Doing a Job on the State
James Cournoyer, of North Smithfield, gets to the heart of the matter (after noting that public employees are paid workers, not volunteers):
… a public employee who starts working at age 25 with a $30,000 salary and annual raises of 3.25 percent will contribute $74,425 to the pension system over 20 years, assuming a contribution of 9 percent of his annual salary. Then, at the tender age of 45, that employee can begin collecting a pension equal to 50 percent of his highest five years that will grow by the almighty “cost of living” adjustment every year for 30 years, assuming a life expectancy of 75. Thus, the employee who contributed a mere $74,425 to the system will receive payments totaling $1,230,000 if he receives annual 3 percent cost-of-living adjustments. This is unsustainable, unfair and unacceptable.
Plowing streets and answering 911 calls entitles Hanson to a paycheck. It does not entitle Hanson to early retirement on the backs of his neighbors.
While the Journal does not purport that letters to the editor are accurate, repeating known falsehoods is another matter.
This letter is wrong on both the facts and the math in regard to the vast majority of public employees, so why would a “think tank” give it attention without correction?
Thank you for providing clarity and additional data to convince the unwashed masses, Bob. Your valuable insight and airtight arguments are a fine example to us all.
Notwithstanding how much the General Assembly has already placed into the state employee / teacher pension system (stipulated that the General Assembly has not contributed as much as it should have over the years – presumably with the blessing of the union leadership since it is right there with them in the back rooms with the General Assembly leadership, and in some cases is itself an official part of the leadership of the General Assembly … which sets budget / spending priorities);
AND the much-hyped employee percentage of pay contributions toward the pensions;
AND the investment returns on both …
The system STILL has a $5 BILLION dollar shortfall between contributed assets and investment returns vs. projected payouts.
IF the much-hyped employee contributions (and the investment returns thereon) were that significant in relation to the benefit formula, then by definition there wouldn’t be a $5 BILLION dollar shortage.
We taxpayers shouldn’t be subjected to a $5 billion dollar bailout of the pension system (whether by tax increases; pension obligation bonds or asset sales).
Rather, the benefit level should be reduced to match existing assets and realistic projections of investment returns AND all current and future public sector workers immediately converted to a defined contribution plan with a private-sector comparable employer match.
Walsh-I was a public employee rank and file union member for 25 years-I made some comments abou public employee unions in a previous thread directed to Pat Crowley-he chose not to answer because I presented him with a plain,serious topic for a change-making jokes only goes so far(I do have a tendency to beak balls,but I am not thin skinned either)-I pointed out a major difference between public and private sector unions.Check it out-you may disagree,but if you do,I ‘d like to know your reasoning
It was under Monique’s article on RI Independence Day where Crowley started the ball rolling and then disappeared from the thread
Mr. Walsh, be specific, Cournoyer was. He used the info presented by P.E. Hanson herself …he used 3.25%, which is the avg of what Hanson said they received as raises. He used a 50% Pension, which is what Hanson said they earn after 20 years. We are all well aware of the 3% Cost of Living increases …just ask Providence as they just got shafted again by the FD. Please don’t tell us your tired story about the “changes” made to the Pension. There are two simple questions to asnwer: One, is it not a fact that the VAST majority of current Pensioners, as well as those that will be going on Pension in the near future, receive minimum 3% COLA increases? Two: is it not true that RI’s public employee Pension System is one the most underfunded systems in the a nation? Three: is it not true that RI Public Employees have ZERO risk relative to the earnings or losses of the Pension system …they get their payout regardless of earnings and losses.
Face it, Bob, Cournoyer has your number!
Expecting to hear an accurate portrayal of the issue from Bob Walsh is wishful thinking. These union goons can’t stand facts and reason. They only know one thing – show me the money.
