Pensions

A Tale of Two Pensions

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Public vs Private pensions
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        1. The week our robot issue goes to press, the bots start communicating on our blog. Coincidence?

  2. Shouldn’t the match from the 401k be better than 50%?

    Many companies, due to safe-harbour laws, match 1:1 for the first 3%, then 2:1 for the next to, for a total of 4:5. Not all, but many.

    So, for Mr. Private, in year 1, if he put in 5% of his sallary, $2,320, he would be matched $1,856.

    Even if he only contributed 1.8%, as your graphic suggests, he would receive a 100% match.

    Now, I am not surprised if this makes no difference at all, but it is worth mentioning.

    1. The infographic lists Mr. Private’s Social Security contribution as 6.2%. But the employer also contributes 6.2%, which should be listed as part of the gross salary.

      1. I don’t understand, that money just magically appears in the government coffers, otherwise it would be listed on their W2.

        1. Well, shucks, magic is what governments do best!

          But a muggle like me, with a muggle employer, would sure like it if my boss could put that 6.2% in my muggle pocket instead of the magic government hand.

          1. Everybody knows that muggles like you wouldn’t save for retirement if they got to keep their FICA contributions. Muggles would squander it all, and then they’d eventually get old and have nothing. Sure, the government squanders money with reckless abandon, so the muggles’ FICA contributions are squandered anyway. Still, the government deserves to get that money as fee for the magic services performed by its wizards.

            So, you whippersnappers, pay your FICA contributions and quit your whining. Have faith that the government magic will keep working.(*) Social security is a compact between generations: the wizards have arranged it so that the geezers exploit their grandchildren in perpetuity. You’ll get your turn eventually. But most importantly, greedy geezers like me want to keep the Social Security magic going, and the wizards must do increasingly difficult magic to accomplish this. Magic is hard work, so it should be plain to see that government wizards deserve ever greater contributions.

            (*) Government magic works precisely the opposite of the Christian model, “children should not have to save up for their parents, but parents for their children.”

            1. (*) Government magic works precisely the opposite of the Christian model, “children should not have to save up for their parents, but parents for their children.”

              That’s why we should have a $9,000 per child refundable tax credit paid for by all of the wreckers and kulaks in the 25% tax bracket!

              /Eddie van Halen aka Notorious GKC

              1. Wait, what? Didn’t I already admit I was wrong to miss Stein’s idea of increasing taxes?

                I would pay for the tax credits with budget cuts.

                1. That money was never yours to give away. You had to take it from someone else first. That you plan to magnanimously give a portion of the loot back does not negate the original taking.

      2. But the employer also contributes 6.2%, which should be listed as part of the gross salary.

        Why? That money is never paid to the employee, and can’t even be said to be paid on the employee’s behalf, since the employee acquires exactly zero property or rights as a result of the payment.

        1. “Why? That money is never paid to the employee”

          Because in realtiy it’s part of the employee’s salary and doing it this way allows the government to “hide” the total amount of taxes paid by the employee. The whole employer paid portion is just a slight of hand maneuver to keep the average employee’s ill informed of their actual tax rate.

          1. Because in realtiy it’s part of the employee’s salary

            Not it’s not. It’s a tax that the employer pays on their payroll, hence the name “payroll tax.”

            1. Does it really matter what you call it? All that really matters is this: if an employer has to pay it based upon each employee’s individual salary, it can rightly be lumped into total compensation. Whether we call it part of an employee’s salary or a tax, it’s the cost of having you on the payroll.

    2. Shouldn’t the match from the 401k be better than 50%?

      I worked for two companies that mached 0% on 401k contributions.

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    4. No. You’re an idiot.

      I don’t know ANY private companies that match 401k contributions at all. There may be a handful of financial/insurance companies that do, but they are de facto public institutions at this point anyway as most of them would be defunct without government/Fed handouts.

  3. I think it’s important to remember that one of the reasons we get such a high level of service from our government officials is because those sky high retirement benefits attract a much higher caliber of public servant.

    Sorry, that’s about as funny as I get this early on a Saturday morning.

    1. Not very funny; try harder, dammit!!! 🙂

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  4. Why didn’t I hear about this in 2013? Are the Australian tourist authorities trying to cover it up?

    “Pig in Australia Steals 18 Beers from Campers, Gets Drunk, Fights Cow”

    http://gadling.com/2013/09/10/…..eals-beer/

    1. “…shoots dog in a crib holding a pellet gun during a 3 a.m. no-knock SWAT raid”.

