One of my local city members wants to have a 401K

nadinbrzezinski

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Wed Feb-23-11 01:03 AM
Original message

One of my local city members wants to have a 401K

for police and fire...

Because you know the pension plan is not sustainable... never mind the current Mayor created this crisis when he was still part of the board as the Police Chief.

Demaio will do this, come hell or high water. Well folks it is COMING to California too.

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ProgressiveProfessor

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Wed Feb-23-11 01:56 AM
Response to Original message

1. The Gropenator tried and was turned back

Though it does make sense for many government workers who are not long term. Defined benefit is good if you are going to be there for a long time, defined contribution works for the more mobile members of society.

I actually have both from different parts of my life, but defined benefit is the large one. My kids with one exception have defined contribution and it will work much better for them. I see it as a generational thing reflecting a changing society.

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nadinbrzezinski

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Wed Feb-23-11 02:16 AM
Response to Reply #1

2. Police and fire are long term, generally speaking

and when they do go from one department to another, as laterals, their contributions (in Cali) go to CalPers anyway.

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ProgressiveProfessor

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Wed Feb-23-11 02:23 AM
Response to Reply #2

3. I beleive they will tend to be the exception rather than the rule in the future

Actually they don't really lateral well. When they move to a new dept they often start at the bottom and lose all seniority. Exception is chiefs who have individual contracts. Teachers often stay put as well for similar reasons.

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nadinbrzezinski

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Wed Feb-23-11 02:30 AM
Response to Reply #3

4. Well they want them to just have a 41K

and that is the problem. They want them to lose hard fought pensions.

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ProgressiveProfessor

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Wed Feb-23-11 02:34 AM
Response to Reply #4

7. Converting would be well nigh impossible since it would force immediate payout

and CalPERS etc just can not afford that. However, it does make great economic sense for the government employer.

IIRC, the Gropenator proposal was only for new workers, which is what the Feds did when they transitioned. I expect Jerry Brown to head that way soon and get it passed.

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dkf

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Wed Feb-23-11 02:31 AM
Response to Original message

5. Someone was mentioning to me that the young "kids" just starting a job

were going to have to pay a lot into the workplace pension to support the very generous benefits of the old timers. He felt bad for them and wished they could start a fresh plan where the kids have a chance to get a decent return.

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nadinbrzezinski

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Wed Feb-23-11 02:34 AM
Response to Reply #5

6. We can count on you

I know.

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dkf

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Wed Feb-23-11 06:26 AM
Response to Reply #6

8. This person was concerned that what had traditionally been seen as a positive

I.e. A Pension, was in actuality a negative. It was quite an insightful observation. He knew people who had retired in their 40's with pensions of 60k+ and was wondering how the fund would be there for these kids. If they have to put a portion of their salary to fund the pension plan that will collapse under it's obligations, the new hires won't get the types of returns the current retirees get.

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