I worked for a painting contractor in Rhode Island when I was in high school. Want to guess how much of it was on the books?

"In fact, [Donald] Cardin, 46, who retired ..."

Stop there. Not even half way through the first sentence and we already have a major problem.

This is the first adjustment that needs to be made to the pension system.

Let's go back to the beginning. What is the point of a pension? It is so retirees have money to live after working a long career at their job. What do we consider retirement age? Why have people tied together the "20 years vesting" in the pension plan with "retirement age"? That 20 years in is perceived as "I can retire then!" when it is intended to be the time when that person is fully vested in the system. That's where the system has gotten messed up. They're not "retired" at age 46, they've simply changed careers. So why are we paying a pension to people in their 40s? If someone is out on a real medical disability, that's one thing. But for someone to simply put in 20 years on the police beat, in the classroom or wandering the halls of the State House and then decide to "retire"? That's ridiculous.

Want to save a boatload on the pensions? Don't pay a dime out until people have reached at least the Social Security retirement age. Then pay them what they earned.

Patrick is correct - don't pay them anything until they have reached the SS retirement age.
We are getting screwed by cops who "retire" from one town and take another cop job in another city. If they are able to work, why shouldn't the benefit of their institutional knowledge be kept by the city that paid them for 20 years. Not only do we have to pay their retirement, we pay double by having to pay someone to replace them.
Obviously the argument that they can only work 20 years due to the rigor of the job went out the window 40 years ago. So, why do we pay them after only 20 years??? It makes no sense at all.
Or, if you want to retire after 20 years and collect your pension then you cannot take another job, because in reality all you are doing is stealing it from someone else who needs it. Show me your tax returns every year to prove you are not working elsewhere if you want to collect a pension at 42 years old.
This is simple common sense stuff that needs to be implemented NOW!

He's collecting a pension at age 46.

so he worked for 20-something years and will most likely collect a pension for 40-something years ( or at least 30+)... Who's better than him?

I'd take that in a second.

Yes, one of the fundamental problems is the retirement age. No one should be able to collect a 'regular' public pension until age 57 or 59 or some such age. How can you expect to collect a pension for possibly twice as long as you actually worked? How can anyone think that's financially possible?

I worked for a National Insurance company that had ( and still has) a private pension, you had to work 35 yrs to get 60% of the average of your top 3 or 5 years ( I forget), but you couldn't collect any pension money until age 59.

And I would consider that a generous pension, 35 yrs for 60%.

Not 25yrs for 80%. And is overtime considered part of the 'highest three years' calculation?

If it is, then it's simply highway robbery, plain and simple.

As you get closer to retirement age, you have seniority and thus first access to overtime, so for your last three years (presumably your highest salaried year), you grab ALL the Overtime you can get and raise your yearly income by 50 or 100%.

It just can't continue, it's just impossible to afford this.

Really, we should stop this business of having government actuaries try to regiment anyone's working life.

Make all savings tax-free. When you've got enough to provide a stream of income, you retire, and pay the tax on whatever you withdraw, just like with a 401(k) or an IRA.

Consider a blue collar guy with a two year tech degree who starts work at age 20. He'll be 47 years older when he can collect his SS. He may or may not have a private pension. He may collect for 20 years (assuming a slow increase in life expectancy). Lets assume he works to age 65 so has 45 years in. His 'number' is the sum of years worked and age when he can collect. The number is 112. Compare to the firefighter whose number is 68 (assuming 25 years in). It gets worse if you adjust the number by subtracting out the actuarial projection of years collecting - 92 versus 25. This is unsustainable. The beneficiaries can squawk all they want, but if it can't continue, it won't. Firefighting is dangerous, but not radically more than some blue collar occupations - look up the 10 most dangerous occupations. If we look at white collar professions, the number changes little - maybe 110/90.

"We are getting screwed by cops who "retire" from one town and take another cop job in another city. If they are able to work, why shouldn't the benefit of their institutional knowledge be kept by the city that paid them for 20 years. Not only do we have to pay their retirement, we pay double by having to pay someone to replace them."

Take a look at some of the local postings for cops. Some towns are actually looking for retirees by asking for academy trained people. The academy is so long now, they don't want to pay the OT to cover the position while a candidate is off being trained with no guarantee of certification.

@stuckhereinri:
While 44 is too young to retire and needs to be changed, no one is getting 80 percent for 25 years of service and no, OT is not calculated at least in the state plan.

This from the Projo. I would have simply posted the link but it's not allowed. I'm not expecting agreement, sympathy or understanding here, but I wrote it, and considering I've been active on this blog for years figured I needed to say something.

Michael Morse: Why 20 years may be enough firefighting for me

01:00 AM EDT on Friday, June 10, 2011

By Michael Morse

Twenty years ago I thought I would do this job forever. I had a dream: work in Providence till I was 60 and they threw me out, and then move to somewhere where they have a volunteer fire department and put my experience to good use. The department offered a 50 percent pension after 20 years, we contribute 9 .5 percent of our pay toward the fund, and the city contributes the rest. “That’s nice,” I thought, never considering that I would actually leave after 20.

