One of my mothers friends, who is now in her 80's, has been retired on a pension for over 40 years. She started working for her municipality right out of high school at 18, and worked 25 years as a clerk to get a full pension. Retired at 43(!) with 75% final pay (annually adjusted) and lifelong medical benefits.
Its totally insane and completely unsustainable. Back in the day people usually keeled over at 65 and the US was viewed as having achieved infinite growth forever, so perhaps back then it was a reasonable but generous offer. Today however it's just straight up corruption and waste to offer benefits like that.
Of course you can, especially when you look at the public debt racked up by the generation that is now retiring. Now, there will likely be consequences come election time, but math is math. The current generation of retirees spent too much and did too little to cover the costs over their working lives.
> If that’s your preferred method of balancing budgets then expect no sympathy when your company cancels your RSUs
I don't have RSUs at my current job. A significant plurality, if not majority, of laborers today don't either. If you're making $50k doing clerical work, have no RSUs at the company, and the company is having to make all sorts of cuts to meet pension obligations, what do you care about equities and their effects on current retirees?
At the job that I had that did have RSUs, I got about $3k, pre-tax, for all of them when the company was acquired by Oracle after about four years of cancelling raises, downsizing, and restructuring. I would have been far better off if that time had been spent by management giving COLA raises, if nothing else, given that this coincided with the COVID housing price and consumer goods inflation trend.
RSUs only really matter if you get a metric crapload of them, whether over decades or as a part of your compensation package, and only executives get that kind of volume.
Of course you can. Pensions are a form of debt. If the state is bankrupt, it's reasonable to trim its creditors. Pensioners included. (The politically-savvy way to do this is probably to spin off the pension fund as its own entity and then default on bonds, which the pension fund would hold alongside others. Then leave it to the pensioners to figure out how they haircut themselves.)
by that logic, sure, as shareholders in Meta (or any public tech co), we absolutely don't want employing expensive human devs to fund their retirement.
.. see where this is going
No? Shareholders don't want expensive devs, they want the profits expensive devs happen to produce.
The tax base is mobile in a way expenses are not.
I'll speak to this personally. In April 2021 New York City raised its top tax rates. I'm only moderately wealthy, but that prompted my moving out of the state.
Weird situation. Shrinking demographics in the 70’s led to layoffs. By their union contract layoffs were done strictly by seniority. Working on a contract that was stepped by seniority, this led to a very top heavy cohort of teachers 20 years later, who were being paid top of the scale. To redistribute the ages of service they offered a limited number of buyouts, which lowered their overall costs and normalize the pipeline.
This was also a legit and reasonably sustainable move as the NY State Teachers fund, is funded at 101% of liabilities.
Same as universal healthcare, seems like you net benefit by removing these burdens from localities and businesses.
No, it was a trade. You would accept low pay, very little opportunity for career advancement, and even if you worked hard to advance you were never going to more than double what you were making when you were hired. Also, government jobs are political jobs, are often eliminated on a whim, or you're forced to work unpaid for a while because of a budget vote.
In return, you got a pension. A pension that everyone understood the yield of, and everybody understood about what it was worth. It was entirely sustainable. The problem was and is that invested pension funds become underfunded because if instead of depositing the money, you spend it somewhere else and promise to put it back later, it's basically a low-interest loan. If the budget is tight enough (so credit is probably bad enough) that a state or municipality is considering raiding pensions, then this represents a huge amount of savings. The problem is that you're never going to pay it back.
Another problem is that managing those funds became lucrative for the managers, and for the products that they would steer these institutions into buying, often in exchange for kickbacks or in a complex web of self-dealing: Somehow, the person managing pensions funds for your state has them all invested in products sold by a company his son works for. His son didn't directly profit from the trade, but for some reason makes $500K a year, barely graduated high school, and nobody knows what he actually does there.
That's not the fault of pensions, that's the fault of thieves. What's unsustainable is a government that promises a pension in return for a shitty boring career as a clerk, and then after you retire from sitting in a DMV window for 25 years, takes the pension back. Nobody would accept a government job cheaply then, because the state has ruined its reputation in the same way as if they had defaulted on their bonds.
Nothing wrong if that's how we want to pay government employees: a days work for a days pay. But we got a discount because we didn't pay like that, and if we had, that money would just have been spent at the time, rather than being stolen throughout their retirement. Pretending like pensions were an unreasonable demand or an absurd promise is just laying groundwork to justify stealing from people who worked for a living.
edit: If government jobs were so good, why weren't they in demand? Does supply and demand only break down when we need it to?
Some go on to another municipal job and get a second pension so they get paid twice as much to do nothing in retirement. I know someone who worked for the USPS then on to the NYC DoE as a janitor in a school. His wife worked for the public school system as well, then went on to work in a catholic school after retirement. Three pensions in one household. They invest a lot into long term investments such as bonds, CD's and the like. I hear they have millions in the bank.
