Support Wisconsin Workers

[electriklady]

Drivel.....

You wouldn't know your ass from a hole in the ground regarding unions.

Gov. Walker is scoring points with the ignorant and uninformed (you) with no basis in fact or reality.

http://blogs.forbes.com/rickungar/20...oyee-pensions/

I know how faithful you are about reading links, so I cut and pasted (just like my drivelling hero) the whole article-- ENJOY!

The Wisconsin Lie Exposed – Taxpayers Actually Contribute Nothing To Public Employee Pensions
Feb. 25 2011 - 11:56 am | 274,673 views | 14 recommendations | 643 comments
By RICK UNGAR
Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.

Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.

Via tax.com

How can this be possible?

Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.

Many of us are familiar with the concept of deferred compensation from reading about the latest multi-million dollar deal with some professional athlete. As a means of allowing their ball club to have enough money to operate, lowering their own tax obligations and for other benefits, ball players often defer payment of money they are to be paid to a later date. In the meantime, that money is invested for the ball player’s benefit and then paid over at the time and in the manner agreed to in the contract between the parties.

Does anyone believe that, in the case of the ball player, the deferred money belongs to the club owner rather than the ball player? Is the owner simply providing this money to the athlete as some sort of gift? Of course not. The money is salary to be paid to the ball player, deferred for receipt at a later date.

A review of the state’s collective bargaining agreements – many of which are available for review at the Wisconsin Office of State Employees web site - bears out that it is no different for state employees. The numbers are just lower.

Check out section 13 of the Wisconsin Association of State Prosecutors collective bargaining agreement – “For the duration of this Agreement, the Employer will contribute on behalf of the employee five percent (5%) of the employee’s earnings paid by the State. ”

Johnston goes on to point out that Governor Walker has gotten away with this false narrative because journalists have failed to look closely at how employee pension plans work and have simply accepted the Governor’s word for it. Because of this, those who wish the unions ill have been able to seize on that narrative to score points by running ads and spreading the word that state employees pay next to nothing for their pensions and that it is all a big taxpayer give-away.

If it is true that pension and benefit money is money that already belongs to state workers, you might ask why state employees would not just take the cash as direct compensation and do their own investing for their retirement through their own individual retirement plans.

Again, simple.

Mr. Johnston continues-

Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers. That is, it saves taxpayers money. The Wisconsin State Investment Board manages about $74.5 billion for an all-in cost of $224 million. That is a cost of about 30-cents per $100, which is good but not great. However it is far less than many defined contribution plans, where costs are often $1 or more per $100.”

If the Wisconsin governor and state legislature were to be honest, they would correctly frame this issue. They are not, in fact, asking state employees to make a larger contribution to their pension and benefits programs as that would not be possible- the employees are already paying 100% of the contributions.

What they are actually asking is that the employees take a pay cut.

That may or may not be an appropriate request depending on your point of view – but the argument that the taxpayers are providing state workers with some gift is as false as the argument that state workers are paid better than employees with comparable education and skills in private industry.

Maybe state workers need to take pay cut along with so many of their fellow Americans. But let’s, at the least, recognize this sacrifice for what it is rather than pretending they’ve been getting away with some sweet deal that now must be brought to an end.

UPDATE: Since this post was published earlier today, many commenters have made the point that, while it is true that it is state employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the taxpayer to make up the difference.

There is some truth in this – but not as much as many seem to think. Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life.

But is this the fault of the state employees? The pension agreements are the result of collective bargaining. That means that the state has every opportunity to properly calculate the anticipated lifespan and then add on some margin for error. What’s more, the losses taken by the pension funds over the past few years can hardly be blamed on the employees.

Take a look at what Sue Urahn, an expert on the subject at the Pew Center on the States, has to say about this when describing the $1 trillion gap that existed between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises.at the end of 2008-

To a significant degree, the $1 trillion reflects states’ own policy choices and lack of discipline:

•• failing to make annual payments for pension systems at the levels recommended by their own actuaries;
•• expanding benefits and offering cost-of-living increases without fully considering their long-term price tag or determining how to pay for them; and
•• providing retiree health care without adequately funding it
Via Pew Center on the States

That is the point. While the governor of Wisconsin is busy trying to shift the blame to the workers in an effort to put an end to collective bargaining, the reality is that it was the state who punted on this – not the employees.

Further, by the state employee unions agreeing to the deal proposed by Walker on their benefits (as they have despite Walker’s refusal to accept it) they are taking on much - and possibly all – of the obligation out of their own pockets.