Time marches on, and 20 years passed in the blink of an eye. The person I was when I started is long gone; a different, more somber, at times cynical person has taken his place. People who walked in my shoes fought for the 20-year pension deal, knowing from experience that 20 years in firefighter time is a long, long time. They knew, as only one who lived the life will ever know, that for some, 20 years is enough. They knew that at 45 or 50, starting a new career is not that easy, or starting a business when everybody else had a 20-year head start is challenging, to say the least.

I remember sitting in at a critical incident debriefing a few hours after I held two dead infants in my arms. My latex gloves melted into their skin their bodies were so hot as I tried unsuccessfully to revive them with my new CPR skills. I bagged the one-year-old — Savannah was her name I found out later — while doing compressions on the other, John. It was rough, but it was what I had signed on for.

The guy who brought the babies from the fire to me was a 20-year veteran firefighter, a tough guy by all accounts. When it was his turn to speak he filled with tears, and couldn’t. He hung his head and valiantly tried to express his feelings, but couldn’t. He left the room. A few months later he was gone. Retired. He told me much later that it wasn’t necessarily that call that did it; it was all the calls leading up to and including that one that finished him. He simply could not do it again.

I should have learned a lesson that day, but mired in the arrogance of youth I hadn’t lived enough to sense my own frailty. I was invincible. I thought of him the other day, as I drove home from what I thought was an unremarkable tour. As I neared my street, I thought of the little girl who claimed to have injured her knee and refused to move from the gymnasium floor. Her mother looked on from a distance, annoyed as I tried to figure out what was wrong. No bleeding or deformity, swelling or anything really. She showed me her other knee as a comparison, and I noticed bruises, weeks old on both legs, and both arms, and a haunted look on her face. I let it go. We can’t save everybody, and she probably is just an active kid who bruises easily. Or not.

I turned onto my street, and had to stop the car. Where was the little girl now? Was she home, in her room, reading or watching TV, or was she being punished for being a crybaby, like the kid a few weeks ago whose mother called us because her son “fell” from his bed — fell and had severe head trauma and curling iron burns on his legs. It took 10 minutes for me to pull myself together before I could walk in my door and not bring 20 years worth of memories with me.

I haven’t been sleeping well. It’s been going on for months now. Every night that I’m home I’ll go into a fitful slumber around midnight, only to be fully awake at around 2 a.m. I toss and turn for hours, finally getting some relief from my spinning mind at sunrise, only to be back up an hour later. I grab an hour here and there as time permits but have no idea what a full night’s sleep feels like, unless it is drug-induced, but I try to avoid that.

What runs through my mind is probably similar to every other person my age — are the kids really okay, will the bills get paid, am I truly happy or is this just an illusion, is that spot on my back the cancer that will kill me or just a mole. Then I get the ghosts.

• The baby run over by the 18-wheeler as it turned the corner on North Main and Doyle, dead in the middle of the street, the baby carriage twisted and crushed 100 feet from the body.

• The guy buried alive at sunset on Dorothy, and his lifeless arm that was the first thing we dug up.

• The 20-year-old guy and his 20-year-old friend dead in the front seat of their Mustang at the Atwells Avenue off-ramp

•  The 55-year old guy who was new at motorcycle riding who tapped a rear view mirror, lost control on 195, flipped over the Jersey barrier and was crushed by a Toyota Camry full of kids. We found his foot later, still in his boot

• The 18-year-old tattoo artist found hanging in his basement by his roommate.

• My friend’s brother found hanging in his bedroom closet.

• A RISD student found hanging from the wrought iron fence at Prospect Park.

• The kid found hanging off the side of his house on New Year’s Eve.

•  The 55-year-old who told his wife he was going golfing, started his car, didn’t open the garage door and died next to his clubs.

• The 40-year-old who held up traffic while he considered jumping from the overpass, then did as the crowd that had formed cheered.

• The college kid who fell 80 feet to his death the week before Christmas.

• The baby who rolled himself into his blanket and suffocated, while his dad was napping on the couch.

•  My friend Kenny who had a heart attack at his third building fire of the day, and had to be defibrillated, and came back to life but not the job.

• The 17-year-old girl who bled to death in the front seat of a car that had struck a tree while eluding police as her friends picked her pockets of the crack vials they were selling.

• The baby born dead and put into a hefty bag.

• The woman dead in her kitchen with a bullet hole in her forehead and her three children sitting on a couch in the next room.

• The two babies that broke the veteran firefighter.

• The eight-year-old deaf girl who broke my heart when I learned she had been prostituting for her foster parents.

• The 20-year-old dancer dead in her car after taking all of her pills, and the vomit-covered note on her lap.

• The family dead behind the front door as the fire burned out of control behind them.

• Delivering a baby in the back of the rescue and having the mother yell get that thing away from me when I handed it to her.

