Article

2011-02-14 Economy

Why are Cities Broke? Retired San Jose Top Cop gets $1/2 Million in Cash last year

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Posted by GolfBravoUSMC 2011-02-14 10:45|| || Front Page|| [4 views ] Top

#1 News story

Posted by GolfBravoUSMC 2011-02-14 11:16|| 2011-02-14 11:16|| Front Page Top

#2 Each state needs to amend their constitutions to cap all retired pay for which they finance to the average income of the states' tax payers. It also becomes an incentive for the public employees to make the average tax payer's income grow if they want their pensions to grow.

Posted by Procopius2k 2011-02-14 13:48|| 2011-02-14 13:48|| Front Page Top

#3 I'm okay with a reasonable pension. If I were governor here's what I'd do:

1) end all defined benefit pension plans for public employees.

2) start a defined contribution pension plan (e.g., 403b) for public employees. That requires a state contribution (e.g., 5% of base salary, excluding overtime, vacation time, sick leave) and a contribution from the employee (say 2-3%, though they can contribute more if they want).

3) cash out the defined benefit plans for future retirees at present net value, and move the funds into an IRA or the 403b plan -- employee's choice. Continue benefits for current retirees (one is stuck there).

Do all that and the problem solves itself.

Oh, not enough money in the underfunded defined benefits plan? Pro-rate the present net value downward as needed, and give the employee a mutually agreed chit for the difference to be cashed in the future.

Posted by Steve White 2011-02-14 15:39|| 2011-02-14 15:39|| Front Page Top

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