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(Clunk)

Well, I kinda blew it yesterday. In my piece about Social Security, I started off by misreading the original material. But then I more than made up for it by piling on quite a few more mistakes. I think it might be easier to just re-write the piece than to list and correct the errors.

Oh, what the hell.

Over at the American, there's a discussion about the crisis in public pension plans, and one idea to help fix that.

Currently, state and local governments can choose whether to have their employees enroll in Social Security or in a private pension plan. And those plans are so generous, it's putting quite a few states in serious financial straits.

The plan? Get rid of the pension plans entirely. Enroll all employees in Social Security.

Not too bad an idea. There's a concept I've run into several places called "eating your own dog food." It's usually in software, when it refers to making the software developers actually use their own product they're developing. Social Security is run by government employees, so why shouldn't other government employees be compelled to trust their brethren to administer their own retirement?

Now, there's no reason why state and local governments can't offer another retirement plan. I have a 401K plan through my employer, and that seems like a pretty decent deal to me.

But the incredibly generous pension plans offered by state and local governments are simply no longer sustainable. It's time to bring them in line with fiscal reality.


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Comments (9)

Social Security is a pensio... (Below threshold)

Social Security is a pension plan in that participants can get more than the market value of their 'contributions', so moving government employees into Social Security is better than leaving them in defined pension plans but really doesn't address the problem of government taking on more liability than they have funds to honor.

Even if the plans go throug... (Below threshold)
Stan:

Even if the plans go through, will the public service people enroll voluntarily or will they be forced to join like the rest of us? Only time will tell.

Good idea, Jay! Your sugges... (Below threshold)
Russ:

Good idea, Jay! Your suggestion makes far more sense than the GOP efforts to privatize social security, raise the retirement age, cut benefits, etc.

Forcing (yes, I did use the F word) all government employees into SS who aren't in there now makes a lot of sense.

Rolling their existing DCPs and pensions into SS or some SS-linked account may be a good idea as well. Zeroing out the state and local pension plans and moving that liability into Social Security instead will save many municipalities from bankruptcy.

Russ: so you relieve these ... (Below threshold)

Russ: so you relieve these municipalities from having to fund the pensions they so stupidly promised... by foisting the workers on Social Security? Aren't you simply shifting the burden onto the federal government? Isn't this just another bailout for the irresponsible?

Steve - I'm trying to find ... (Below threshold)
Russ:

Steve - I'm trying to find a way to protect the retirement of the American men and women who are caught in this bind. I don't think they are stupid.

For something like this to work you'd of course transfer the funds from the state and local municipalities' pension plans into the Social Security system, strengthening social security in the process. And you'd then have the federal government acting as an administrator - and the feds could collect funds from the state and local governments - and even withhold federal monies destined to the states and cities -- depositing those funds into the plan in behalf of the affected employees.

I'm not suggesting the feds just take over the liabilities, they'd also collect the assets and deposit funds into SS that are collected or withheld from the state and local governments.

Just looking for a way those men and women can salvage their retirements. I'm sure there are better ideas - I just don't think calling them stupid and walking away is a responsible thing to do - these are our fellow Americans.

I followed the link in your... (Below threshold)

I followed the link in your previous post to the original article. The important point, which you emphasized, is that Federal employees ought to be mandated to use the Federal pension plan, a.k.a. Social Security, especially since the rest of us have no choice. I commented about the absurdity on my blog, linking to the original article and giving you credit. So, gaffs notwithstanding, thanks for bringing the article to my attention.

"Good idea, Jay! Your su... (Below threshold)
914:

"Good idea, Jay! Your suggestion makes far more sense than the GOP efforts to privatize social security, raise the retirement age, cut benefits, etc."

Why would privatizing it be worse then letting a bunch of spoiled brat silver spoon politician's continue to pilfer it and leave iou's for someone else to pay when they get a fat pension , per diem's and the life of a celebrity just for spending our money?


2. "Social Security system, strengthening social security in the process. And you'd then have the federal government acting as an administrator"


Yes the federal government does such a fine job of administering dont they? Too themselve's that is.

Russ: but if the state pens... (Below threshold)
steve:

Russ: but if the state pension funds are underfunded, then you're adding to the social security deficit. And(if this is what you're suggesting) having the federal government siphon off money that would have gone to the states only works if the federal government doesn't just send more money to the states to make up for the shortfall (like was done with the stimulus)

I won't call them stupid, but I don't feel obliged to make good on their retirements. They picked their employer, they enjoyed the benefits of state government (decent pay, no job insecurity, etc) and they can suffer the consequences if things don't turn out quite as nice as they hoped... just as those of us employed in the private sector have to deal with the consequences if our choices (such as going to work for Enron) don't turn out like we had hoped.

Russ,1. The original... (Below threshold)
hcddbz:

Russ,
1. The original SS plan by GOP was to allow people to place 3% off SS fund in private plans. We know 100% of money contributed has been spent by Government. So to allow 3% of your money to be put in real Lock box is bad?




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