There are dozens, hundreds more, all waiting for that delicate twilight between sleep and consciousness to come uninvited into my mind. More join the parade every day that I come to work. Just the other week a 23-year-old hit and killed while walking home from a nightclub, a 30-year-old guy shot in the head, back and legs who walked to the rescue and then collapsed.

I am not a machine. I am a simple person who signed on to do a job, and have done it well. If I choose to leave this year, I will do so with my head held high, and hope that the pension that didn’t matter to me 20 years ago, but has become my lifeline, is still there.

Michael Morse, 49, is a rescue lieutenant in the Providence Fire Department and the author of “Rescuing Providence.”

Michael, I read that in the projo when it was posted. I understand that, but it misses the point. You're right, 20 years of working on the rescue truck might be enough. But after 20 years are you incapacitated to the point where you can't work anymore?

The main point is that so many people see that 20 years as the "retirement point", when what it should be seen as is the "fully vested point". Why is 20 years "enough"? Why not 10? Why not 15? 19? Why 20? Is it because that's when your pension is full vested?

That's fine if you don't want to do the job anymore after 20 years and I understand the added desire to leave the job because the incentive of improved pension is gone. That's fine. But I don't see why people in their 40s or even 50s who are otherwise mostly healthy (ie, not retiring because of physical or mental disability) should be collecting a retirement pension. Why can't we collect Social Security after 20 years of work? (And I do know that some people are not a part of that system) The purpose of a pension is not a reward for 20 years of service. It's to help you get by in your retirement. This is the real problem with the pensions and what most people are actually referring to with the talk of "gold plated pensions". Very few single pensions are "gold plated", but the system by which people can collect two, three, four or even five pensions from the state is certainly a gold plated pension system.
The first change I would make to the system is that no pension money is paid out to people who are less than the Social Security retirement age. You can still retire at any age you want, but you won't collect until SS retirement age.

Why is that a problem?

I can sympathize with the idea that it's not pleasant or sometimes possible to 'start out' in an unrelated field at 40-something after working a job like firefighting, but I think the rest of these folks have it right with regards to fiscal realities.

How about this for the 'tougher' jobs:

You put in 20-25 years of 'on the ground' work to get fully-vested, then you're transferred off the main duty to tasks like equipment/facility upkeep, or dispatching, or fire/crime prevention (visiting/inspecting homes and schools, etc.), or even full-time union paperwork. That work might pay a little less hourly, but it would compare favorably to similar jobs in the private sector. Once you're actually at 'retirement age', you collect a pension based on your last few years of 'base pay in active service'.

I think it's a nice way for taxpayers to get more bang for their buck, AND to avoid just -dropping- firefighters and cops for two decades.

I never saw it as a retirement pension. I'll never retire. It's a pension, available after twenty years of contributions. If it wasn't there, I wouldn't take it, nor would I have spent the last twenty years on a rescue truck in Providence. I'm retiring from service after twenty years and moving on to something else. I didn't write the rules, I didn't demand the pension, it is what was offered as terms of employment.

Now, its unsustainable. Oh, well, that's way the cookie crumbles I suppose, I'll survive, but it's no way to run a state or country. The health care bills paid by the state from the people I bring to area hospitals in a week could pay my salary and then some. I'm looking down the road when we have all these hearings and articles and judges deciding that this system is unsustainable, and they start emptying the nursing homes. Make room for mom and dad, because they're coming home too.

> I'll survive, but it's no way to run a state or country

That's for sure. I wouldn't have a problem with your deal if it was actually fiscally feasible.

Somewhere along the line, a non-political entity involved with 'math' should have some veto-power over things.

Either that or I should have learned more math twenty years ago and figured for myself this thing was doomed.

Let's just face the simple facts - the system is broken and needs to be restructured radically, or else there will be many more retirees like those in CF being asked to take 50% cuts in their pensions. Those are numbers we can live with.
Like it or not, the way it is today, the numbers simply don't work. Period.
michael's little tear-jerk expose merely tells me he didn't do his homework when he took the job. What did you expect you'd see every day working a rescue in a major city, Disneyland? Now that he's had his little revelation I should somehow feel bad for him? Oh well. He's not the first, and he won't be the last.
But let's not kid each other, however things are restructured, we will find plenty of competent people willing to perform the jobs.

Mangeek, that would be great, unfortunately there are no positions like that if the Fire Department in Providence. One option was Fire Prevention but budget cuts eliminated that office, except for a few positions. There is no desk duty, except for administration, but budget cuts eliminated those as well. The PFD is on a steady, rudderless decline, people won't see it for a few years, but in the cyclical nature of things the cuts will become hard to miss and a once great department becomes mediocre at best. Then we will rebuild, but not until people see for themselves the need for good public services, and how you get what you pay for.

> One option was Fire Prevention but budget cuts eliminated that office, except for a few positions. There is no desk duty, except for administration, but budget cuts eliminated those as well.

Why did we need the cuts? To feed retiree benefits, mostly. It's a self-fulfilling prophecy. And all this while we pay more per-capita than Boston, 230% of the national average, for fire coverage.