As a result, the taxpayers do not contribute to the public employee pension programs so much as serve as insurers. If their elected officials have been sloppy , the taxpayers must stand behind it. But if the market continues to perform as it has been performing this past year, don’t be surprised if the funding crisis begins to recede. If it does, what will you say then?

So Swamp, what is your reply here? Walker is just another "jackass" in the pack.......a union hating one at that......hey.....you two have something in common......do you like "tea" too?

[Highplains Drifter]

My "Reply"?

How bout this girl....

"There AIN'T NO MONEY!!!
Understand? There AIN'T NO money!!!!

And No. I don't like "Tea". I do strictly decaf, diet Coke. AND...the Cheap stuff...the Publix brand.

So it is okay to use tax payer's monies to fight a private Union? How much did Walker spend of the Tax Payer's Monies on this?

[wtdoor67]

This one cracks me up. Public sector's Union dues are subsidized by the govt. A public sector worker chooses to be a union member and takes money from his wages and pays his or her dues. This is subsidization? I guess if they buy beer or alcoholic beverages, then the govt. is subsidizing their drinking habit?

The pity of it is that people such as Swimpo believe this garbage. Some folks are eat up with the dumbass.

[wudwoker51]

Just got home from Madison where thousands of protesters from all over and from every union you have ever heard of and even some I hadn't (Iron Ship Builders of America was one) marched in a show of solidarity for the public sector workers of Wiscosin. The winds of union activism are blowing strong in the "Badger State" and it felt good to be part of it. Citizens are already talking recall of the Badger state's Governor (he's more like a weasel than a Badger) which cannot take place until he has served a year. Keep up the pressure on this Koch(whore) and expose him and his cronies for what they really are "UNION BUSTERS" and corporate pawns. See you again next Saturday. Long day, time for a beer and a shot of Crown.

[lewy]

If the government feels it is not smart enough to know how to negotiate with the union, then perhaps that is why they want to dictate how they will treat there employees. After all they gave the union everything they had by collectively negotiating. Even though the union is willing to help out, there real agenda is to bust the union, so they can dictate there work conditions, wages & benefits. If it was just about the money they would not have lowered the taxes of the rich & they would accept the unions compromise.

[MI-Lineman]

If the government feels it is not smart enough to know how to negotiate with the union, then perhaps that is why they want to dictate how they will treat there employees. After all they gave the union everything they had by collectively negotiating. Even though the union is willing to help out, there real agenda is to bust the union, so they can dictate there work conditions, wages & benefits. If it was just about the money they would not have lowered the taxes of the rich & they would accept the unions compromise.

Nice post! Well said!

[electriklady]

Went to the annual St. Patty's day parade yesterday in Binghamton NY.....always a big crowd(not as big as Scranton's that will be next weekend) but Binghamton always puts on a great parade......

Every year the IBEW local in the Binghamton area marches in the parade.....usually a small group but this year was different.....there were many different unions represented in the parade....carpenters, ironworkers, food service, IBEW, communication workers, etc etc.....and what alerted me to this was the loud and constant cheers as they came marching down the street(I was busy trying to keep my eye on my grandson grabbing candy).....I could not see what was coming through the crowd, but could hear the cheers, people sitting began standing up and clapping........I stood on the street beside my grandson as they passed in front of us, he looked up at me and said, "Look Gam, It's your friends, the IBEW" when he saw their shirts and banners. It was a great show of solidarity.

[jozmo]

Drivel.....

You wouldn't know your ass from a hole in the ground regarding unions.

Gov. Walker is scoring points with the ignorant and uninformed (you) with no basis in fact or reality.

http://blogs.forbes.com/rickungar/20...oyee-pensions/

I know how faithful you are about reading links, so I cut and pasted (just like my drivelling hero) the whole article-- ENJOY!

The Wisconsin Lie Exposed – Taxpayers Actually Contribute Nothing To Public Employee Pensions
Feb. 25 2011 - 11:56 am | 274,673 views | 14 recommendations | 643 comments
By RICK UNGAR
Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.

Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.

Via tax.com

How can this be possible?

Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.

Many of us are familiar with the concept of deferred compensation from reading about the latest multi-million dollar deal with some professional athlete. As a means of allowing their ball club to have enough money to operate, lowering their own tax obligations and for other benefits, ball players often defer payment of money they are to be paid to a later date. In the meantime, that money is invested for the ball player’s benefit and then paid over at the time and in the manner agreed to in the contract between the parties.

Does anyone believe that, in the case of the ball player, the deferred money belongs to the club owner rather than the ball player? Is the owner simply providing this money to the athlete as some sort of gift? Of course not. The money is salary to be paid to the ball player, deferred for receipt at a later date.