    2. BOOYAH

    1. I like the ekpyrotic model myself.

    2. None of them are smart enough to understand Time Cube.

    3. I don’t know what to think about that. I’ll wait for the consensus.

      1. +1 IPBB

    4. Another article on the same.

      So now we either deal with a singularity or something with no beginning and no end. Doesn’t appear to be an improvement.

      And correct me if I’m wrong, all the matter in the verse is still expanding?

      I love real science as well. The most agreed upon theory can be turned on its ear…overnight.

      The science is settled…INDEED!

      1. You forgot to drop the microphone.

      2. I’ve been telling you guys that BBT was bullshit for as long as I’ve been here. It is transparently rationalistic (not derived empirically), but even then, BBT didn’t make sense within its own phony context.

        You can’t get something from nothing–and no, it is not inconceivable that the universe has always existed, since there could be no such thing as existence without a universe which existed. There can be no beginning or end to existence as-such; only living entities face that alternative, and inanimate matter merely changes forms. But this is very hard for most to grasp, so they invent god or a singularity to try to take a shortcut around it.

  5. Selfless devotion to public service

    The essence of the scandal is that Ms. Hayes, in her unofficial capacity as first lady, used her position as an advisor and confidante to the governor ? she had an office at the State Capital in Salem ? for financial gain. The state ethics commission had begun an inquiry, and state Attorney General Ellen Rosenblum, a fellow-Democrat who had called the allegations against Kitzhaber “very serious ? and troubling,” launched a criminal investigation.

    “I understand that I have become a liability to the very institutions and policies to which I have dedicated my career and, indeed, my entire adult life,” Gov. Kitzhaber wrote in a statement released Friday afternoon. “As a former presiding officer I fully understand the reasons for which I have been asked to resign.”

    That poor, poor man. How will he cope with being a private citizen? Who will drive him around? Who will keep the smelly peasants at bay, at gunpoint if necessary?

    1. He’ll be ok , nobody shoots at lobbyists

    2. Julia Pierson?

    3. First sign of trouble should have been this:

      Ms. Hayes, in her unofficial capacity as first lady, used her position as an advisor and confidante to the governor ? she had an office at the State Capital in Salem

      Why? What government function was she fulfilling that she needed a government office? What was her title and job duties?

      1. First Booty Call

      2. What was her title and job duties?

        Besties with the first lady of NYC?

    4. I for one am disappointed Kitz gave up so easily. It’s been great having his scandal tie up the state Democrats agenda. They just gained an effective supermajority in the last election and were hot to implement California del Norte in this legislative session, which is why they threw him under the bus. Full speed ahead now with the same energy policy Kitz and Hayes were pushing without their names on it.

      Already the sycophant newspaper is making a deal of the nation’s soon to be first bi govenernor.

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  7. It gets better:

    While Kitzhaber accepted what had become inevitable, and he apologized to supporters in his statement, he leaves with some bitterness.

    “I must also say that it is deeply troubling to me to realize that we have come to a place in the history of this great state of ours where a person can be charged, tried, convicted and sentenced by the media with no due process and no independent verification of the allegations involved,” he said. “But even more troubling ? and on a very personal level as someone who has given 35 years of public service to Oregon ? is that so many of my former allies in common cause have been willing to simply accept this judgment at its face value.”

    “It is something that is hard for me to comprehend ? something we might expect in Washington, D.C. but surely not in Oregon,” Kitzhaber continued. “I do not know what it means for our shared future but I do know that it is seriously undermining civic engagement in this state and the quality of the public discourse that once made Oregon stand out from the pack.”

    DON’T YOU KNOW WHO I AM?

    1. Just a bit of a narcissist, isn’t he?

      1. Yes. And an incompetent POS for years. But he has the right letter after his name in a blue state.

    2. All he ever had was the best of intentions. Does no one care about noblesse oblig??

    3. “and on a very personal level as someone who has given 35 years of public service to Oregon ?”

      OK, pal, hand over every bit of dough you’re ever been paid and I’ll give you another two minutes to justify your sorry existence.

      1. as someone who has given 35 years of public service to Oregon ?”

        He complains about being denied due process, yet confesses to being a heinous criminal.

    4. So the implication is that his bimbo was awarded a government position because of who she was fucking as opposed to government selecting the person/organization most qualified for the job?

      SHOCKED, I am! How on earth could this sort of thing happen in government?

