Teachers’ Unions Invented Pension-spiking

Flanders

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The pension-spiking Bob Unruh details was pioneered by a few teachers’ unions:

Just imagine, you’re already being paid a healthy $165,000 a year, but your retirement is looming and your pension will amount to only $110,000.

But you work under a public employee contract that allows you to count bonuses and other such income as salary, and you cash in $270,000 during your final year of work, bringing your pay to $435,000 for the year.

That, then, is used as the basis for your pension, which surges from $110,000, to $166,000, higher than your salary.

National epidemic: Public employees 'spiking' pensions
Taxpayers 'squeezed and abused in every imaginable way'
Published: 15 hours ago
BOB UNRUH

National epidemic: Public employees ?spiking? pensions
A substantial amount of money yielded by pension-spiking ends up electing and reelecting Democrats. That is a direct violation of the First Amendment’s prohibition against a state religion. SOCIALISM.

The beginning

Decades ago, when teachers in NY state were closing in on retirement they were given all of the overtime they could justify in their final year on the job. The cost of spiking was as bad or worse than the examples Unruh cites. In addition, many of those teachers retired in their early fifties; so they collected their pensions for many more years than the average American collects a pension.

Up until a few years ago politicians blamed Social Security for all of America’s financial woes. Not bailouts, not stimulus packages, not interest paid to service debt, not the welfare state. It was SS that had to be reformed. Well, the filthy bums were afraid to touch the Third Rail of Politics, so they reformed the healthcare system instead. Look what is happening with that one. Productive Americans are being screwed, blued, and tattooed by the parasite class.

Before all of the pension and salary ripoffs were known, I made this comparison to Social Security and parasite pensions. Note that my SS figures are still accurate, while the public trough parasite’s numbers are ten times higher than the numbers I used years ago. I am embarrassed because I was so far off.

Also note that I made no allowances for the many parasites who retire years before the age of 65.

A SS recipient who began work at age twenty and paid into the fund for the next 45 years may collect checks for 10 years before dying. For convenience, I’ll put the payment at $1,000 a month which is higher than the average payout. That comes to $12,000 a year, and $120,000 over ten years just to get back money that was worked for. Most people don’t live long enough to collect for 10 years. I think life expectancy is around 74 for men and slightly longer for women.

Now let’s say that an unnecessary parasite dives into the public trough at age twenty, and also retires at age 65; living for ten years before dying. I’ll put a parasite’s average salary at $40,000 a year paid from general tax revenues. Therefore, one unnecessary parasite feeding at the public trough requires more than three times the amount of tax revenues it takes to pay one SS recipient for one year. And the folks in Washington want to fix SS! The country would be better off if they fixed the public trough first.

Sticking with the numbers I selected randomly to keep it simple, the unnecessary parasite will be paid $1,880,000 from taxes levied on the private sector. I’ll take a guess and put the parasite’s pension at $25,000 a year since government employees have been allowed to opt out of paying SS. Ten times 25,000 comes to another $250,000. Add that to $1,880,000 and you get $2,130,000. Figure in the lifetime benefits the parasite enjoys and the total will be closer to three million dollars paid from general tax revenues without ever creating an ounce of wealth. That total holds true at the federal, state, and local levels. The lifetime spread between what the parasite collects and what the private sector SS recipient is paid after retiring is approximately 18 times higher for the leech. As I said “The country would be better off if they fixed the public trough first.”

Now, look at a cut in income. Let’s say that two people who were born in the same marry at age 20. They both work in the private sector at low-paying jobs for 45 years. At age 65 they retire in the same month. Their combined SS incomes amount to $24,000 a year. They have some savings and a modest home so they figure they will be okay if property taxes don’t eat them alive.

One month after retiring one spouse dies cutting the remaining spouse’s income in half. Can you imagine telling a couple who fed at the public trough for 45 years that their retirement income will be cut in half if one dies. They needn’t worry because survivor’s benefits take care of parasites to the very end. That’s not the same as a widow or widower who collects benefits from a deceased spouse’s SS. If the survivor also collects SS he or she can only collect the higher of the two pay-outs.

I’ll close with a little background.

