Because they could keep those same people at a fraction of the cost. Heck, they offered my stepfather early retirement just so he could get paid twice as much by them as a subcontractor. That makes perfect business sense.
I don't expect to need Social Security because I am planning for my retirement, but I am perfectly OK with paying my 6% (my fair share) to assure that people in our society have a safety net. Taxes are the price we pay to live in a civilized society.
The government has been borrowing from Social Security for years and NOT PUTTING IT BACK then they want to turn around and say . .it isn't working it will fall short . .. . well . . .it wouldn't if they didn't BORROW FROM IT ALL THE TIME Rocket River
Money in the Social Security trust fund is invested in T-bills, American government debt instruments that pay interest to the trust fund. The only people saying that Social Security is in trouble are the ones who want to see it shut down altogether. SS is completely solvent as is with no changes until 2037. Eliminating the cap and means testing benefits push its solvency out into the next century. Social Security's ails are mostly mythical, though we will need to make some tweaks to the system over time as we have been for the last eight decades.
Let me get this straight, because you're a nice guy and I don't want to misunderstand you. You really believe that service men and women who have been in our military for 20 years, earning a pension, shouldn't be allowed to go to work somewhere else, work the alloted number of years earning them a pension, simply because they already have one? I don't want to hear anecdotal stories about folks in the service taking "early retirement" to work for a subcontractor. I'm talking about US military personnel who have put in 20 years, retired, and are drawing their pension. You think that is wrong?
All this is just arranging deck chairs on the Titanic. The ultimate problem is overpopulation, and the Earth no having enough resources (specifically, the living necessities people exchange for their money) to keep everyone happy, leading to insufficient living income for many people. At some point, violent redistribution of resources (and the accompanying heavy casualty rates) is the only possible solution.
Thats what they are offered, but I don't think the government should let them retire just to hire them back and pay them twice. If I had to go back and do it over, I would have joined the AF at 18, let them pay for my education, become an officer retired at 38 and then taken that same job with them for a substantial raise. It is a great deal. I actually tried to join the AF, but they wouldn't let me since I was married with two kids. If I ran the system I wouldn't foster a system that encourages me to overpay an individual. Especially when you are offering early retirements and making recruitment tougher because you already have too many military personnel. I'm not faulting the individual for taking what is available to them.
I would argue it's wrong. The government should pay them whatever they are worth. If they think they are worth twice as much, they should pay them that. If they don't, they shouldn't. But they shouldn't make them go through a bunch of weird procedural hurdles of artificially retiring and getting rehired to get paid more. That makes no sense and just penalizes the people that don't go through that process.
Social Security was not designed to, nor ever intended to be the only source of anyone's retirement. "We can never insure 100 percent of the population against 100 percent of the hazards and vicissitudes of life, but we have tried to frame a law which will give some measure of protection to the average citizen and his family against the loss of a job and against poverty ridden old age." Franklin Roosevelt
SS itself is solvent through 2037, but only because it would be cashing in its t-bills. That, unfortunately, makes the US Government insolvent. So technically, you're right. But practically speaking, unless you want the only function of government to be paying out Social Security, there's no way to remotely fund the government with the current SS setup.
I think all defined benefit pension plans all impractical because you never know what your outlay will be. I think its financially stupid to pay someone 50-60 years of pay for 20 years of service.
Not that young. I have several family members that have defined pension plans and I am happy for them. I just don't think the math adds up.
I simply don't get it. These aren't your typical government employees who retire and then are hired back because they are not easily replaced, meanwhile drawing retirement that they had earned. While I personally have no problem with the practice, knowing that it affects a small number of the total government employees, at least I can understand someone making an argument against it. I cannot understand an argument against what is a major incentive for our military people to make a career out of the professional military. I'm not talking about "the brass," the generals and admirals who go from high positions straight to defense contractors, but rather career professional members of the US military, who are taking repeated deployments in two wars while doing something the vast majority of the American people want no part in doing. Doing it while putting tremendous strain on their families and doing it for a salary that your typical American would laugh at when told of the work involved, not to mention the danger. No, I don't understand the complaint. I have a better understanding of the defined benefit plans for Texas state employees. While yes, there is a danger to solvency, Texas is much better positioned that a large majority of the states. The biggest problem for Texas has been the repeated refusal of the Republican state legislature to fund shortfalls that have come up during down times in the market, like that experienced recently. Had they done their fudicial duty, the state defined benefit system would be on much firmer ground. Instead, the state faces far increased costs to fund the retirement system going forward than what the cost would have been had they spent far less money maintaining funding during lean economic years. The state has a contract with its employees under the constitution of Texas. I don't expect that contract to be broken, at least in my lifetime.
The vast majority of private companies did away with their pensions in the late 1980s after the FASB changed the accounting rules for pensions. They simply hurt the bottom line too much. That is why so many people depend on a 401k. When I was studying accounting in the mid 1990s, pensions were treated as a bit of an antiquity because they had become rare in private industry. The exception to this is under certain union contracts, but that is a whole other animal.
My issue is not with them getting paid the extra money. Its with the procedure - if the person is worth twice as much as they are being paid, why should he or she have to go through the nonsense of retiring, getting a pension, waiting 90 days and hoping the job is still there to get rehired? It's procedural nonsense. If we think he or she is worth that much, just pay them that. If we don't, then don't. But don't make them go through artificial hoops to get paid twice as much as they were before. That's just a waste of everyone's time. But the legislature shouldn't have to be funding shortfalls - that goes against the very idea of a financially healthy pension plan. A properly managed DBP with the correct rates of return should be built to be able to handle any market downturns without a problem. If the plan needs to be bailed out when the market goes down significantly - which is something that happens fairly regularly - then it's not fiscally sound. I should clarify my original statement - I believe all DBPs that don't get secondary funding are doomed. If the plan gets supplemental funding from the state or locality, it can certainly survive as long as it keeps getting those funding injections. But the reality is that the plans will all require that extra funding because the accounting in them is fraudulent: its based on rates of return that everyone knows will not be achieved.
So true. Like many conservative/libertarian ideas you find big money pushing the agenda. some major mutual funds companies indirectly and at times rather publicly put money into the privitzation push which mainly relies on fear mongering. Such fear mongering has been fairly successful with particularly young folks who respond to their politically naive arguments. Socail security for practical purposes has the full faith and credit of the US gov and any politician who failed to make up a short fall would be removed from office at the next election.
I don't know about the gov't, but if you look at GM's balance sheet, pensions and health care obliagtions absolutely played a big part in taking down that company.
So true...when I started working for the govt. I always heard the pay sucked, but the benefits are good...BS...the benefits were expensive and the coverage the worst I've had in my entire career. The pay was good but that's few and far between...the pension was offered but was retracted to cut costs...wasn't the only reason I left, but would have been the only one I would have stayed for... Good for you and congrats! Again I have friends that work for the govt. and the older ones will have a pension, but the younger ones won't...IMHO, that's the only reason you work for the govt., is the pension...I see no harm in going back to govt. service for supplemental income, but no one should double dip pensions while doing so...let them contribute to a 401K like everyone else... BTW, if you're making any where near $100K at a govt. job, a pension should not be allowed...that is the equivalent pay for the private sector... Exactly...SS was never meant for this, however, as you guys know, for some, this is their retirement...and from what I've read, SS# will run out of money in a couple of decades as congress has basically borrowed against it to fund crap...