The people who worked those jobs are all sitting pretty right now. I know plenty of people who made out like bandits in various NYC agencies, especially in the DoE. My aunt left her heirs 2.2 million and a house worth a million from her pension money she heavily invested and was still able to travel the world in retirement. She was a secretary in a middle school. Amazing what you can do with tons of free time and money.
2) Although the factors you mention are real, they are much smaller than core issue, which is the state underfunding the pension, either explicitly or through unrealistic expectations of return.
3) Even granting that the present government should make sure that pensioners get their full benefits, why should current workers be the ones to bear the burden of past bad decisions by policymakers? You could just as well tax pension payments more highly, and use that revenue to fund the pensions.
That's one option. Another is better distributing productive capital. Building public housing so its occupants wind up owning it, for instance.
But that's getting into top-down redistribution at the federal level, which isn't in the cards for now. Within the context of cities and states, pensions are no longer a good idea.
I don’t think that retired fire chief’s (or school teachers') retirement is what’s wrong: what’s wrong is that most of us will not have a retirement that good. Why is that? It is possible to answer that question without tearing down someone else’s situation.
I don't think that's insane at all. Sounds pretty reasonable in exchange for taking at least one third of her time for 43 years of her life (and over those years where she was young and most healthy).
Corporations used to offer similar pensions all the time. They started offering them in 1875 and they were extremely successful doing it. 401(k) plans were a scheme to shift the risk and responsibility from the employer to the employees and that change made already wealthy and successful companies a lot richer, but at the expense of making many people work right up until the day they die, or they become too sick to work at which point they become impoverished. The move from pensions to 401(k) plans was bad for the economy, and for local economies in particular.
The only thing I think is crazy about it is the lifelong medical benefits which shouldn't be on the employer at all since everyone should have universal coverage.
Only a select few can acquire that kind of retirement and it's borrowed from everyone else. It's selfish.
The pension generations over spent and borrowed heavily to fund their retirement and lifestyles. The subsequent generations pay for that. It's selfish and short sighted.
Everyone who gives a company years of their life should be able to comfortably retire after decades of service, but companies have managed to convince workers that most of them should work until the day they die and only a small precious few deserve to retire and finally be allowed to spend time with their loved ones.
pension plans were not only sustainable since they started in 1875, but the economy thrived and companies grew powerful while workers had them. Historically, some companies tried to screw over their workers and mismanaged their pension funds, resulting in problems down the line, but that was mostly greed.
1) that guy gets your labor, for decades. 4 decades to be exact
2) for less than you'll get for that work
(that's what getting a higher pension actually means in the real world, with money being an abstraction and all that)
3) he (or she) doesn't get more because they worked harder or better, but because they were working when a random political vote needed to be made (paid for, really). And that, not only won't repeat, but there's absolutely nothing you can do to change the situation to your benefit, even just to equalize. That last part is of course what makes taking away their benefits attractive.
Sounds pretty unfair to me. At least with a CEO they did something to get what they got, and there is a way to get their position, even if most will never achieve that.
That's ~3.75 million dollars, plus probably another ~$250k benefits from when she turned 18 to today.
So $4 million dollars for 25 years of entry level work.
It works out to roughly paying a secretary at the municipal building $150k/yr to answer the phone? Do data entry? Collect payment for tickets?
You don't think $150k is insane pay for a municipal secretary?
So how would that work? The children that would need to provide that labor for me when I'm 65 would have to have been born already (they start work at, say, 20 years old). This has already happened, therefore, and cannot be fixed.
... which is of course another argument to take the pension away ... after all that's the only way to make it fair. You can play games with money, but money is an abstraction. You cannot raise up the necessary amount of people, the amount of people politicians promised us in trade for votes. It's not a matter of priorities anymore either, we're past the point where using 100% of the labor force would work.
I makes absolutely no difference what she was doing for the company because every second that she was on the clock what she wasn't doing was spending her time with loved ones, pursuing her own goals and interests, or even deciding for herself when she could have lunch or take a break.
Our time on earth is tragically short, and even someone pushing a broom for 8 hours a day is sacrificing decades of their life so that someone else can make money. Any work that needs doing and requires a person to make that sacrifice entitles that person to a living wage and a retirement. People should not have to work for someone else from the age of 18 until they drop dead.
why do you think the only way to improve things for workers is to lower the price of labor? Workers can get better benefits when others stop pocketing the money that should have gone to paying for those benefits. Maybe the CEO whose pay has gone up 940% while the typical worker's compensation has risen only 12% over the same amount of time can cut several hundred off that percentage, earn less but still obscene amounts of wealth, and provide better benefits for the workers they've been stealing from for decades.
Hell, on hackernews that average would be below what the vast majority here earn.
And, of course, if we're going to redivide earnings, that's what would be maximally fair: that everyone makes the average ... countrywide ... or $65k per year (before tax). THAT is what can be achieved by making things fair, under the absolute optimal circumstances (so in practice, let's call it 5% less than that at best)
No, thanks.
In fact, that leaves as the only real option making sure that $60k pays for a whole lot more. Which of course, if you want that to happen, requires the opposite from protecting labor: if anyone thinks they can do that, and succeeds, they should get a big reward for it ...