A review of the state’s collective bargaining agreements – many of which are available for review at the Wisconsin Office of State Employees web site - bears out that it is no different for state employees. The numbers are just lower.

Check out section 13 of the Wisconsin Association of State Prosecutors collective bargaining agreement – “For the duration of this Agreement, the Employer will contribute on behalf of the employee five percent (5%) of the employee’s earnings paid by the State. ”

Johnston goes on to point out that Governor Walker has gotten away with this false narrative because journalists have failed to look closely at how employee pension plans work and have simply accepted the Governor’s word for it. Because of this, those who wish the unions ill have been able to seize on that narrative to score points by running ads and spreading the word that state employees pay next to nothing for their pensions and that it is all a big taxpayer give-away.

If it is true that pension and benefit money is money that already belongs to state workers, you might ask why state employees would not just take the cash as direct compensation and do their own investing for their retirement through their own individual retirement plans.

Again, simple.

Mr. Johnston continues-

Expecting individuals to be experts at investing their retirement money in defined contribution plans — instead of pooling the money so professional investors can manage the money as is done in defined benefit plans — is not sound economics. The concept, at its most basic, is buying wholesale instead of retail. Wholesale is cheaper for the buyers. That is, it saves taxpayers money. The Wisconsin State Investment Board manages about $74.5 billion for an all-in cost of $224 million. That is a cost of about 30-cents per $100, which is good but not great. However it is far less than many defined contribution plans, where costs are often $1 or more per $100.”

If the Wisconsin governor and state legislature were to be honest, they would correctly frame this issue. They are not, in fact, asking state employees to make a larger contribution to their pension and benefits programs as that would not be possible- the employees are already paying 100% of the contributions.

What they are actually asking is that the employees take a pay cut.

That may or may not be an appropriate request depending on your point of view – but the argument that the taxpayers are providing state workers with some gift is as false as the argument that state workers are paid better than employees with comparable education and skills in private industry.

Maybe state workers need to take pay cut along with so many of their fellow Americans. But let’s, at the least, recognize this sacrifice for what it is rather than pretending they’ve been getting away with some sweet deal that now must be brought to an end.

UPDATE: Since this post was published earlier today, many commenters have made the point that, while it is true that it is state employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the taxpayer to make up the difference.

There is some truth in this – but not as much as many seem to think. Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life.

But is this the fault of the state employees? The pension agreements are the result of collective bargaining. That means that the state has every opportunity to properly calculate the anticipated lifespan and then add on some margin for error. What’s more, the losses taken by the pension funds over the past few years can hardly be blamed on the employees.

Take a look at what Sue Urahn, an expert on the subject at the Pew Center on the States, has to say about this when describing the $1 trillion gap that existed between the $2.35 trillion states had set aside to pay for employees’ retirement benefits and the $3.35 trillion price tag of those promises.at the end of 2008-

To a significant degree, the $1 trillion reflects states’ own policy choices and lack of discipline:

•• failing to make annual payments for pension systems at the levels recommended by their own actuaries;
•• expanding benefits and offering cost-of-living increases without fully considering their long-term price tag or determining how to pay for them; and
•• providing retiree health care without adequately funding it
Via Pew Center on the States

That is the point. While the governor of Wisconsin is busy trying to shift the blame to the workers in an effort to put an end to collective bargaining, the reality is that it was the state who punted on this – not the employees.

Further, by the state employee unions agreeing to the deal proposed by Walker on their benefits (as they have despite Walker’s refusal to accept it) they are taking on much - and possibly all – of the obligation out of their own pockets.

As a result, the taxpayers do not contribute to the public employee pension programs so much as serve as insurers. If their elected officials have been sloppy , the taxpayers must stand behind it. But if the market continues to perform as it has been performing this past year, don’t be surprised if the funding crisis begins to recede. If it does, what will you say then?

Thanks Boomer,well put. The deficit Scottyboy talks about was mainly because of HIS actions. A billion in tax cuts for big business, refused two and half billion for high speed rail, that could been jobs for many.

[tolex42]

I sense that some politicians are finding glee in destroying the standard of living of middle income Americans, especially members of unions. It seems their allegiance is more to corporations than to their constituents. The fight with unions in Wisconsin is far from over. The definition of union is people, in this case union people, joining together in support of each other, to protect their job and standard of life. Gov. Walker chose to protect corporations over tens of thousands of state employees.

It's not over, he hasn't seen anything yet.

[electriklady]

Tolex.......You are right.......none of these arrogant politicians have seen "nothing" yet!