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View Full Version : A modest pension proposal, whadya think?



Soflasnapper
07-07-2011, 04:36 PM
I've had an idea for some time now that could save governmental bodies a lot of money over time.

Cap all public pension cpi increases at the maximum such increase available at a max SS payment's equivalent.

I think it's true that a top SS monthly payment is maybe $2200. If the cpi came in at 2% a given year, that would be a $44 increase a month (= $528 a year). Make this figure the maximum COLA increase that ANYONE receiving a public pension can receive.

Say, for example, some pension (or combination of pensions) is $80,000 annually. That 2% increase on that amount is $1,600 a year, (= $133.33 a month). Capped at a $528 increase for the year instead saves $1,072 a year (less savings proportionally for a lesser pension amount).

Once this is done, there is a terrific accumulative effect. In year two, using the example's numbers, same 2% cpi and same caps, now whichever governmental body is paying the pension saves $2,144 in THAT year alone compared to now, totaling a savings to the taxpayers funding that governmental body of $3,216 over just two years. And so forth.

If we simplify by rounding down the first year savings $1,000, then over a 10-year period, you save in each equivalent year out approx. 1+2+3+4+5+6+7+8+9+10 thousands, = $55,000. If there were 1 million pensions that large, that is a savings of $55 billion over 10 years. $80k is by no means the largest pension out there (see California and its Calpers program figures. There are 6-figure pensions, and up to mid-6 figure pensions ($500k and more).

There's no doubt that curbing and capping cpi increases to the SS max cpi increase would erode the purchasing power of the pension. Yes, it would.

But pay attention to what alternative treatment of pensions under SS reform is being suggested now. The suggestion is that the SS increases themselves be trimmed, by using a different, lower formula related to gdp, not cpi. THAT would erode the minimal SS pension below its current stingy level of benefits and increases, on the backs of some of the most needy.

cushioncrawler
07-07-2011, 06:33 PM
Finance etc inklooding pensions etc and investment etc duznt make the usofa cake any bigger.
It only affekts the cutting and slicing of the usofa cake.
Dont looz sight of that fakt.
mac.

Soflasnapper
07-07-2011, 06:56 PM
True dat.

llotter
07-08-2011, 08:36 AM
We don't need no stinking government pension programs...so making such modifications is barking up the wrong tree.

LWW
07-08-2011, 08:49 AM
If you want everyone to pay "THEIR FAIR SHARE" how can you logically demand that they receive less than their fair share?

Soflasnapper
07-08-2011, 09:48 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: llotter</div><div class="ubbcode-body">We don't need no stinking government pension programs...so making such modifications is barking up the wrong tree. </div></div>

I doubt it is more feasible to cancel all of them, rather than to achieve savings in this or another way. Even the fire-breathing kill the unions governors out there haven't suggested flat out cancelling the pensions.

People often throw out the good because it isn't best or perfect, and end up with nothing when they could have had something.

Soflasnapper
07-08-2011, 09:56 AM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: LWW</div><div class="ubbcode-body">If you want everyone to pay "THEIR FAIR SHARE" how can you logically demand that they receive less than their fair share? </div></div>

One way would be the Ryan plan way-- do not apply this to anyone receiving a pension currently, or who is over 55 and has relied on the status quo ante arrangements for retirement planning. Put it into effect for 54 year olds, say, and as this would be the new definition of 'fair share,' they'd be getting it, fully.

Back in the day, SS was NOT COLA'd, and like the minimum wage which wasn't indexed either, those payments fell in purchasing power every year, until a catch-up increase was passed (and that catch-up usually did not top them up to where a CPI increase each year would have left them).

Given that the underlying WAGE for these positions does not keep pace with the CPI either, the current situation sometimes finds retirees getting more in their pension than current workers in that job receive in pay. There's nothing particularly fair about that share, particularly when they corruptly arrange very large final years' pay to artificially set a high beginning pension figure.

llotter
07-08-2011, 03:24 PM
I wasn't meaning to imply an immediate cancellation of government pensions. A 'reform' that I would support is one that leads to the certain elimination of such programs even if it takes 40+ years.

I would bet that the majority of people, especially below 40 or 50 if they were free to opt out, would, especially if they were repaid everything that they and their employer contributed. On top of that, if we means tested benefits, I think SS would be gone fairly fast. Liberty dictates that people take care of their own needs, not becoming wards of the state.

Soflasnapper
07-08-2011, 04:40 PM
<div class="ubbcode-block"><div class="ubbcode-header">Originally Posted By: llotter</div><div class="ubbcode-body">I wasn't meaning to imply an immediate cancellation of government pensions. A 'reform' that I would support is one that leads to the certain elimination of such programs even if it takes 40+ years.

I would bet that the majority of people, especially below 40 or 50 if they were free to opt out, would, especially if they were repaid everything that they and their employer contributed. On top of that, if we means tested benefits, I think SS would be gone fairly fast. Liberty dictates that people take care of their own needs, not becoming wards of the state. </div></div>

Before SS and Medicare, the elderly were the group with the most poverty. After those programs were implemented, they are the group least in poverty.

Fact is, people break down, and cannot work, at exactly the time they need the greatest health care. If government programs didn't fill the gap in that situation, it would all be on the next and next generation in their family to supply this need. Or the pro bono care a hospital might give, but that isn't free either.

Most people who have a voluntary retirement program through their employer take advantage of it, rather than receive all their money without deductions for that program. True, that's often because their contribution is matched, but these days, there may or may not be a match (of say, 401k contribution), and people STILL realize this kind of planning is in their self interest.

But in your view, is someone receiving a PRIVATE pension or retirement plan a ward of their company?

LWW
07-08-2011, 05:40 PM
The real problem with SS that nobody wants to address is that a very substantial percentage of recipients is receiving benefits under completely fraudulent conditions.

llotter
07-09-2011, 05:23 AM
I have only been referring to Social Security pensions as not compatible with fundamental liberty because of the forced participation and because of the Ponzi scheme design, not individual savings set aside for the non-working years.

I am also adamantly opposed to using the tax code to manipulate citizen behavior as in the 401k and IRA type programs, rewarding participants and punishing non-participants.

I don't know if you have ever noticed this truism about society but there will always be a lowest quintile and what business is it of government, in a free society, to move one group out and another group into the lowest rank, especially knowing that that process lowers the tide for everyone? In a better world, government would not even track such statistics.

The most obvious fallacy of Marxist Utopian ideology has been that the governors do not fade away but only become more dictatorial. The reason for this rise of power is that the governors are perpetually stuck trying to fix their last fix and things only get worse and worse. As Hayek points out, man is not capable of solving everyone else's problems and it is a 'Fatal Conceit' to proceed as though he is.

Freedom solves the problems in the most efficient way possible and it is the function of a government in a free country is to protect our freedom, not to use behavior modification on the people. If government would merely stick to this basic duty and stop imposing the latest and greatest scheme on everyone, we would all the the richer for it.