Pensions Myths and Vampires: They Both Refuse To Die
Posted: January 20, 2011 http://www.championnews.net/article.php?sid=2696
Both are impervious to logic and facts: Perhaps garlic would work?
By Bill Zettler
An unending cascade of misinformation continues to come out of
Springfield, union headquarters and the media so let me say it loud and
clear:
We Taxpayers Have OVERPAID Into Pensions Not UNDERPAID.
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Béla Lugosi
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Let's keep it simple:
Is $19 billion greater than $13 billion?
If the answer is "Yes" then we taxpayers have paid $6 billion more
for teacher pensions from 2000-2010 than we were told we would have to
pay in 2000. That's 46% MORE than we should have had to pay.
The way I look at it the taxpayers are due a refund with interest.
It's as if during the Bears-Packers game we went 46 yards past the
goal-line for a touchdown and the referees' said, "Oops forgot to tell
you this is a 200 yard field."
If that happened Dick Butkus and Mike Ditka would dismember the
referee and start the game over. And that's exactly what we need to do
with the pension system in Illinois: dismember it and start over.
Similarly if your mortgage payment was $1,200/mo. and you paid the
bank $1,700/mo for 10 years you would think you had paid down your
balance. But then the bank called and said "You know what your payment
was really $2,000/mo and now you owe us back payments plus interest at
8.5% on the past due amount." This kind of illogic is impossible
anywhere except in Illinois pension politics.
NOTE: The other four state pension systems have similar or worse
numbers. I am using the Teachers Retirement System as an example because
it is the largest by far. See table at end of article for details.
Why were the "experts" wrong in their estimates?
By "experts" I mean all of those with something to gain: teachers,
union bosses, pension trustees, consultants, actuaries, lawyers, bond
salesman, investment advisors, various and sundry boot lickers and, of
course, politicians.
They were wrong because there was no price to pay for being wrong.
When they are wrong the taxpayers are expected to pay the price: ever
increasing taxes into perpetuity.
We talked about why and how it was pulled off in this article: Illinois Pensions and Intergenerational Theft.
We have an example of an $189,000/yr music teacher who pulls down a
$130,000 pension at age 55 after contributing less than a self-employed
music teacher would contribute to Social Security for a pension of
$21,000 at age 62 here: Teacher Contributes Less for His $130K Pension Than You Do for Your $21K Social Security.
Here's a story of a $75,000/yr kindergarten teacher with a pension of $155,000/yr.
Pension Insanity: $75,000 Salary Turns Into $155,000 Pension for One Kindergarten Teacher.
Or how about a $1 million dollar payout for two high school teachers to retire early?
$1 Million Payout to Two Teachers Proves Schools Should Pay for Pensions, Not the State.
And finally this one explains why pensions cost so much: Teacher's 41% Salary Increase Costs Taxpayers $1.3 Million in Extra Pension Payments.
Part-time employees with part time careers do not deserve big pensions.
If you haven't worked 44 years to age 66 you haven't worked a full
career which means less than ¼ of 1% of current state pension system
retirees have worked a full career.
Less than 1% has worked 40 years.
Less than 10% have worked 35 years.
See retirement statistics here.
So why do we have to give these part-time public employees pensions 3
to 10 times greater than Social Security years earlier than Social
Security recipients would receive their pension?
The pensions cannot be paid, will not be paid and should not be paid.
Increasing taxes by 66% on $40,0000/yr workers to pay $400,000/yr
pensions for non-workers will not stand. The inexorable march of
$100,000/yr pensions to 25,000 plus in 2020 will not stand. Paying
millionaires while cutting services to the poor, handicapped and elderly
will not stand.
Amend the constitution now. Withhold pension contributions and start the lawsuits now. Whatever it takes start it now.
Seventeen referendums state-wide since February have shown 83% of voters want this done now.
If the current crop of politicians doesn't understand this then they
will be replaced in 2012 by politicians that do. Change is coming. You
can be part of it or you can find another job.
So Mr. Politician which will it be: change the pension system or change your job description?
SOURCE: Teacher Retirement System Actuarial Reports - June 30, 2000 & June 30, 2010 Schedule VII.