Switching to what I'm talking about would get those programs back AND lower costs. All it takes is firefighters willing to work 20 'hard' years, followed by 20 'soft' years (most of us will work 40+ years, just like our parents did), and -then- collect their pensions.

Two things come to mind...

1. Rescue/firefighting/police work in a major US city is high stress and at time downright traumatic. And I'm sure it's much worse in an Urban/densely populated area than say, North Smithfield (where they do have full-time firefighters). And I would be fully behind an idea like having all retiring firefighters/police go through some sort of PTST therapy before allowing you to retire. I know quite a few firefighters and yes, it can be gruesome, so why not mandate some sort of therapy to assist you in transitioning from "the job".

2. Regardless of whether you are fully vested after 20yrs or not... if you pay into the system (and the city does as well), even considering the magic of compounding interest how can anyone expect to draw a gauranteed salary (aka pension) for 40+ years when you only contributed for 20?

That's one of the problems, the math doesn't work, even without COLA's.

I could do the math, but my guess is that the combined contribution to the 'fund' (yours and the city's) would literally have to be equal or greater than your yearly salary in able to pay out a pension for 40 years. OK, maybe not 100% of your yearly salary, but definitely more than 50%. Some needs to do the math.. perhaps if I ever find the time.

Well it’s finally happened. Central Falls retired police and firefighters are being “asked” (at least at this point) to have their pensions cut by one-half!! The Treasurer of the State of Rhode Island and the Mayors of its three largest cities are also stating that the pension problem cannot be straightened out without current retirees doing their part by giving substantial concessions.

I’m not talking about exorbitant pensions or fraudulent disability pensions, but rather fairly modest pensions that have been earned by employees via years of service and paid for by their own weekly contributions combined with the state or municipal mutually agreed upon contributions. The argument from the state and municipalities is simply that the unfunded liability in these systems is alarmingly high and the systems are in jeopardy of running out of money and therefore leaving everyone in those systems unpaid.

This catastrophic outcome is one which everyone involved (and we all are, at least as taxpayers) would hope to avert. The collapse of a single municipal pension system in this state would have dire financial consequences, not only for the recipients of this plan, but for all of the taxpayers of the state. Most of those citizens (and non-citizens) who pay no state income tax are recipients of some sort of federal, state or municipal social program(s), and as such would stand to lose at least some part of those handouts due to the increased strain on the system which would be necessitated by the loss of these pensions.

The reason these systems are in such financial disarray? The state and the municipalities have continually deferred their expected (and required) contributions so much that the systems are going broke. In other words, careless planning and budgeting by the politicians who control the purse-strings are the real reasons we’re now facing such a shortfall.

Most of the current employees in these retirement systems have already agreed to substantial reform in the structure and payments of their pension plans over the past couple of years. In all of these plans new hires are beginning their state or municipal careers under an entirely different set of rules regarding their pensions. These changes have been made in good faith by these employees and their unions in addition to contractual givebacks of benefits and pay raises in order to help share in the solution to our state’s financial woes. These things have been negotiated and agreed upon in order to construct a more sustainable system going forward. Even with these changes, however, if the state and municipalities neglect their financial obligations to properly fund these systems in the future we’ll be right back in the same position once again.

Much has been said and written about “broken promises” over the past year or so regarding this problem. Fiscal conservatives continue to point out that regardless of the promises made and our contractual obligations, that there’s “just no money” to keep these promises. In their minds it’s as simple as that. No money = cut current contractual benefits now or run the system dry and collect nothing.

As far as I’m concerned, neither is a reasonable solution. Do contracts between two parties hold any merit anymore?

All things, including accepted public moral behavior, are bound to repeat themselves over time. I believe it takes about four generations to complete a complete 360 degree turn-around to end up right back in the same position as one’s ancestors. Two generations ago our grandparents lived without contracts in their day-to-day dealings in most aspects of their personal lives – and even in small to mid-sized business transactions. About one generation ago, due in part to loosening public morals and character, our parents’ generation began to realize that they would need to have signed and notarized legal contracts in order to properly protect their interests – and they bemoaned the fact that the old-fashioned handshake that sealed deals in their parents’ day was no longer good enough between two parties to ensure that the deal would be honored by both.

At the present time we regret that things are not more like they were in the “good old days” when a man’s word was his bond. We complain that the kids presently have no understanding of the importance of moral values or good character, yet we seem to constantly teach them that somehow (via money or power or outright lying) they can dodge their responsibilities and walk away from their problems without dealing with the consequences. By all the public debate about walking away from the contractual obligations we’ve, as taxpayers via our government, agreed to we are again sending that message loud and clear to our children and teenagers – our future decision makers.

Can we continue down this path? I believe the answer is no. In the past two generations since our grandparents’ day we’ve wandered all the way from their accepted values of a handshake being the common way to seal an agreement with another person, to needing a signed contract in order to adequately protect one’s interests in inter-personal dealings and finally to disregarding contractual obligations altogether regardless of how many signatures and notary seals are on the paper – as long as it’s the best thing for us personally.

