Sunday, February 27, 2011

The truth from where I sit

There's been plenty of chatter about the Wisconsin and Ohio labor issues before their respective legislatures.

Let me offer up some information from where I sit.

I have a number of recently retired Ohio teachers as clients. I looked at the average pensions of those teachers and it comes to roughly $45,000.

To be fair, these teachers get no social security (unless they had a spouse who kicked into social security). However, I also have a number of retired Ford and GM rank and file employees. Their pensions average roughly $20,000 plus social security benefits of about $22,000.

Not too much of a difference, right? Except that the UAW employees have probably the best pensions in the private sector. In addition, those employees kicked in to that social security for their entire lives; something not done by your average school teacher. Oh and it's because of those healthy pensions that the big three find themselves getting buried by foreign competition.

Here's another big time benefit of your average public sector worker.

They get 10 sick days a year, which they get to carry forward. Do you know anyone in the private sector who gets that kind of benefit? Think about how many sick days you've taken in your life and calculate how many carryover days you'd have in the bank today.

Now it would be one thing if those days were just paid out at the end of the year. But a teacher gets to wait on payment until their salary is 2-3 times the value from when those days are accrued. In addition, the pension benefits are calculated based on the last 3 years of salary. So many teachers stock pile those days until retirement. If you've been a teacher for twenty years you effectively doubled up that last year of wages, thereby ballooning your benefit.

No one in the private sector has that kind of freedom with their private pensions.

Now how about those fat cat pension? I have several retired executives and all of one has a pension amounting to $50,000 a year. But I also have a retired school superintendent who pockets a cool $74,000 a year pension while his wife gets her $33,000 from her teacher pension.

$107,000 a year? Now most couples could retire very comfortably on that.

The fact is, the average pensioner in my practice gets about $10,000 a year in pension benefits. Many of those pensions have no cost of living adjustments so these folks are hit very hard by inflation.

Now whether these folks want to admit it or not. They're breaking the backs of the people who have to work to fund these pensions.

That's the truth from where I sit.

Later, the joke of prevailing wage.

1 comment:

Anonymous said...

To see failure of socialism one need look no further than shared public pensions. Like other socialistic programs, the pensions do away with individual accountability. The public pension is a like a financial commune. Now that they have been mismanaged they are trying to blame their shortfalls on everybody else.