Well guess what Bob Walsh, your tired old act is coming to an end. The taxpayers are on to your shameless, greedy tactics. No more are we going to be conned by your specious cries of “the children”. It’s funny, even the teachers I know are getting pretty fed up with being tagged a bunch of lousy, greedy pigs. I make a point of reaming every teacher I know about their pig union leaders. And you know what – 90% of them don’t disagree. The tide is turning.
Joe B.,
Did the circumstances in letter apply to you as a retired public employee (as the excerpted letter implies)? They certainly do not apply to teachers or state employees in Rhode Island, whether in the old or new system.
Does any pension system simply accumulate pension contributions without investing them, as the writer’s math implies? Certainly not.
To all the rest of you,
Thanks, for once again showing my members what they would be up against if unions did not exist. Best recruiting tool we could ever have, reading some of your comments to the members. Outstanding work, I knew I could count on the regulars, and we even had a few new names this time! The children, especially, appreciate your efforts, for it is ultimately all about them!
My moles are telling me that real pension reform for both state and municipal “workers”, as opposed to that cosmetic farce a couple years back, will be shot down this year but pass in next year’s supplemental. The votes are there, Walsh and Crowley be damned.
Thankfully the commenters here are not indicitive of the general public. If Providence were full of Bill’s and his “shafted again by the FD” logic we wouldn’t be able to leave the fire stations. I deal with the citizens of Providence daily and the vast majority are supportive, dignified and polite. They get what they pay for. Little cheap shots are easy on the internet, not so much in real life where most of us live.
To Bob Walsh,
Just so you know,the VALID reason Cournoyer did not include “earnings” on your member’s contributions is because your members don’t have any risk associated with earnings or losses, as noted in Bill’s post.
The only two things that are “guaranteed” in the equation are the $75k of meager contributions made by your members and the payout after 20 years equal to 50% of the employee’s average salary during their last 5 years, plus their prescious cost of living adjustment. Cournoyer’s math, much to your dismay, is right on the money.
But if you want to move to a defined-contribution plan as opposed to a defined-benefit plan, then we’ll factor in potential “earnings”. Until then, Cournoyer’s math is correct, no matter how you and your ill-informed members try to spin it.
Bob-the circumstances in the letter did not exactly apply to me.I had 41/2 years with NY State as a “Tier 1” employee-as I recall it was a non-contributory pension,but I also got nothing when I left.Fair enough.With the Federal government I spent 20 years and 8 months on the job,plus 4 1/2 years active duty military,plus accrued sick leave(4 mos.)added to longevity.I retired at age 50 at 52% of my high 3 years.I could’ve gotten 62%,but took the lower amount to get better survivor benefits for my wife.That is reversible if she predeceases me.I was on hazardous duty retirement applicable to Federal law enforcement and firefighters,which meant I HAD to retire at 57,or switch to a non-hazardous position.I pay 50% of my health premiums,the same as active duty,except theirs are pretax income and mine is taxable(nice,huh?).I don’t think my retirement is the same as most state employees,but closer to police/fire except for health benefits.Disability retirement is almost unknown with the Feds because it sucks and it’s taxable.I do okay because thanks to the Vietnam war I have a 50% VA disability so my medical(NOT dental)care and meds are free.I gave you all this detail because I am not overly familiar with the state system.
Michael,
Do you have a more “dignified” way of explaining the actions of FD Union Pwesident Paul “I sat on my lazy union keester for 3+ years while collecting a taxpayer funded paycheck & benefits” Doughty?
Where were all those other upstanding FD members when the taxpayers were getting fleeced? Their silence was deafening.
Can you explain why RI has the highest per capita cost for Firefighters in the nation?
Can you explain why Doughty says essentially “I don’t care what the taxpayers can afford, we should get paid what other cities in the North East get paid”?
RI, unlike other North Eastern states is in a recession. How about Doughty try his hand in the real world and go get one of those high paying jobs in one of those other NE cities? He wouldn’t last a minute, so he stays and hides behind the diaper that is the Union.