I predict that in the time that my grandchildren are making the decisions they’ll be back to the acceptance that a man’s word is his bond once again, sealing deals with a handshake. Unfortunately that will be much too late to be of any help in the situations we are struggling with at this time.

"And all this while we pay more per-capita than Boston, 230% of the national average, for fire coverage."

I did a little (very) research on this. That stat is completely misleading. The cost is for total fire protection, including fire alarms, sprinklers and EMS as well which is not in a lot of comparable city info. Boston FF's make a lot more than Prov. FF's, and Prov FF's are busier.

Well stated, Tom, thank you.

I was comparing the budget line-items, city-to-city. Granted, we throw in EMS under fire with the understanding that 'that usually comes from health/human services', but then you look over at our HHS budget and it's ALSO higher per-capita than our peers. Either way, something's not right here. A big part of it is the unfunded liability, which means that for ever dollar Providence allocates to firefighting, almost 1/2 has to go to cover retiree benefits (the number -should- look more like 1/5).

That said, you guys -do- do a great job of saving lives, we have one of the lowest fire fatality rates in the nation, in some of the harshest building conditions. Still, from a 'public policy' standpoint, we're spending 2-3 times the generally-accepted amount used to calculate value of lifesaving public services to save people from fires.

In comparing the per-capita cost for firefighting in RI, besides the huge factor of EMS being part of fire costs, you have to look at where RI stands in the nation as to how densely populated our state is. It's much costlier to provide fire protection for a family than for a lake or a tree.

Just don't confuse that with salary and pensions, especially the money spent in today's dollars that should have been spent twenty years ago by funding these pensions. Legislative bodies pass laws that let politicians defer payment, and in 2011 it looks like Providence Firefighters are making 230 times their peers. Simply not true. We're right in the middle somewhere, judging from the firefighters I know nationwide. Numbers can be misleading when tinkered with.

Tom wrote a lot and I agree that it was "well said", but I still have no idea what he said. It seems like it is basically saying "we have a deal, pay us". Right?

I agree that telling pensioners and employees after the fact that "screw you, we ain't paying" is a really bad way to go. But one thing that is missing from Tom's post is a solution. You understandably don't like the solution of "the money's not there, so you can't get paid", but what is the alternative? Simply pay up? Have you seen what the tax implications are to simply "pay up"?

At the same time, there is very little real talk of reforming the system, like changing to a defined contribution plan and not paying any pension money until SS retirement age. Otherwise, just doing a "pay up", literally will push the state into bankruptcy.

Again, part of the beef should be directed at the union leadership who negotiated the deal and then trusted the elected officials to properly save the money. Why didn't that happend? We point all the fingers at the politicians who didn't save the money, but what about the past union heads that didn't look out for their members' best interests and make sure the money was actually there?

"you have to look at where RI stands in the nation as to how densely populated our state is."

True, and you guys know how I'm often advocating for services in urban areas, because I live in one, and I know that it's 'different in the city'. Still, we pay, overall, more than most for our services. I think it's really important to at least split the budgets of fire and EMS, just so we can get a good look at how each is measuring-up. Right now we're an anomaly, and the fact that we're an anomaly is being used to justify high costs. We need to make the budgeting more granular so policy folks can do their jobs weighing dollars-vs-services.

"Legislative bodies pass laws that let politicians defer payment, and in 2011 it looks like Providence Firefighters are making 2.3[corrected] times their peers. Simply not true."

Right. I know this, too. That's why I support a system that would put actuaries along the 'production line' of these benefit structures. I don't want you guys promised something we can't deliver, it's worse than not promising it in the first place. It's especially bad if we end up paying more -and- you have to take a hit because politicians screwed taxpayers and workers over.

Politically, I'm not sure what this makes me. Some sort of horrible amalgamation of Progressive/Fiscal Conservative. I blame my artsy parents. :-)

Because the politicians control the money.

Tom's essay was well said in addressing the disintegration of decency and trust in our society. How can anybody offer a solution to that other than living your own life well, and honestly, and according to the rules of the land. Simple as that. The ship is sinking, I, and Tom are not to blame. And, we're not going down without a fight, and anybody that does so deserves to get what is, or is not coming to them.

In the end, we'll all get by, and hopefully future generations learn from this debacle and make the right moves, if that is a different pension package, or no pension at all, or a completely different version of our government remains to be seen. I just don't have the gas to make any real suggestions or execute change. I played by the rules that are biting me in the ass, and I have nobody to blame for that but myself.

[[[[ By the time one retires, one should have saved enough and paid off enough of their mortgages and so on to scale back on expenditures once they're no longer employed. In the private sector, with its absence of official retirement ages, readiness is part of what determines whether a worker can stop working. ]]]]

This statement is way off the mark in this discussion. A worker "should have saved enough" to provide for his retirement?

Why bother? What if the bank is allowed to close up shop and tell you your savings is either lost or going to be tied up so that you can't get your hands on it? Hey, it's only a contractual obligation that says they have to make your money available to you at any time, right?