    5. You have to stop, I will fill up on salty tears and not have enough room for Valentine’s dinner with my wife tonight.

      1. I almost forgot about Single Person Awareness Day.

        1. Yes, I suppose I forgot the trigger warning.

          1. Korean Masterbation Day

  8. Derp from Reddit:

    This question was asked in the “Explain it to me like I’m five” subreddit:

    I understand that corporations are considered a sort of sudo-individual in the USA law, but I find it strange that a multi-million dollar corporation is allowed to sue an individual. The corporation can just drag out the case indefinitely until the individual is no longer able to pay court fees. It feels like a mockery of the justice system to allow the plaintiff or defendant win based solely on the amount of money they have.

    This was one of the responses:

    A reform of the legal system is needed to ensure that both parties are have a fair chance. We can either make the current system more efficient, get rid of the judge and jury and just have a clerk check who has the most money and that person wins, or we move to a system where money cannot affect the outcome. We could for example have all lawyers be appointed at random, and have all lawyers be paid by the government.

    1. that’s gold standard derp right there

      1. “that’s gold standard derp right there”

        I’d go with nuclear grade derp.

    2. let’s just have justice roulette, like in Thunderdome

    3. Yes, that would improve the situation dramatically.

      Also, we should randomly assign who has to be a lawyer.

      That way we get more minority participation–no more of this elitist law school business.

    4. Of course what would happen is that the system would become even more discriminatory, ala the IRS Targeting controversy. But the average prog voter would continue to parrot the line that it’s “random”.

    5. The corporation can just drag out the case indefinitely until the individual is no longer able to pay court fees.

      Yeah, the government never does anything of the sort.

      Aren’t you precious?

      1. when dealing with the government you’re lucky if you can get to court

        1. My best friend was recently fucked in his ass by the government. They blatantly reneged on a contract. They said FYTW, try and sue us.

          His lawyer said he’d win, hands down…in 3-5 years. Of course, his loan payment was due at the end of the month. They are absolutely despicable.

      1. Good.

        But better…

        Loser’s lawyer pays.

        1. The Romans had a legal concept called calumnia, which was basically a ‘false prosecution’. Basically, if someone was acquitted of a crime, they could sue the prosecutor for false statements. The punishment was the same as what the punishment was for the crime the defendant was accused of. Interesting system, has potential.

          1. Sounds like a Texas DA’s worst nightmare…

      2. “loser pays”

        Yes, while not perfect, this would fix a lot of the most obvious wrongs in our current system.

        But Proggies are generally speaking, “losers”, so they would/will fight that tooth and nail.

    6. What’s a ‘sudo-individual’?

      1. Somebody with transient admin privileges

    7. Single-payer law. Because no lawyer does anything worth more than minimum wage.

  9. Robert Reich weeps for America.

    For years, some of the nation’s most talented young people have flocked to Harvard Business School and other elite graduate schools of business in order to take up positions at the top rungs of American corporations, or on Wall Street, or management consulting.

    Their educations represent a substantial social investment; and their intellectual and creative capacities, a precious national and global resource.

    But given that so few in our society ? or even in other advanced nations ? have shared in the benefits of what our largest corporations and Wall Street entities have achieved, it must be asked whether the social return on such an investment has been worth it, and whether these graduates are making the most of their capacities in terms of their potential for improving human well-being.

    “Social Investment”?

    Collectivist collectivises.

    1. WTF is he getting at? We all have a stake in some asshole MBA’s career?

      1. I think what he’s getting at is that MBAs should be drafted and enslaved for the Greater Good.

        Hard to see where else his logic could lead.

        1. That’s what I was saying about the lawyers!

          Randomly selected.

          Marked at birth.

        2. if by greater good he means breaking rocks with a claw hammer, instead of implementing TQM or six sigma, then I agree

        3. You do realize that “Enders Game” is a progressive utopia, right?

    2. Not to mention that their capabilities are not a personal resource, but a national and global resource.

      1. Soylent Crimson

    3. But given that so few in our society ? or even in other advanced nations ? have shared in the benefits of what our largest corporations and Wall Street entities have achieved,

      Um… false ludicrous premise?

      1. Hey, a pile of not my money. Let’s share it.

        1. Hey wolves, who votes to eat the sheep?

    4. Their educations represent a substantial social investment; and their intellectual and creative capacities, a precious national and global resource.

      I just threw up in my mouth.