Michael-I don’t think firemen are overpaid at all.they do agreat job at severe personal risk-I was a law enforcement officer on the street for a long time and I had to do some dangerous things,particularly in my 9 years in narcotics,but I take my hat off to firemen-I wouldn’t want to go into a dark blazing hot smoke-filled room-Worcester and 9/11 showed that firemen don’t make enough when you think how much some college professors spouting garbage make.Or even worse,directors of administration in the Cicilline regime.You know wht they say about firemen-they only come when you call them and then you really need them-I have no firemen in my family in case anybody wondered.
Walsh-I forgot two things-I had to buy back my military time for it to count on longevity,and more importantly the Federal retirement system for people hired after 12/31/83 is vastly different from mine-I am not too familiar with it,but it isn’t as good-the Federal system was reformed 24 years ago-and our COLA is 1/2 the Social Security COLA in case you were curious.
Joe,
You are wasting your time.
The ONLY thing Bob Walsh is interested in is lining his pockets and his union member’s pockets.
RI, by anyone’s measure, is over taxed due to over spending due to entitlement minded unions. Everyone, even the union members, know that to be true.
Budget deficits of close to $500 million, Pension shortfalls of $5 billion, etc. mean NOTHING to Bob Walsh and his union hacks.
Remember,Walsh and the Unions think they’re ENTITLED to bankrupt the state!
One correction.
“just ask Providence as they just got shafted again by the FD.”
Actually, Providence was shafted by the people with the power to do so: its extremely short sighted elected officials, including the mayor.
What’s the latest on his running for governor, by the way?
Monique,
You raise a valid point.
But let’s be real. It starts with the entitlement minded demands of the FD.
Our spineless elected officials need to stand up and say “enough is enough, here is what we can afford, if you don’t like it, move on, as well have 10 people in line tomorrow morning for everyone of your jobs …if you have the courage & skills to go find another job without the support of a mob, I mean a Union”
Who cares what Sissy-leany is going to do relative to Gov. Laffey will eat him & Linc alive. Can’t wait.
Actually, I think Bob Walsh offers a valid criticism of Mr. Cournoyer’s letter. Details to follow in the morning, in the form of the one-and-only Anchor Rising Pension Simulation.
‘Til then, ponder the irony that what Mr. Walsh perceives his members to be “up against” would be less of a problem, if only the public schools did a better job of teaching math…
Yogi Bear,
I think I’ve been clear and honest in previous posts and comments concerning your questions. Look in the topics section of this blog if you are actually interested in my answers. I have no problem if you don’t agree with what I have to say but I have no intention of going over the whole thing again.
And thanks, Joe.
>>It was under Monique’s article on RI Independence Day where Crowley started the ball rolling and then disappeared from the thread
Maybe it’s time we all chip in and buy Crowley a chicken suit. His duck costume is probably almost worn out by now anyway.
The state pensions formulas are much more generous than the 50 percent of five years being bandied about here. From the state pension system web site:
“If you are a state employee or public school teacher, you can retire with 28 years of service or at age 60 with 10 years of contributing service service if you are in Schedule A (vested as of 7/1/05). Schedule B members (vested after 7/1/05) may retire at age 65 with 10 years of service, or at age 59 with 29 years of service.”
“The amount of your retirement allowance will be determined by two factors: your years of creditable service and your average salary for your three highest ]consecutive years.” [UP TO 75%!]
The up to 75% of the three highest consecutive years explains why so many pack in as much overtime and other ways to goose their pay as possible toward the end.
For a 75k teacher, this equals a $56,250 pension to start (before the automatic 3% COLA’s start kicking in).
The average Social Security benefit is only about 12-13k, and maxes it at about one-half of the teachers pension.
Sure the state employees / teachers “contribute” toward their pension, but their benefit far exceeds that measly Social Security benefit that you “contribute” to, now doesn’t it?
