 JRW2R.I.P. Mom, Brian, Ziggy, Max and Zen.Premium
join:2004-12-20
La La Land
kudos:5
 ·Optimum Online
| reply to dave
Re: What if cities refused to pay the pensions? said by dave:You didn't quote the part where Massport said it was obliged to pay for huge amounts of overtime because they weren't allowed to hire.
That is the real story -- how a half-assed cost reduction measure that sounds good can actually end up costing more money.
Oh, and the Herald is a muck-raking rag.
Overtime is CHEAPER than hiring someone...
--
RIAA/MPAA... Bite me!!!!
In constant search for intelligent life on Earth! |
|
davePremium,MVM
join:2000-05-04
not in ohio
kudos:7 | Then thesimonsens  have nothing to complain about, do they? |
|
| reply to JRW2
said by JRW2:said by dave:You didn't quote the part where Massport said it was obliged to pay for huge amounts of overtime because they weren't allowed to hire.
That is the real story -- how a half-assed cost reduction measure that sounds good can actually end up costing more money.
Oh, and the Herald is a muck-raking rag.
Overtime is CHEAPER than hiring someone... only if the need for someone to work those extra hours is temporary
it takes 6 months* to put a new recruit through the academy... so the cost of a new recruit is hiring/selection/investigation** costs, plus 6 months (starting) salary for which you get no policework, plus the cost of the cover for the experienced officers time devoted to training {obviously one teaches in classes of many trainees to 1 or 2 instructors......} - and (unless they get fired for cause, wash out of the academy, die, or get invalided out) you'll get at least 21.5 years post academy service out of that new officer, since virtually all will want to work to pension age {and i guess if one considers huge numbers of new officers there's small knock-ons in the form of a few extra Sergeants.....}
but the overtime to cover the work the extra cop would do costs you time-and-a-half {but not any extra healthcare, uniform etc.} on a higher base salary {since all but a few cops are at the top of their scale}
if, like the NYPD, you're paying an experienced cop $90829 (for a 40 hr week) then 40 hrs a week of overtime from an experienced cop costs $136243  {and if the cops doing it are approaching pension age, knocks on into increased pension entitlement  } - that's more than the NYPD pays an experienced lieutenant.... {but significantly less than the 160k it pays an experienced captain - the lowest rank that doesn't get overtime }
a lot of the huge increase in NYPD overtime post 9/11 is effectively federally funded by Homeland Security
a hiring freeze is creating a need for increased overtime to just do the same number of hours because many experienced cops reach retirement age and go every month - and if you've no new hires to replace them in the headcount the work they did can only be covered by their ex-colleagues doing overtime at time and a half
*consider a job where the training time/cost is longer and overtime becomes a lot more attractive......
**iiuc the NYPD puts the total cost of recruiting/investigating/training(including salary) a new recruit at about $100k, and about 20% don't successfully complete the academy, so i guess each successful new recruit costs about $125k - cheaper than overtime as long as you get about 3 years from them, and a bargain if you get 21.5+ |
|
|
|
DannyZGentoo FanboyPremium
join:2003-01-29 | Aren't most police depts unionized? If so I'm sure they make double time for certain overtime situations and as such your numbers are probably on the conservative side.
--
Out the 10BaseT, through the modem, down the co-ax, over the fiber, across the backhaul, past the edge router, off the network...nothing but net |
|
 DSL987
join:2000-03-22
Helotes, TX | reply to heat84
n/m |
|
2 edits | reply to DannyZ
said by DannyZ:Aren't most police depts unionized? If so I'm sure they make double time for certain overtime situations and as such your numbers are probably on the conservative side.
all are afaik - given the far greater powers their employer has over them than normal employers it's pretty much a necessity in law enforcement.....
but they don't get to negotiate to double time etc. because they cannot legally refuse to work (unlike most employees)
my numbers are based upon the actual rates that NYPD get - all their overtime is at "time and a half" {the federal minimum, which states cities must meet or exceed}
other PDs may differ - particularly if in a State, or City, with tougher minimum overtime laws than the Federal ones* {eg in California double time is the minimum permissible under state law for anything over 12 hours in any single day, or over 8 hours if it is the seventh day of a week}
* which cover all PDs except those with under 5 officers....