  10. Mr Private should really be putting away more like 8% to 10% – but that of course would leave him with even less per week than Mr Public.

    1. Well, the pension I was offered involved a 7% contribution. It also involved 10 years of such before vestment.

      1. Yes, but all of your contribution was still yours even if you didn’t hit the 10 year mark. So, it’s probably still a great deal.

        1. No, it’s a terrible deal because I’d have to forego the optional plan, which was to have 7.25% contributed by the employer into 403(b). So I’d lose out on 7.25% and then have to pay 7%. If I left before 10 years I’d get my money back plus whatever crappy saving rate (< 1%)interest had accrued instead of the 403(b) having compounded at roughly 10% or so.

  11. Way back when my grandparents were school teachers (all 4 at one time or another were teachers), the deal was you put up with lousy pay in exchange for summers off and a decent pension. Then the teacher’s unions figured out how to play on parent’s fears of little Jimmy becoming a male stripper because, well, his teachers sucked. So if you pay teachers more, you’ll get better teachers (ignoring the fact that good teachers can do math but went into teaching anyway and that kids’ brains are generally wired to soak up whatever they’re taught no matter how terrible the teachers are). Much of the pay went to the teachers with the most time, not the “best” teachers. And they still get summers off and a great pension.

    Meanwhile we still seem to have lousy teachers. Huh.

    1. My dad has this wonderfully unPC theory that the decline in American education is due to the feminists.

      Basically, his stance is that before women were welcome all over the workforce, they only had a few jobs they could do. So the smartest and hardest working women would choose teacher or nurse over being a maid. Thus leading to really good teachers. But now, the woman who in the 50s would have been a chemistry teacher is now an actual scientist, which is great for her, but lousy for science education in America.

      It’s an interesting theory, but I don’t think it’s all that accurate. But it always generates a lively discussion spittle flecked rage when he brings it up.

      1. “It’s an interesting theory, but I don’t think it’s all that accurate.”

        That theory is pretty much widely agreed upon economic history. I don’t think I’ve read any major economist who disputed it.

    1. How about we cut 75% of the government/government jobs? That way, not only do we not need to pay their pensions, but we can take the savings from the $77,395 we are no longer spending to cover the pensions of the “required” 25%?

      The public sector…twice the money for 10% of the work.

      1. Oh, and 1% of the productivity.

      2. It could be worse.

        Poor work habits, absenteeism, and low productivity are not the real problem with “public servants”.

        The real problem is that most of what they do is counterproductive. Think how much worse things would be if they were highly productive.

  12. Do the numbers change once the sheep are sheared?

  13. Does Mr. Public not get social security also?

    1. Typically, no. PubSec employees generally don’t participate in SocSec (which is a government pension) on account of they get a much better government pension.

      1. Hmm. That never came up when I had to decide whether to take that pension (which I didn’t). I think in MD you do both. So it would have been 13.5% taken out of every check but the benefits would have been about 45% final salary plus SS. It sounded pretty sucky to me.

        Here’s the online calculator. If I put in $60k for the three years and 30 years after 1998 it only gives $25k a year.

        http://sra.state.md.us/Partici…..utory.aspx

        1. I think many conservative states actually benchmark their civil service pensions at 50% of final salary for 30 years of service.

          However, retiring on 50% of your final salary at 48 is pretty phenomenal in it’s own right. And generally, every year you work beyond 30 adds to your percentage as your salary climbs.

    2. No. I assume he doesn’t pay into it, either.

  14. You know, when the asset bubble bursts and I lose my pension while at the same time bailing out the banks.

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  17. Pay employees their full pay and let them choose to who and how much of their pay goes to their medical insurance, pension fund, and long-term care fund.

    Stop letting companies, unions, cities, states and the federal government mismanage and underfund promised benefits.

    Liberate the paychecks of hard-working Americans from the convoluted tax code and dictates of politicians on how to save for retirement.

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  23. This is a totally disingenuous chart. This may be accurate for California state teachers but it is not an accurate portrayal of a federal pension for employees hired after 1985. Their pension, to put it simply, is comprised of three somewhat equal parts: Social Security, what the employee contributes to their Thrift Savings Plan ( an IRA which the government matches up to 10% or 11%, and a guaranteed pension income. It is too bad that the chart is deceptive. I think a federal employee comparison what have given a much more honest portrayal of the difference.

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  25. Clearly, the lesson to be drawn from this graphic is that people who work in the private sector are getting royally screwed.

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