James:
A good read, and the author is right, we shouldn’t paint with a broad brush. However I think he had one glaring inaccuracy, and that inaccuracy is regarding the crucial fact is the crux of the problem people have with government pensions. he wrote:
“I contribute 3% of my salary to my government retirement. Not much you say, but in the civilian corporate world, most companies provide 100% of the employees’ retirement without employee contribution”
This is a blatant falsehood. Company provided pensions have been getting phased out aggressively. They may have been the norm in earlier decades, but they are almost unheard of now. Virtually every company is using a 401k or IRA program where the employee is generally providing most or all of the funding. Many companies do match some portion of employee contributions (typically, 3-6%)
To compound this, 401ks are defined contributions – if the stock market crashes, then so does my retirement. Taxpayers are on the line for public employee pensions, with guaranteed rates of return. Some unions and politicians made sweetheart deals when the stock market was returning 10-15%, promising that level of return into the future. But now that the market is returning 1%, taxpayers are going to be held for the remainder, or alternately governments will go bankrupt. – Jason C.
Letter Re: Long Term Public Employee Pension Obligations
