firefighter is disabled or killed on the job, the pension fund provides for their (or their survivors) livelihood. By supporting and contributing to the pension fund, the city is relieved of any responsibility. If you tried to just have a 401k and insure for the benefits, I'm sure that you overall costs would increase.
Private security is often preferred by those who want to be able to control which laws enforced or not. Private security will also enforce "policy" as well as State Statutes, public law enforcement will not normally do that.
Yeah you're right that's got a lot to do with it, you wouldn't get real cops to enforce who's allowed to be on the golf course when it's not their tee time, or what kind of plants people can have in their yard. And that stuff is definitely a lot of what people are concerned with in Boca. Still, I was always amazed at how an entire decent sized city is run almost entirely by Wackenhut. Every single community is gated with it's own private police force. The real cops pretty much just handle traffic and whatever happens in the public spaces. The whole setup just seemed like it must be ridiculously expensive.
About the pensions locally, it's a travesty what COJ is trying to do to you guys. And it's not like you can say the mayor and council don't understand the issues, since they moved their own pensions onto the state's plan to increase their own benefits. I guess those cutbacks are only a great idea when they involve other people's retirement.
QuotePolice and Firefighter pensions are "high liability pensions".
These positions... like the military... also "retire" long before workers in other professions. Very few cops, firemen, or military can stay in that prfession until retirement age.
You guys are talking about the police and fire pensions. What about the other city employees?
I must confess, I don't much about the city's pension plan. Exactly who is qualified to receive pensions? And how much for how long? How long do they have to work to qualify?