Archive
| No Joke Article on Pensions |
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| Written by Pete Theisen |
| Thursday, 24 February 2011 22:39 |
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"Dead Serious", folks, put out the cat and wrap your feet in a blanket for this one. No jokes, just business. To begin with, Sarasota HAS a pension plan. Sarasota Police have a defined benefit plan with COLA. That is the good news. Bad news? With the economic downturn over the last few years, "they" want to gut the pension plan to buy cool new stuff, kid-in-toy-store fashion. A mooring field? Ka-ching! "Sails" for the parking garage that change as often as milady's gown never mind where we keep them when not in use? No Problemo! Tax break for Marina Jack? Obvious public service! Money for these three baubles alone? Why, the pre-93 med plan contributions should cover them - if not, raise the contributions! If still not, gut the Police Pensions! Ah, but politics makes for strange bedfellows! Yesterday I had the honor of sharing the stump with a number of delightful fellows from PBA who, while forbidden to speak to me officially as individuals (US First Amendment, you know), were allowed to present a message through their union. It is quite a read. Of course, we would expect a union to present a case for what its members want, but in this case, we had better take notice. Written by Joe Bogdahn, principal of The Bogdahn Group, it does not read like a 70s Union Screed. In fact it is not a Union Screed at all. "The Unintended Consequences of Freezing a Defined Benefit Plan." If you would like a copy you can probably get one from Mike Welker This e-mail address is being protected from spambots. You need JavaScript enabled to view it . Without reproducing the article here - We have a Defined Benefit plan for the Police. Right now the plan could cost more than usual because of market conditions BUT market conditions are improving and these things average out. Florida Law requires the sponsors of such a plan (us) to make the minimum contributions to keep the plan "actuarially sound" so it IS in good shape, by law. Can we get a little back out of it if we "Freeze" it? I mean, what about a new change of sails or something equally ridiculous to brighten up the perennially grumpy out-of-town downtown merchants' moods? Perhaps, IF the fund is overfunded. But somehow, I don't think the fund is overfunded, at least not in "sail" amounts. Let's say we CAN'T. What about the proposed new Defined Contribution plan? Will we save money there? Well, the covered individuals will pay for it "themselves" but if we want to actually keep them we will have to either match their contributions and/or give them huge raises AND pay Social Security in the case of Police. Probably this will actually cost more than now. Defined Contribution is not as good for the employees, cops or otherwise. Why? Because such a Defined Contribution plan is almost guaranteed to go bust if a whole bunch of folks retired at once, like what is going to happen in the next few years as the "baby boomers" age. Not only that, we will still have to pay out the old plan so for the next half century we will be paying the old plan AND the new plan! Yep, the old plan doesn't just go away . . . WE WILL HAVE TO PAY FOR BOTH PLANS, AND WHATEVER WE BOUGHT WITH WHAT WE "SAVED"! Not only that, what we get won't be as good. If we do it ANYWAY who wins? Why, the promoters of the "new" plan, naturally! Why else would they promote it? Are we about to be taken? Not if I can help it! |
| Last Updated on Thursday, 24 February 2011 22:47 |
Political Advertisement paid for and Approved by Pete Theisen for City Commissioner.