Bill, the FD can demand all the entitlements we want but they don’t magically appear because we demanded them. The entitlements are earned, like it or not. A big reason I have rationalized my support of and membership in public employee unions while maintining a mostly conservative philosophy is people like yourself and Steve Laffey.
Andrew,
Don’t waste your time. I checked the math. It is simple.
Step 1:
Assume a starting salary of $30k and grow it by the annual salary increases that Ms. Hanson said they receive …$30,000 x 1.0325 x 1.0325 x …going out 20 years, resulting in a salary of $55,085 in year 20 and an average for the last 5 years of $51,725.
Step 2:
For each one of those years, contribute 9% [Ms. Hanson said they contribute between 8% and 10%]. The employee will contribute $2,700 in year 1; $4,958 in year 20 for a 20 year total contribution of $75k.
Step 3:
Take that 5 year average of $51,725 noted in Step 1 and apply the 50% Pension rate that Ms. Hanson said they receive after 20 years to get a $25,862 annual Pension in year 1. Grow that pension by a 3% COLA give-away for 30 years and you get a total of $1,230,000 of penion payments paid to a Pensioner that contributed only $75k.
It is that simple. Even a Bob Walsh union taught student could understand.
Now don’t try adding in “earnings”, as the employee has no risk relative to earnings and there are no gaurantees that earnings will materialize (go ask the Enron folks about that).
Also keep in mind, Mr. Cournoyer kept it simple for the simple minded and did not add in all the other goodies that get added to the Pension calculation, such as unused “sick time”, overtime, longevity, the kitchen sink, etc.
Lastly, as the Ragin Rhode Islander noted, the benefits are even better than those implied by Ms. Hanson and it did not include the generous taxpayer funded healthcare that Bob Walsh and his cronies receive compliments of the taxpayer.
Michael,
How about we have a “right to work” state and see if we can’t replace every last one of you entitlement minded fools with more reasonably paid employees?
Are you willing to let the free market work? Are you willing to compete like most people do and get ahead based on merit as opposed to Tenure? Doubt it.
It must be quite depressing to go thru life so non-self-reliant, so dependent on the Union.
Come on out into the real world. You might suprise yourself and make it after all.
I know you and you FD pals want to do to RI what the UAW did to the once mighty American automotive industry, but guys like Steve Laffey are going to get in your way.
“Do you have a more “dignified” way of explaining the actions of FD Union Pwesident Paul “I sat on my lazy union keester for 3+ years while collecting a taxpayer funded paycheck & benefits” Doughty?”
I’ve got pictures of Paul Doughty doing things on the job that would make you wet your pants. “Lazy” union keester” indeed.
Ad for “entitlements,” anything they’ve gotten in the last 4 contracts is because a neutral arbitrator gave it to them.
Typical Internet tough guys trying to knock down better men than themselves.
Bill, the “union” doesn’t put out fires, people put out fires. The “free market” has nothing to do with public safety. As for the “real world,” walk a mile in my shoes, you’ll see enough of it in a week to last you a lifetime.
EMT –
FD Union Pwesident Paul “I sat on my lazy union keester for 3+ years while collecting a taxpayer funded paycheck & benefits” Doughty would actually have to show up to work in order to things on the job that would make you wet your pants.
Doughty is the poster-child for the entitlement minded lazy no-show public employee.
Get over yourselves. You have a job like everyone else. The only difference is that your job, unlike mine, isn’t even in the Top 10 of most Dangerous jobs per the US Dept. of Labor. You just think it is, cuz you’ve watched too many “Rescue Me” episodes while sitting around on your keester eating Cheetos with Paul “No Show” Doughty.
When you are ready to let the free market determine your worth, as opposed to the Socialist system you depend on, then talk to me about being a real man.
And by the way, that whole hero-worship, “I’ve got pictures” thing you’ve got going for Paul “I prefer not to work” Doughty is kind of creepy.
So it is your assertion that he NEVER showed up to work in the time period in question? Do you REALLY want to go that route?
