You may call me hopelessly old-fashioned, but I believe in loyalty. One of the ways in which we reward loyalty is a pension plan. In the case of state pensions (professors, teachers, firemen, policemen, etc), the standing argument is that many of these people took the good pension as a trade-off for lower incomes than they could get in industry.
Even the Soviets recognized that this trust was inviolate. Not so the corporate raiders, who started in about 1980 to raid the funds to pay for their purchases, totally destroying many of them in the process.
Today, the conservative US columnist George Will published a piece blaming California's financial ills on over-taxing the rich, and the 'generous' state pension system.
I find it a very odd coincidence that the very same day, conservative Republican lawmakers in Ohio announced that their public pension system is in trouble, and requires a major overhaul, to be done on the backs of the current retirees.
10 comments:
How do you see Brown's stealing of the pension funds, Paddington?
I am in the US, so I haven't followed it closely. However, I regard any such raiding, by anyone, as a violation of a sacred trust, and a deep indicator of moral bankruptcy.
It is for things like pensions that the working men protested and fought, and now rich want to take away the little that the retired get.
Yes there have been many violations of trust.
None more egregious than those in the public sector who:
retire early @ around 45 then move into another public sector job and pick up yet another public sector pension.
Accept 'golden good byes' in addition to the pension then move into another public sector job .. bla bla.
The violation of trust has been between the many politicians since WW2 who have promised ever increasing pension benefits to State employees, and the taxpayers of the present and future who will have to finance them, at considerable cost to their own standard of living.
If I were to promise you a sum of money every year in return for your past efforts on my behalf, and then were to die and expect my heirs to continue to work hard to make those payments, do you not think that my heirs would be slightly put out? That they would begin to question why they are working so hard in order to pay someone that never did anything for them? And that they might decide to renounce their inheritence and the debt that went with it? Leaving you in the lurch?
State employee pensions are a Ponzi scheme - the benefits are so generous that they can never be funded by the invested contributions of the employees. They rely instead on a constant stream of cash flowing in at the bottom from the millions of taxpayers in order to finance the generous pensions of the few at the top. If the generations to come decide they won't pay anymore, the whole house of cards falls.
Bernie Madoff is in jail for the rest of his life (and then some) for running such a scheme. The government runs a pretty much identical one, and its all legal.
Typical government attitude - don't do as I do, do as I say. Or else.
sobers - clearly, I have a vested interest, since I am vested in a government-supervised pension plan, which is completely funded by the employees. My contribution is 10-15% of my salary, which my employer matches. At the end of my career, in 15 years or so, I will have worked for the same place for over 40 years, and expect to live for about 10 more. With a modest investment return, I will get back less than was put in for me, at a salary about 50% of the income than I would have earned in private industry. Does that sound like a Ponzi scheme to you?
Loyalty used to operate both ways.
The employee worked loyally and diligently all his working life, the employer kept the trust and ensured the pension.
Both loyalties have been broken. The employer now hires and fires at will, and raids the pension fund or simply discontinues the scheme. The employee, seeing this, feels no obligation to the employer beyond the immediate present, and moves on/out whenever the fit takes him.
I have told my children - now all young men in their twenties - to expect nothing from anyone; they must thrive (or not!) on their own unaided efforts, and pay for it all - plus of course their share of the tax-eating hordes.
Oh, and "the state is not their friend".
Weekend Yachtsman - what you say is unfortunately true, but makes it virtually impossible to do long-term planning or improvements.
"At the end of my career, in 15 years or so, I will have worked for the same place for over 40 years, and expect to live for about 10 more."
Rather longer, I'm prepared to bet, and three digits is not unrealistic. I understand that we are expecting 100,000 centenarians in the Uk by mid-century.
Sackerson - given that my father died at 55, I will not count on much past that, and hope for 75. My biggest fear is decay of the mind.
Too late, haha!
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