FDR appropriated Social Security from Norman Thomas (1884 - 1968) along with snatching the Socialist party platform. Thomas ran for president on the Socialist ticket six times between 1928 and 1948. Thomas founded the National Civil Liberties Bureau during WW I which morphed into the ACLU in 1920.

Eugene V. Debs (1855 - 1926) ran on the Socialist party ticket five times; once when he was in prison. Norman Thomas became the Socialist party after Debs died.

Trivia: Uber-Liberal Even Thomas is Norman Thomas’ grandson.

Financial institutions like banks could not be trusted to handle the savings of millions upon millions of workers; so Social Security was formulated by Socialists. One of Social Security’s objectives was to tie SS pay-outs to general tax revenues so that boom and bust cycles would not devastate average Americans every time there was bust.

SS would have been the first time in history where tax revenues were used to protect taxpayers rather than further enrich the ruling class. Instead of letting that happen the SS Trust Fund was established to separate SS from general tax revenues. Instead of protection, the Social Security Trust Fund was eventually looted. Politicians in both parties saw nothing wrong in stealing the money. That is why they are all very careful to refer to Social Security as a promise to senior citizens without connecting that promise to general tax revenues; hence, SS has to be reformed in order to save it. That line of crap comes from the very people who looted the Trust Fund to begin with.

The next thing to examine is who was forced to pay into SS? Answer: Private sector employees.

Allowing civil servants to opt out of SS was a premeditated plan for abolishing SS at some future date without affecting government employees. That, in itself, shows the unfairness of the current system. Most civil servants have their pensions guarantied by general tax revenues in one way or another. Eliminate tax dollar funded pension plans then put every federal, state, and local government employee into the system with private sector employees and SS will be fixed overnight.

Individual retirement accounts placed with Wall Street brokers is often touted as a good deal for SS recipients. If investing in the stock market is such a sure thing then a substantial amount of the money collected in FICA taxes should be invested in stocks by professional money managers employed by the Social Security Administration —— rather than put individuals at the mercy of Wall Street sharpshooters who will churn millions of individual investor accounts into lucrative commissions.

A better approach to “reforming” SS is to convert SS from an insurance program to a pension plan without buying into Wall Street. If you want more than the basic monthly payout when you retire you contribute more while you’re working. Don’t pay into it and you don’t collect.

After SS is a pension plan the next step would be lending SS funds to banks at a nominal rate of interest. The sheer size of such a pension fund, managed properly, would earn vast amounts. That income, in turn, would lower FICA payroll deductions dramatically.

The major problem with Social Security as it is now setup is an unstable dollar. When Debs, Thomas, and early Socialists envisioned SS they could not possibly have seen that the Federal Reserve would shrink the purchasing power of the dollar as the welfare state grew in size. Indeed, the Federal Reserve was not created until 1913. Because the SS concept did not incorporate a defense against an unstable dollar they had to believe that a dollar would buy the same goods and services forever, or at least into the foreseeable future.

The best example of the devalued dollar is the price of apples. Street vendors sold one apple sold for five cents before WW I. One apple sold for 5 cents throughout the 1920s, and up until WW II ended the Great Depression. Today, one apple sells for as much as a $1.50 in supermarkets. The price of one large red delicious apple rarely drops below 75 cents regardless of huge farm subsidies.

The minimum wage, another Socialist gem, also contributes to an inconstant dollar. Had the purchasing power of the dollar remained constant the minimum wage, and Social Security, would be viable economic policies.

No economist would ever suggest returning to a stable dollar. I doubt if there is an economist anywhere with enough intellect to tackle a constant dollar in relation to the welfare state. As things now stand, the minimum wage is an escalating disaster, and Social Security is heading for oblivion thanks to the unstable dollar.

One final point: Labor is converted to money. Taxes are paid with money. The wealthy pay their taxes with the labors of the many. Today’s wealthiest Americans who supposedly pay most of the taxes are no better than the king’s titled tax collectors in the days of European monarchies. Unlike general tax revenues in every society throughout history SS was specifically earmarked for the people who paid into it. The Social Security Trust Fund had to be looted, corrupted, and finally bankrupted in order to preserve a historical status quo.

