POWIP Piece of Work In Progress – Former Abode of Dan Collins

Public Union (and other) Quickies 22Jun2011 – and my communal debut

Well, I have been test-driving this new communistic (what?) thingie Dan pointed out, and it has one major plus over POWIP: I can get to it from work. So I can post quick-n-dirty at lunch. Yay!

I'm a bit behind-hand cross-posting here due to other publication deadlines I have, but worry not -- my long form pension posts (which require a bit more link harvesting on my part) will still occur about once a week here at POWIP.

So here's what I've been posting about over there:
You didn't quit your state job? Here's some money! - Oklahoma has been shoveling out "longevity bonuses" to the tune of $42 million in 2010, that are given just for sticking around, with no tie to actual performance. People who got subsequently fired also got these bonuses. OK has a budget deficit to the tune of $500 million. Hmmm.

Unions: Why can't we buy pols like we used to?. A NY union finds that the once-sure bet of a Democratic politician lying to get elected (about cutting state jobs and benefits) is no longer so sure once the money runs dry. And that their political endorsement really means little. What, you were going to endorse a Republican? Ha ha ha.

Walmart lawsuit: not a class action - not much comment other than glad that statistics can't be used to "prove" a class or discrimination. I link to my favorite "discrimination" example, involving graduate school admissions at Berkeley.

My inaugural post: 5 Questions on Public Pensions really just 1 Question - which I will reproduce in its entirety below.

But these questions will work very well for the U.S., too:

1. How much should the taxpayer have to contribute to public sector pensions?
....
2. What will the accrual rate for the career average scheme be?
....
3. Will all public sector schemes face the same contribution hikes?
....
4. Will the government introduce primary legislation to put the new framework in place?
....
5. Which price index will the government use to uprate post-retirement pensions?

Putting these into U.S. English, the bottom line is how much should public employees cost?

How much of various risks should the taxpayers pay to take away from public employees? Longevity risk? (pensions paid as a life annuity as opposed to lump sum in cash) Inflation risk? (that's question 5 - relating to cost-of-living adjustments post-retirement) Investment risk? (A guaranteed payment amount at retirement, no matter what the underlying investments do)

There are insurance products that exist in the private market that are there to hedge these risks, either in combination or separately. And the government accounting standards used to value these guarantees put the values at much less than what private insurance companies have to hold in risk capital plus reserves for covering the exact same guarantees.

Because the government doesn't go out of business, supposedly.

Think on that.

Meep

Meep is a member of the Irish Catholic mafia, having a suspiciously high number of green-eyed, red-haired friends. While she doesn’t have red hair herself [except when she goes into the sun (rare for any vampire)], she does have green eyes. She’s a raving Papist and is a life actuary on the side [i.e., she counts dead people]. An amateur pain-in-the-ass [willing to go pro!], she likes covering retirement, mortality, math, and education issues.

More Posts