The Wisconsin Lie Exposed – Taxpayers Actually Contribute Nothing To Public Employee Pensions
Forbes (of all publications!) Rick Ungar
The Policy Page(Note: I (trof) was a union member for all of my career. I understood that my pension contributions were 'deferred compensation'. I was making the contributions to my pension plan. The company basically said "This job is worth 'this' much to us. How do you want to receive your pay? Our union negotiators wisely elected to take part of our pay to put into a pension plan, part to pay for medical and dental insurance. Less take-home (and income tax) now, in return for a somewhat financially secure retirement when we'd probably be in a lower tax bracket. Smart.)
Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.
"Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers."
<snip>
"UPDATE: Since this post was published earlier today, many commenters have made the point that, while it is true that it is state employees’ own money that funds the pension plan, when the pension plan comes up short it is up to the taxpayer to make up the difference.
There is some truth in this – but not as much as many seem to think. Because the pension plan is a defined benefit plan – requiring the state to pay the agreed benefit for however long the employee may live in retirement- if the employee lives longer than the actuarial plan anticipated, the taxpayer is on the hook for the pay-outs during the longer life.
But is this the fault of the state employees? The pension agreements are the result of collective bargaining. That means that the state has every opportunity to properly calculate the anticipated lifespan and then add on some margin for error. What’s more, the losses taken by the pension funds over the past few years can hardly be blamed on the employees.Much more here:
http://blogs.forbes.com/rickungar/2011/02/25/the-wisconsin-lie-exposed-taxpayers-actually-contribute-nothing-to-public-employee-pensions/
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