March 30, 2011

Some Pension Crisis Solutions

Marc Comtois

Local 2882 President Cathy Paquette:

The answer to the pension problem … is, if you hire more state workers ...You would get more people paying into the pension system, and you won’t have any unfunded liability.
Yeah, I get it. More workers now to pay for current retirees. Then we just keep hiring more, every year, to pay for the increased future liabilities. And so on. Makes perfect sense.

Cynthia Volante, social worker, Department of Human Services:

It’s time our elected leaders began to hold the people who wrecked our economy accountable and demand from them they clean up the mess they created and stop coming after the people who serve the state. We [are] already paying more for property taxes, fuel, food and our children’s education. Enough is enough.
Question: What if "the people who wrecked our economy" are "our elected leaders"?

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These fine specimens (the quoted geniuses) are why you continue to hear politically incorrect terms used in public discourse. The outrage they incite is almost impossible to bear.

Posted by: John at March 30, 2011 5:23 PM

It's a neverending cycle. State pays employee and taxes them on earnings to pay them next year.

Only the deficiency in their taxes and annual income is made up by taxing small business owners (us 'rich' people who have to pay utilities, health care, rent, insurance, vendors, worker's comp and then eek out a profit).

I'm outta this state. Bye ya'll, I made the determination last month to move to greener pastures.

Ya got one life to live - do you really want to spend it in Rhode Island?

Posted by: chuck at March 30, 2011 5:29 PM

I am embarrassed for Ms. Paquette, having committed such an elementary logical error in public for all to witness. But then, that's her job as a union executive, isn't it?

Ms Volante, on the other hand, could use a crash course in basic economics.

Posted by: Dan at March 30, 2011 5:48 PM

Assume a teacher starting at age 21 at $35K. Assume salary growth of 8% per yr for 10 yrs (the steps)and 3% thereafter. Retires at age 60, receiving 75% of the average of the last 3 yrs salary. 3% COLA. Lives to 80. Contributes 8.5% toward retirement each year.

The present value of the pension contributions less the present value of the pension withdrawals AT THE POINT OF HIRE and assuming a 6% return on investment (which is probably optimistic)is -$97,297.96. Each new hire adds about $100K to the unfunded liability. I know I left out the State contribution, but hiring more people, in the absence of more state funding makes the problem WORSE, not better. It is "cheaper" simply to pay the unfunded liability directly.

Posted by: drdave51 at March 30, 2011 6:03 PM

I got a good chuckle this morning from that one. She must be a graduate of the Peter Asen School Of Economics.
Progressives are, simply put, a group of seriously mentally ill people.

Posted by: Tommy Cranston at March 30, 2011 7:15 PM

"The answer to the pension problem … is, if you hire more state workers ...You would get more people paying into the pension system, and you won’t have any unfunded liability."


I need some heavy duty drugs ...

Posted by: Monique at March 30, 2011 8:07 PM

Talk about wagging the dog.

Posted by: Max Diesel at March 31, 2011 12:11 AM

Their 10% contribution does not even cover the FREE HEALTH CARE FOR LIFE they will receive. Never mind the over-the-top pensions promises.

Posted by: dave at March 31, 2011 7:39 AM

That is the voice of your typical union moron.
I'll never forget the twisted logic some union dope used for why a school system shouldn't privatize the school lunch workers: "Because they know when someone is having a bad day and they can give them a few extra french fries..."
What f'n morons!

Posted by: Mike Cappelli at March 31, 2011 10:07 AM

I don't know which business idea makes less sense, Paquette's or the First Citywide Change Bank:

Posted by: Patrick at March 31, 2011 12:08 PM

What if "the people who wrecked our economy" are "our elected leaders"?
And what if they're not?? What if they are the people who took the money and ran while our economy was going in the tank? What if they are the ones who cry about taxes while profiting from the misery visited upon the poor by rising oil prices caused by accountants' spreadsheet trickery? What if you're a shill for Shell and are too dumb to even know it? Or even worse, what if you know it and don't give a damn about profits that are gouged from people who can ill afford it? What if you cry about taxation and turn a blind eye toward artificially inflated oil prices.

What if it's really nuts to think that the dollar removed from the pocket by taxes somehow hurts the poor, and the dollar removed from the pocket by billionaire oil barons is somehow beneficial to the poor who have to pay it.

What if we get G.E. to start paying some taxes? That might help the economy a bit.

Posted by: OldTimeLefty at March 31, 2011 10:34 PM
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