»www.dol.gov/whd/regs/compliance/whdfs8.pdf
in the NYPD only Captains and above have duties that make them "exempt employees" not entitled to overtime - in some PDs the cut off rank may be lower - in some smaller PDs as low as Sergeant has met with court approval...
edit: there is an exemption allowing PDs (and FDs) to calculate overtime using longer periods as the basis - if they do so the cut off at which overtime becomes payable is as follows:
»www.policechiefmagazine.org/maga···ge10.jpg |
|
Mce SaintPremium
join:2007-10-03
Saint Louis, MO Reviews:
 ·AT&T U-Verse
| reply to heat84
quote:
I'm a little confused on the public employee pension situation. Why don't the cities just refuse to pay the pensions. Then they get sued for breach of contract or whatever and take a one time loss of money instead of losing money each year. At least I that's how I thought it worked. But apparently its not?
You misunderstand how pensions are funded and paid.
People receiving pensions today are mostly receiving the earnings on *investments* from monies that were placed into pension plan funds (which are a form of trust) years ago.
Each year, the pension calculates how much additional money has to be paid in to pension fund by the City NOT to pay current retirees, but to pay *future* retirees.
If a city fails to make the required annual payment to the pension fund - for example, it either pays $0 or less than the amount calculated by the pension fund administrators - pensions can STILL be paid out to *current retirees* because the pension fund still has investments (stocks and bonds) that it can liquidate (that is, sell) to generate enough cash to make the payments to the retirees.
However, if the city failed to make the annual required payments (or made less than required annual contribution), then - at some point - the pension fund will deplete its assets and be unable to make payments to retirees. In short, over time, the amount of money coming IN to the pension is insufficient to replace the money going OUT of the pension meaning that little by little the total investments of the pension plan get smaller and smaller because investments are being liquidated/soldto meet cash needs.
As the City has an obligation to make contributions to the pension fund *each year* the City could, in theory, be sued each year it fails to make a required contribution.
In short, it's not just "a one-time loss." It's a *continuing* loss. The only way for the city to get out of the situation is to stop promising pensions altogether.
Obviously, I've oversimplified some of this, but that's roughly the situation. |
|
JRW2R.I.P. Mom, Brian, Ziggy, Max and Zen.Premium
join:2004-12-20
La La Land
kudos:5 Reviews:
·Optimum Online
| You left out one other very important point, and a reason why many pension funds are so depleted of funds today.
In the past, many pension funds had a surplus of funds to meet present and future obligations, and that surplus was growing in many instances.
So in some cases the pension funds were "raided" of some of the excess funds and these monies were used as "operating capital".
Fast forward a few downswings in the "market" and most of these pension funds are now underfunded.
This is how many of the funds got into the situation they are in today.
--
RIAA/MPAA... Bite me!!!!
In constant search for intelligent life on Earth! |
|
 heat84Bit Torrent Apologist
join:2004-03-11
Fort Lauderdale, FL | reply to heat84
Is the rest of the country gonna do what Wisconsin just did? I hope the bill passes there. I'm for the concept of unions but today's unions have become the evil they were created to fight. So IMO they have to go, for now at least.
--
Bit Torrent is my DVR. |
|
DSL987
join:2000-03-22
Helotes, TX
1 edit | said by heat84:Is the rest of the country gonna do what Wisconsin just did? I hope the bill passes there. I'm for the concept of unions but today's unions have become the evil they were created to fight. So IMO they have to go, for now at least.
Here is a site that tracks problems relating to pensions
»www.pensiontsunami.com/ |
|
 J E F FWhatta Ya Think About Dat?Premium
join:2004-04-01
Kitchener, ON
·Rogers Hi-Speed
 ·Rogers Portable ..
 ·magicjack.com
| reply to heat84
I know for Ontario, Canada, city workers pay into a fund called OMERS which is separate from cities, likely many cities in the US have the same sort of plan. The cities DO pay into it as the employee works, but once retired, the city has virtually no liability.
Of course, maybe things are done different down there.
--
If you can't explain it simply, you don't understand it well enough. - Albert Einstein |
|
 dogmaXYZPremium
join:2002-08-15
Boulder City, NV
kudos:1 | reply to DSL987
This Sacramento Bee article from the website you linked is immutable:
»www.sacbee.com/2011/03/18/348448···ing.html
I was going to summarize and copy it here, but the entire article is worth reading what I think we all know: Social Security is not an entitlement. Never was, never will be. The reason the government isn't doing anything about it, and won't, is because there is no real legal or financial liability.
They owe the people that paid into it nothing, which this article cites a SCOTUS decision from almost 50 years ago stating as much. |
|