Really, planning for and beginning retirement responsibly requires you to reveiw all your assets, investments and sources of income and balance them with your expected income needs. The last time I checked my pension was part of my investment for my retirement. It was, and has been since he time I joined the FD, a defined benefit plan. Therfore I could approximate the income I could reasonably expect to collect going forward based on my base salary over my last three working years and my years of service.

A defined contribution plan does not, and has never, allowed anyone to accurately predict the annual payout once they retired. Prior to the Bush years many people made MUCH more than any defined benefit plan on their investment. Since then many have lost a good portion of their investment. It must be noted, however, that many who lost great sums of their investment lost most of their inflated return on their original investment but were still ahead of the game. Many, sadly, lost part of their original investment as well.

The choice between a defined benefit plan and a defined contribution plan, at least to the employee, is much the same as the choice they make for life insurance - whole life or term. Many savvy investors, if thy can afford to do so, choose a combination of both. If not they must choose one or the other.

It doesn't make one plan or the other better - they're simply different. Timing and circumstance will tell, in the end, which was a better choice.

"michael's little tear-jerk expose merely tells me he didn't do his homework when he took the job. What did you expect you'd see every day working a rescue in a major city, Disneyland?"

The problem with your theory Mike is although at first its all good, no one really knows how constant exposure to those elements will effect someone. I'm all for pension reform but you can't expect someone to survive 40 years doing it especially when the general maladies associated with aging start to set in. It is a younger man's job despite some that hang in there for 30 years. They are the exception or just don't do their job.

As to Mangeek's suggestion, you can create only so many off front-line jobs. Pretty soon you wouldn't have enough people to man the front-line.

I agree age should be a factor and not just time of service for a pension but at the same token, you can't push a 55 year old out the door and expect him to find a decent job while waiting 10 years for a pension. Their marketability lessens every day after 50.

"you can create only so many off front-line jobs. Pretty soon you wouldn't have enough people to man the front-line."

I'm not so sure about this.

Look at what we have now: (lets use round numbers of 100 FTEs for sanity's sake)

100 people running 'the front line' for 20 years each making $50K plus benefits.
125 retirees between 40 and 65 collecting 66% plus health coverage.
70 people between 65 and 85 (some die) collecting 66% plus heath coverage.

Are you sure it wouldn't be cheaper to actually retain the middle group at lower wages for 20 years of back-end work while their contributed assets quadruple in the bank instead of just paying them? Hell, they can go work at the library, be building supers in the schools, dispatch, polish the trucks, or sit in the station and play cards.

It's more fiscally-sound (both pounds and pennies) to retain them. It wouldn't be if the liability was 'funded', but it ain't; may as well get some value/opportunity out of the deal.

Max's comment nails it, you can't push a person out the door at fifty and have him wait to collect their pension. There isn't a lot of need for a firefighter past his prime, it's that simple.

I started a business a year and a half ago, hoping to supplement my pension. My competition has an incredible head start, one person had the business handed to him by his wealthy family, while on their blue cross, another uses his place as a tax write-off against his very profitable jewelry business, another makes money selling products wholesale and making money from shipping and handling-highly unethical and probably illegal. Two people opened their place as a hobby, one is an architect, the other in real-estate.

My point is, while it always looks like the other guy has it made, it's not always clear what is really going on. Sure, my retiree health care makes it easier to stay competitive, like the painter Justin referred to, but there are a lot of behind the scene things in all aspects of life, and business that never see the light of day. The grass isn't greener on the other side. Well, maybe it is, I don't walk on the other side's grass, but at least I know that, and don't jump to conclusions based on the most current hysteria.

"F*** You, pay me"

Ballad Of The Public Union Pig

Thanks Tommy, right when we were getting really serious. Where were you four hours ago to spin this thread off to oblivion?

Anywho...

"This statement is way off the mark in this discussion. A worker "should have saved enough" to provide for his retirement?"

I think it's right on the money. I'm 28. I would love nothing more than to mess-around and spend more time hanging out, but I knew that without a degree I was up-against-it. So I bucked-up and got a mortgage before I was 30; I knew that I had to have my 30-year note paid off by the time I was 60, because that's when people in my line of work are generally considered 'nonviable' (technology moves fast) to the bean-counters.

I also contribute 16% of my income (with the match) to my retirement because 27 is actually a 'late start' to retirement savings, and it looks like I'm 'saving for two' (girlfriend hasn't saved and is older than me).

Where do they teach this stuff? Not in the public schools where the mantra, like yours, is "Save all you want, you're still gonna get screwed". It comes from a private school, where our teachers taught us how to build and protect wealth, while budgeting for the long term.

So you guys still haven't responded to my idea of having firefighters and police stay on the payrolls doing lower-grade work until they hit a socially-acceptable retirement age. Please tell me how you feel about it, because I think it's a really solid blend of Public Service, Fair Remuneration, Respect, and Fiscal Sensibility.

Not going to spend a lot of time on this...

