These Are Just A Few Of The Recent Headlines And Quotes In The News Concerning The Pension Crisis Across The United States:
These are just a couple of of the recent headlines and quotes within the news concerning the pension crisis across the United States:
From the Star Tribune in Minnesota:
“Public pay, rewards set off new ‘civil war’”
The Associated Press reports:
“Gov. Scott Walker says the Wisconsin National Guard is prepared to respond wherever is essential in the wake of his announcement that he desires to take away practically all collective bargaining rights from state employees.
Walker said Friday that he hasn’t referred to as the Guard into action, but he has briefed them as well as other state agencies in preparation of any problems that could result in a disruption of state services, like staffing at prisons.”
From NorthJersey.com:
New Jersey Governor Chris Christie “The unions want to get realistic about giving concessions as a way to save jobs and protect the public safety”
Just by reading those couple of lines the assumption could be made that the country is on the verge of anarchy. The anarchists, you would be led to believe aren’t some covert organization with nefarious thoughts of laptop or computer mayhem or groups of unruly protesters in town squares all through the country. The anarchists are those that are sworn to serve and protect the public from such groups. The politicians on all levels of government would have you think that a “civil war” is brewing with your police officers and fire fighters on one side as well as the government on the other side. How utterly ridiculous a thought is this? And how much danger do these statements put our public servants in?
As evidence against these preposterous accusations all one want do is look around their community. Can you say that you have not seen your police officers on the streets performing their jobs? Have you not seen your fire fighters performing what they do? Needless to say you’ve got. The reason for this is straightforward. Police officers and fire fighters take their oath really seriously and would in no way be party to such ridiculous actions as an uprising against any governmental body.
The reality of the situation, 1 that our politicians do not want their constituents to know about is that, yes, there’s a pension issue and they, the politicians, are the cause of it. Now, people might ask what proof is there of this? Why haven’t we heard a lot more from the police and fire departments? The answers are fairly simple. 1 part of the answer is that most if not all police and fire departments have strict rules against its members talking to the press about departmental problems. The second part is that there is no centralized group that can speak on behalf of the employees. Police officers are represented by distinct unions throughout the State of Illinois and they don’t communicate together. Fire fighters seem to have a much better manage on this component of the difficulty. But the results are simple to see, only 1 side of the problem gets out and its sole intention is to vilify public servants within the eyes of the citizens they’re sworn to serve and protect.
Adding to the confusion in Illinois is the fact that the state has five separate pensions they’re responsible for, each county has a pension method and then you’ve got the local police and fire fighters. We are going to concentrate on the local police and fire fighters for the remainder of this post. There could be some reference to the other systems for clarification but we will try to keep it as basic as achievable.
You can find about 600 local pensions that are regulated by the Illinois Downstate Pension Program. This accounts for all police and fire departments from towns of five,000 residents or more and those under five,000 that voted to participate. Each local pension has its own board that is comprised of individuals which are elected by members and appointed by the town’s mayor. They are responsible for administering the fund, investments and deciding on disability requests. This is all regulated by state law. Police officers pay 9.4% of their base salary towards their pension fund each and every and every pay check (this doesn’t incorporate overtime or any other form of compensation). Fire fighters contribute 9.1% of their pay to their funds.The towns are supposed to contribute an quantity based on numbers that are provided by an actuary that determines what type of money the fund will likely make on its investments, how much they may well have to pay out and some other data which is too confusing to attempt and explain. This quantity is paid mostly from a tax levy the town places each year on our property taxes.
In an effort to protect the pensions of public servants the State of Illinois added the following to the State Constitution in 1970:
Article XIIISECTION five. PENSION AND RETIREMENT RIGHTSMembership in any pension or retirement system of the State, any unit of local government or school district, or any agency or instrumentality thereof, shall be an enforceable contractual relationship, the rewards of which shall not be diminished or impaired.
Considering that then the State of Illinois has not once paid its full yearly pension obligation and thanks to the Illinois Supreme Court there was no way for any fund to force the towns or the state to pay their obligations in full or on time. So, as the employees have paid their needed contributions on time every single time most towns have not paid their needed yearly obligation on time or in full. The funds that was supposed to be paid into the pension funds has been used to pad the town’s general funds so that property taxes might be kept lower under false pretenses to insure election wins. They’ve also been utilized to fund pet projects in towns and even utilised to fund unethical loans to relatives for bad company deals as within the case of Chicago’s pension money within the quantity of $65 million dollars becoming given to Mayor Daley’s nephew for a poor actual estate deal.
The pension funds have been called over generous in their advantages. This is entirely untrue. Yes, there have been circumstances of pay spiking as well as other forms of abuse but these have been perpetrated by politicians and their appointed cronies. Just examine Highland Park’s Park District and their recent troubles with administrators retiring on salaries of over $400,000 a year. The average rank and file public servant on pension brings residence an average of $40,000 per year. This is all public details, all one ought to do is file a Freedom of Information request with their town’s pension board.
A story by Medill Reports of Northwestern University had the following to say about the State of Illinois:
Illinois currently has $63.four billion in unfunded pension liabilities, based on a Reuters report. Professionals agree that it’s not the rate at which public pension liabilities are calculated that has led to the Illinois’ major shortfall, but the reality that the state has underfunded its pension plans in recent years and had to borrow money meet its actuarial requirements. The truth is, the state has plans to sell $3.7 billion of eight-year general obligation bonds this month to create contributions to its pension funds for the 2011 fiscal year.
Recent political moves against public servant pensions have not been confined to 1 political party either. Bills have been introduced by Democrats and Republicans alike, all of them suddenly attempting to get on the great side of private companies that supply massive donations for campaigns.
A great deal has been made out of the truth lately that public sector pensions far outweigh private sector, why do you think that it? Private businesses have moved away from defined benefit pensions and have gone to defined contribution advantages including 401K’s over the years to ensure that large money CEO’s can make a lot more funds for their multi-million dollar bonuses and maintain private sector unions at bay. The issue with defined contribution benefits was seen in 2008 with the crash of Wall Street. How many retired citizens had been showcased on news casts across the nation due to the fact they lost their cash in their retirement funds? Thousands? Possibly a lot more? If you are not a stock savvy investor you’ll be able to simply lose your nest egg really rapidly. This is why public sector unions desire to stay with the defined benefit pensions.
Now that it has come time to pay the piper the politicians wish to place all of the blame for the mess they have produced on the backs of police officers and fire fighters. They’ve been performing this with such fervor and rhetoric that they’ve created working conditions in an already unsafe environment even worse. Envision should you will the mindset of a person that due to the recent economy has lost their job, their property and has heard some of the mentioned rhetoric and now by some act of fate finds themselves in contact with a local police officer whom they decide is responsible for their issues.
Just how much much more of this unsafe rhetoric and misinformation from the individuals that we elect to serve all of us will we stand for? When will the real culprits of this pension crisis be made to answer questions about what they did with all of our tax income?
Pension or an ISA – The decision is yours
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