SS, Medicare, and education are the three most expensive programs. That might be the reason SS, and Medicare/Medicaid come under attack. The attackers have one problem. SS is funded by labor performed. It should never be combined in debates with any Socialist program where the recipients get something for nothing. SS is not a welfare program in any sense.

I further believe that SS should compliment the marketplace without funding it through involuntary participation. As I said previously, SS funds can be loaned to banks the same way the Federal Reserve now does, but never for anything else. Once the money is loaned to a bank it enters the marketplace. Any other use of SS funds would be a direct assault on free markets and capitalism.

A few years ago, I thought that a minimum payout with employees having the option of supplementing the minium payout would work after the current program was transformed into a pension plan. It didn’t take long for me to realize that that would not be completely voluntary, and it didn’t address the self-employed who would also have the option of contributing to their retirement pension plan. Ultimately, any form of coercion is more of the current system.

I’ve offered my take on a few particulars. There is a lot more about SS that can be said.
 

NLT

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I find hard to believe that AZ pays public school teachers 165K a year, maybe a princible, but not a teacher.
 
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Flanders

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I find hard to believe that AZ pays public school teachers 165K a year, maybe a princible, but not a teacher.
To NLT: Bob Unruh wasn’t talking about teachers. In any event he gets his facts straight.

Not counting an honest mistake, I’ve never seen any of the folks who write for WND get it wrong. I cannot say the same for the NY Times or the WAPO. The Left would jump all over WND if any contributor played fast and loose with the facts.
 

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Teachers’ Unions Invented Pension-spiking
Just imagine, you’re already being paid a healthy $165,000 a year, but your retirement is looming and your pension will amount to only $110,000
Just reading the OP.
 
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Flanders

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Teachers’ Unions Invented Pension-spiking
Just imagine, you’re already being paid a healthy $165,000 a year, but your retirement is looming and your pension will amount to only $110,000
Just reading the OP.
To NLT: I should have made the distinction between my comments and Unruh’s article clearer. I thought this was enough for those who did not read the full article:

But you work under a public employee contract . . .
 
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Flanders

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jwoodie

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Pension spiking is an inevitable result of defined benefit programs, which ignore actual monetary contributions to the retirement fund. COLAs only exacerbate this problem. Current public employees should be given a choice of retaining their defined benefit programs with no more COLAs or switching to a 401k program based on their actual contributions.
 
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Flanders

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Pension spiking is an inevitable result of defined benefit programs, which ignore actual monetary contributions to the retirement fund. COLAs only exacerbate this problem. Current public employees should be given a choice of retaining their defined benefit programs with no more COLAs or switching to a 401k program based on their actual contributions.
To jwoodie: The outlay for COLA is minimal compared to union-dictated contracts and pension-spiking. Parasites will never willing give up those two prominent seats at the public trough, and Democrats get too much support from public sector unions to legislate a change.
 

DGS49

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The principle that pension would be calculated based on the last three years earnings was instituted to ensure that it would not be inflated due to a single year anomaly or deflated by calculating it over many years in times of inflation.

The fundamental problem never changes: Public sector unions are an abomination and an aggravated assault on the taxpayers. "Management" negotiates at the behest of elected officials, who can ensure their re-election with the favor of the public employees. And the whole thing is done with OPM, the "other people" being YOU.

If you wanted to guarantee a distorted result, you could not produce a better scenario for it.

People coming out of college today want, more than ever, to work for Gub'mint. And who can blame them?
 
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Flanders

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The principle that pension would be calculated based on the last three years earnings was instituted to ensure that it would not be inflated due to a single year anomaly or deflated by calculating it over many years in times of inflation.

The fundamental problem never changes: Public sector unions are an abomination and an aggravated assault on the taxpayers. "Management" negotiates at the behest of elected officials, who can ensure their re-election with the favor of the public employees. And the whole thing is done with OPM, the "other people" being YOU.

If you wanted to guarantee a distorted result, you could not produce a better scenario for it.

People coming out of college today want, more than ever, to work for Gub'mint. And who can blame them?
To DGS49: Not to mention the unconstitutional aspect of the federal government being in education to begin with.
 

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