Michael gives us a human interest piece as argument in his neat little teaser for his second book, conveniently advertised for free on Projo.com and this blog, but it is totally irrelevant to the pension discussion. If it were testimony, it wouldn't even be admissible. It's a fallacious emotional appeal, plain and simple, designed to get everyone to simply "back off" out of respect rather than correcting any misconceptions. Besides, what do you expect to see as an *emergency* medical technician? You mean I was expected to see raped, bound and tortured, and murdered women and children as a prosecutor? Who would have thought? I guess that means I'm damaged and fit for retirement now. I'm not a doctor, but sleep disorders and severe aches aren't exactly uncommon either. It means you're 50 - congratulations.

Tom Kenney's story is just that - a story. This fictionalized history of the United States where everyone was honest, hard-working, and honored all agreements with spit and a handshake half a century or a century ago is utter nonsense. Modern contract law developed heavily during that period out of necessity and the case law is a fun tour down the depths of human dishonesty and selfishness. The argument Tom makes is itself legally, economically, and morally totally off base as well - nobody could possibly reasonably believe that all agreements should be honored no matter what. Convenient that it directly benefits him financially in this particular situation - but all he cares about is "fairness" - ok, sure. Contracts very often should and need to be rewritten, and martyring an individual or an entire city for the sake of honoring an agreement to the letter is not justice. This is doubly true when the dubious and highly suspect agreements were made by politicians and labor representatives before many taxpayers in our society were even born. I never promised you *anything*, Tom.

It's nice to see a couple of old-time union brothers sticking together, but the congratulatory pats on the back after every post are unnecessary and don't bolster anyone's credibility either.

@mangeek,
I didn't realize you were referring to moving personnel to other departments within the municipality. I'm not sure it would work but your #1 obstacle will be the unions. Not only the union that individual is a member of but also the union where you would be moving them to. Good luck with that.

@ Dan:

I'm glad I posted my two-cents worth earlier because now that you're involved in the debate I'll bow out. I'm not going to argue with someone like you, it's useless.

Also, re:"I never promised you *anything*, Tom." No kidding! You don't even live in RI, do you? Keep your twisted and self-righteous comments to yourself - I'm not interested.

@mangeek:

[[[[ Where do they teach this stuff? Not in the public schools where the mantra, like yours, is "Save all you want, you're still gonna get screwed".]]]]

That's not my mantra. I'm 56 y/o and have worked on the PFD for over 30 years. I have planned for my retirement. Unfortunately part of my "plan" was knowing approximately what I was going to recieve fron my fair and not gold-plated pension payments. Now the taxpayers want to say, "Hey, we're struggling right now so we need you and your family to live on 1/2 of what we promised you. That's alright, Mr. Kenney, isn't it?

AND, FYI - many of these same taxpayers are the ones that have continually attempted to cut my present pay and benefits AND reduce staffing on my department.

These people think all public servants should be paid minimum wage with little or no benefits.

How can I argue with them? I began posting here to lend a voice to those people (and taxpayers) who don't agree with the fiscal policies usually discussed here. Without opposing opinions all you do is tell each other how great your ideas are and how unions are the downfall of humanity. lol

One thing the public employees need to understand is this - we will tell you what we want and what we want to pay you, as long as it is legal.
You have no right to a job working for us.
If you can't make it on what we offer you, then get another job. There are plenty willing to do every job out there.
If we can't get people to do the job for the measley wages we offer, we will have to pay more. If, perhaps, we don't want to pay more, then we have to make a decision on how important that function is to us, and how bad we really want it.
This is all called the free market.
When you enter the unions into the equation, the entire system gets f'd up, and that is where we are today.
The unions essentially force us to pay more than we have to for things we don't, or may not, want or need.
The first thing we need to do is get rid of public employee unions. They should be illegal. They do not benefit the taxpayer, they only screw them.
Public employees are not entitled to more rights than those they work for.
They have been so brainwashed by the unions they have lost sight of this fact.
It's time to get back to reality.
The days of the taxpayers funding a cushy life for the benefit of public employees and their families is over.

Mangeek, if there were positions where I could finish out my career at sixty doing something of value, while increasing my pension by 2 1/2 percent a year and retiring with 70% rather than 50% I'd be first in line. Those positions are gone, maybe they weren't needed in the first place, but as I stated earlier, the department is on a steady decline. We don't notice from day to day, but in a year or five, there are going to be some real, and ultimately very costly problems that will need addressing.

"...while increasing my pension by 2 1/2 percent a year and retiring with 70% rather than 50% I'd be first in line."

Um... Wow. That's a hard bargain. Why should you get a raise on an already good deal? I'm trying to find a 'middle' here that keeps you guys from having your stuff chopped in half, and makes sure you have enough to live on before you get to collect it. That's already a really good deal, I fail to see why it should be attached to increases in payout.

mangeek,
michael's comments merely provide more insight to the entitlement attitude gripping these public employees.
Comically, they really believe we need them.
The good thing coming out of Central Falls is these people are getting smacked in the face with reality.
They've been warned and warned and warned. I must say there is a certain satisfaction in being proven correct.
Now let's see if others learn anything from it. If michaels comments are any indication - they won't. Sucks for them.