I’ve got the pictures. What do you have besides an inferiority complex?
EMT –
My assertion is that Paul “I’d prefer not to work” Doughty did not show up for work for over 3 years while collecting a taxpayer funded paycheck and benefits. This is not in dispute, as Lazy Paul ackowledged it himself.
He, in essence, did the Union thing and said he was “entitled” to the time off.
Give it up pal. Your dillusions of grandeour aside, you don’t have a leg to stand on in this issue. Your hero is a self-admitted lazy entitlement minded leech, plain and simple.
Now go back to watching re-runs of “Rescue Me”, while you hold pictures of Pauly No Show close to your heart.
Bill,
Paul Doughty is just one man, he doesn’t have multiple versions of himself to do his bidding. I have worked side by side with him during the three years he “did nothing.” He works hard for the people of Providence and for the most part they appreciate him.
This is the real world, not some simulated computer game. Get a life.
Michael – ok, so you apparently work for the union, ‘cuz for the 3+ years Paul “I work for the Union, not the Taxpayers” Doughty was a no show, he was doing union “work”. Again, there is no dipute on this issue, as Entitlement Paul has acknowledged this. Remember, he proudly told us he was “entitled” to stay home per the “contract”. So what you really meant to say was that “Pauly The Leech works hard for the Union, on the Taxpayer’s dime.” Right?
In terms of having someone “do his bidding”, isn’t that the whole point of the Union? Weak minded people who are too frightened to go into the real world and let the free market determine their worth join a Union so that the Union can do their “bidding”. Right?
You say “walk a mile in my shoes”. Give me a break. I couln’t walk one-hundred yards, never mind a mile, as I’m carrying all you entitlement minded Union hacks on my back!
Ok tough guy. You think you’ve got all the answers, I’ll show the whole site what a tool you really are. I’ll send Justin the pictures of Paul on the job during the period in question, and you can verify it with him.
Unless you still think I don’t have a leg to stand on.
EMT – I’m sure you have pictures of Pauly No Show doing his job with taxpayer funded assets (ropes, ladders, boats, trucks, etc.).
You are missing the point: you act like Pualy I’d Prefer Not to Work is doing something heroic on those rare occasions he actually worked, when in reality, he was simply doing the job he was paid to do, nothing more and nothing less.
My original point was where were all our upstanding FD members on the days (3+ years worth) when Lazy Paul was NOT showing up to the job he was paid to do?
Again, there is no dipute on this matter. Union Paul acknowledged he was not showing up to work (despite collecting a taxpayer funded paycheck and benefits), as he was home doing “union business”.
Show me all the pictures you want, it does not change the fact that it was wrong for Paul I Work For The Union On The Taxpayer’s Dime to not show up for work while getting paid. Nor do such pictures absolve your fellow FD members (including yourself) from staying silent while Paul I’m Allergic To Work sat home on his keester while collecting a taxpayer funded check.
Now get back to work and stop trying to defend the indefensible.
How many times do I have to tell you that I’m NOT A FIREFIGHTER? Serious reading comprehension problems you’ve got there. You bring that up every time we have this argument, and I tell you what the facts are every time, but yet you continue to insist that the reality you’ve created in your head is in fact true.
Who said anything about heroic? You’re putting words in my mouth. What I said was, it shows him doing things that would make you wet your pants. You’re right, that is his job- a job I’m starting to think you got rejected from.
I’m starting to see why you were turned down too. You acknowledge that I have evidence that disproves your entire argument, but insist that you’re still right. Are you sure you’re taking ALL of your meds?
EMT –
OK, you’re don’t work for the Fire department. You must just be a stalker taking pictures of your hero, Pauly No Show Doughty.
And wetting one’s pants is a Union thing, as they have the “protection” of the diaper that is the union.
Keep defending Lazy No Show Entitlement Minded Pual. Meanwhile the Golden Goose you’ve been living off of is going bankrupt. Good job EMT.