and 100% of the 86% apparently don’t understand that pensions have no value unless you work for the plan sponsor for decades, not the 3 to 5 years as is normal.
While companies like Boeing and 3M are phasing out their pension plans, more and more employees see the pension as a way to restore the American Dream of retirement, according to the National Institute on Retirement Security.
By Lynn Cavanaugh| November 05, 2024 at 10:30 AM
Americans’ views on retirement are shifting. Many employees are increasingly worried about retirement and they see a return to pension as a way to restore the American Dream of retirement, according to the National Institute on Retirement Security’s (NIRS’) new survey, What Do Americans Think About Pensions for Public Employees?
NIRS finds strong support among Americans for retirement benefits provided to state and local government employees: 86% of Americans say all workers, not just those employed by state and local governments, should have a pension. This support holds strong across political party lines, with Democrats in agreement at 89%, Independents at 86%, and Republicans at 83%.
Americans also view pensions as an effective workforce tool for recruiting and retaining public service employees: 82% of Americans agree that pensions are a good way to recruit and retain qualified teachers, and 84% say that pensions are a good way to attract and keep qualified public safety employees.
Source: benefitspro
QUINNSCOMMENTARY 
How is it that the “servants of the people ” do so much better than the people themselves?
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It isn’t. Show me actual data.
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It isn’t. Show me actual data.
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You can say that again.
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Sorry, but, taxpayers who do not themselves have pensions pay for those public employees and union members who do.
YOU just ponied up another +/- $100 Billion to bail out the multiemployer plans because of systemic, chronic and deliberate underfunding that has been going on for 60+ years (see Studebaker).
President Carter recognized the problem, and that the funding and vesting changes that were part of the Employee Retirement Income Security Act of 1974 did not resolve, and President Carter signed into law the multiemployer pension plan amendments act of 1980 – forty four years ago!
The most recent changes, including the bailout, did nothing to fix the mistake, so, taxpayers will again get to bail out multiemployer plans at some future date.
In terms of demand for pensions, it is a lot like health care coverage – people want the best benefits YOUR money will buy.
Pensions, by definition, are part of the Total Rewards an employer provides – which means that to the extent the plan sponsor contributes towards the cost of a pension plan, or health care, or a match in the 401k, etc., the plan sponsor can’t spend that money on other rewards, including wages.
Both R and D economists agree on this.
Remember the Cadillac Tax? Why did the CBO project that it would raise revenue, not so much from the tax itself, but from employer health plan changes to lower spend to avoid the tax? It was because the economists predicted that the employers would, in turn, have to spend it on taxable rewards.
Yes, I want a pension benefit that YOU, SOMEONE ELSE, ANYONE ELSE pays for.
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Public sector worker still have a median tenure of less than seven years (and falling, apparently), and fewer than twenty percent are “full term” employees of twenty five years or more. Most “public sector” employees are actually private sector workers on one of a series of jobs in their career.
Short tenures are the reason for the average pension of $2,428/month. Forty year employees can approach one hundred percent of salary as a pension.
I agree with the 86%. Public pensions in general are self financing because they are offset by lower salaries. And they reduce the need for other social services for seniors.
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I can’t agree that public pensions are paid through lower salaries. It is easy for a public employee to say I can make X amount more but I am doing a public service so I stay here minding my desk. I exclude police, fire and a few others from that remark.
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In the aggregate public employee benefits and cash compensation are equal to or greater than the public sector.
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No, when it comes to union and gov’t pensions, the same rules do not apply because those plans are not required to meet the same funding standards as single employer plans.
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Pick your study.
Overpaid or underpaid? A state-by-state ranking of public-employee compensation
Biggs and Richwine 2014
See table 4, Distribution of total compensation by education level
HS or lower are “overpaid” by 19%
Professionals/PhD are underpaid by. 18%
Logically, and empirically verified, between those extremes is a sliding scale where many employees are “roughly equal” in total compensation, which includes salary, benefits, pensions, and healthcare.
As the title indicates, this comparison varies by state. About twenty states are calculated as “market level”. The usual suspects are considered overpaid (+20%): California, New York, Connecticut, Illinois, Pennsylvania, ..Rhode Island?
Discussion; why those states? Liberal population or highly urban populations?
Biggs study rates public compensation higher than other studies because he uses a lower discount rate (post 2000) to value the pensions.
According to more recent studies, Biggs shows the public sector advantage is decreasing. (Study data was 2008-2012)
FWIW
Biggs considers a lot of factors (including paid leave, which is nearly identical in both sectors.) I’ve read most of his study several times. I see no mention that he distinguishes between full career and shorter term employees, i.e., short career employees might be lower comped overall than forty year retirees.
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“No, when it comes to union and gov’t pensions, the same rules do not apply because those plans are not required to meet the same funding standards as single employer plans.”
The Biggs study does not use the state contributions as the value of pension compensation, it uses the actual value, calculated at current discount rates.
Biggs study rates public compensation higher than other studies because he uses a lower discount rate (post 2000) to value the pensions.
There a numerous studies, from, “California state workers make TWICE as much as public workers” (Hoover Institute) to “Even when factoring in more robust public-sector benefits packages, total compensation is approximately 14.5% lower for public-sector workers than for private-sector workers.”. (Economic Policy Institute.
Biggs (Enterprise Institute) is considered one of the most authoritative retirement experts.
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et tu, Richard?
See Quinnscommentary…
How uni(n)formed and lazy thinkers, thinkOctober 30, 2024
What makes people jump to conclusionsNovember 3, 2024
Give Biggs a chance. There is actual data there, and analysis by one of the leading retirement experts.
“Andrew G. Biggs is a senior fellow at the American Enterprise Institute (AEI), where he studies Social Security reform, state and local government pensions, and public sector pay and benefits.”
The most critical point, IMHO, is that it exemplifies the “Flaw of averages.” Comparing the average, or median, public and private compensation is a waste of time and logic.
Clearly, according to Biggs and many similar studies, LOWER LEVEL public employees are overpaid compared to similar private sector workers, in total compensation, mainly due to pensions and healthcare.
But wait! What if I told you the inverse, that private sector workers (lower level) are UNDERPAID, and the difference is compensated by higher (taxpayer) costs for welfare, Snap, and other social services?
Biggs data is clear, lower level public workers are overpaid (for semantics sake).
Higher level public workers are underpaid, by a greater amount than the overpayment at lower levels.
Between those extremes are a large cohort who are “roughly equal” in total compensation.
Read Biggs and say it ain’t so.
Or not.
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There is a need for some serious thought on how to bolster the Social Security system into something more than a poor man’s pension into a true retirement plan or how to add a retirement component for all workers that would equal a decent level of retirement income. Yes, it would cost but nobody seems to mind the cost of the public employees pensions today.
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