Allen Greenspan has said we need to recalibrate our government guaranteed pension plans. I could not agree more
However whereas Mr. Greenspan is talking about Social Security I am talking about the multi-trillion dollar public employee pension plans funded by taxpayers just like Social Security.
The reason we need to look at the public employee plans is because they, #1: provide more than Social Security, and #2: benefits start at an earlier age.
As an example, I recently requested and received two documents from government (taxpayer funded) pension institutions. The first one was from the Social Security Administration, which said I can expect a pension of $14,448 at age 62.
The other document, via a Freedom of Information Request, was from the Illinois Teachers Retirement System, which said there was a pensioner in their system that had a guaranteed-by-the-taxpayer pension of $15,514.
So you ask what is the big deal? Well my $14,448 was for an entire year at age 62, his $15,514 was for one month at age 57.
Which brings to mind two questions: how in the world are private sector retirees living on Social Security and perhaps a 401K plan going to be able to pay the taxes required to fund this man’s five million dollar retirement. And secondly, why should we have to?
My daughter, who works at Dominicks bagging groceries, made $7000 last year and paid $100 in income tax and about $300 in sales tax both of which go directly to support these humongous public pension funds. What is the moral argument for this reverse Robin Hood ; rob the poor and give it to the rich?
Meanwhile, here in Illinois, the Teacher Retirement System, State University Retirement System, and State Employee Retirement System has a combined deficit of $43 billion
Since we private sector workers have to pay for their pensions I suggest we establish a law whereby they pay for ours. I would call it the Fairness in Pension Funding Law and it would work like this: every public employee whose government guaranteed pension is more than twice the maximum Social Security pension would pay Social Security taxes on their pension.
This would offset somewhat, but not completely, our contributions to their pension. In addition, if retirement age for Social Security is moved up, public pensions should do the same. If Social Security cost-of-living goes up by 1% so do public pensions. If Social Security contributions go up so do the contributions from public retirees.