@ mangeek & Mike Cappelli:

Do both of you, since you seem to resent the fact that his pension base rises by 2% per year after 20 years, think that a FF who retires after 20 years should get the same base pension as one who retires after 33 years?

"think that a FF who retires after 20 years should get the same base pension as one who retires after 33 years?"

I think the pension should have a 'max-out' that you hit after 20 years. After that, they let you keep your 11% contribution in your paycheck, and when you're 60-ish you can collect on the pension. In between the time you 'retire' and the time you start collecting, we give you a lower-grade job so you aren't cast out into the world with nothing. That doesn't mean you have to take the job, just that it's an option. Hell, you could go work for another FD if you wanted to and rack up a pension there, too.

If you work hard 20 years, you get a 66% pension, with COLAs indexed to the CPI, but you can't collect until you're 60.

Tom
I would say that someone who works 33 years should definitely get more of a pension than someone who works 20.
Still, nobody should be collecting a pension before 60ish years old.
However, expecting the taxpayers to fund a pension at 70% of ones salary is foolish.
Take a look at what private sector companies offer. Why should we pay you any more than that? We don't get that for ourselves - why should we provide it for you?

This is a place, I think, where it's possible to point out that proposals for switching over to 401(k) style plans aren't intended to be punititive. In a 401(k) system, where you deposit your money into your account AND get a match from the city right away, the problems unfilfilled promises (don't take IOUs from David Cicilline) and of passing burdens from generation to generation are greatly reduced.

Then I'd take the change a step further -- for everyone, not just public employees. Where there is now an age-based yes-no switch on when you can begin withdrawing funds from retirement accounts, implement a sliding tax-rate instead. Simple example: After age 62, all withdrawals are tax-free. Between 52 and 62, you pay normal income tax on withdrawals. Before 52, you pay 1.5 x normal income tax, or something like that.

This system could accomodate the firefighter who wants to work late into his career (Tom), the EMS officer who wants to try a second career (Michael) and the young guy starting out, who will want to try a variety of different jobs (Mangeek).

"switching over to 401(k) style plans aren't intended to be punititive."

I know, but my guess is that about 50% of the population, more in left-leaning areas, thinks that 401k/403b plans are 'a scam'.

I can say for certain that if I was a firefighter, I'd much rather contribute 11% and get an 11% match (unheard of in the private sector) that I had property rights and investment choices with than rely on the good-faith of politicians.

Tom Kenney - You will know truth if it first offends you. Could it be that your beloved union isn't as wonderful and benevolent as you had been led to believe over 30 years? How many more RI cities have to go bankrupt before you can accept that we were right all along? Your entire argument seems to be that the city hasn't been making all of its contributions - sad, but irrelevant. There is a structural deficit, not a one-time shortfall. And where do you think all that money went in the first place, Neverland? To your pay raises, benefits, etc. The whole system is an unsustainable scam any way you slice it and the politicians are only guilty of wallpapering over the ugly reality your union created for its own benefit.

Unionized/heavily Democrat/tax-happy Rhode Island is #50 for business right now. Why do you honestly think that is? Have you even given it a moment's thought? Right-to-work Virginia, where I chose to move (for its low taxes), is #1. You think I'm irrelevant because I left the state, but you're wrong. The question you should be asking but aren't is why Rhode Island is hemorrhaging capable young professionals like myself. Again, it's totally unsustainable.

Don't kid yourself, Tom. All you do here is harden your opponents against you. And this vision that you hold of yourself as the caped crusader is delusional and counterproductive. Do you know what the observer sees? A red-faced fireman raging and arguing against those who are forced to pay his salary and telling them that their opinions don't matter. A little graciousness and humility from you would go a long way, but that's not part of the union playbook.

"The question you should be asking but aren't is why Rhode Island is hemorrhaging capable young professionals like myself."

Periodically our State suffers with cramps and pains and discharges blood and clots. And then feels better.

Laugh it up, Phil. Rhode Island needed my business and tax dollars. Apparently this is all just a giant joke to you, including the people losing their homes and jobs. I and the other young professionals are never coming back. Rhode Island is already in an unrecoverable state of economic brain death. All that's left now is to remove Federal life support and your starving little commune experiment will be no more.

"I and the other young professionals are never coming back."

I'm glad to hear this in your case. But can you really presume to speak for others? What a childish self absorbed creature you are.

Call me a dunce (and many here have already) but it just occurred to me that many here are frustrated arguing with michael and myself because we continue to demand and expect our pensions. They think we're being disingenuous about the problems with the unfunded liability. I can't speak for michael but I do want to go on record as stating that I am well aware that the quickest and easiest way to get back on firm financial footing re: the pension system is pension reform going forward (which has already begun via concessions in the Prov police and fire system) AND cutting the benefits of those already on retirement and those ready to retire in the near future even though we are vested under the present rules.

That's the easiest way. Unfortunately that is not the fair and equitable way for those retirees and employees affected - including my family and myself.

It is immoral and illegal. Once again, these types of decissions - choosing the easiest way - are the ways of our present me, me, me generation.