It is predicted that there are a lot of massive municipal bankruptcies on the Horizon. And sadly but true when talking about the public sector the only way to shed pension obligations is filing Chapter 9 bankruptcy. A report was just done that shows 85% of pensions plans could fail in 30 years. Click here... for CNBC article.
Over the last several decades, the private sector has moved increasingly to the 401(k)-style “defined contribution” model pension plan, which yields a retirement savings based on what both employers and employees have contributed to individual accounts. Public-sector workers, on the other hand, still rely on “defined benefit” pensions, which provide a guaranteed stream of income based on career longevity and late-career peak salaries.
Back in 2010, Lake Worth City Manager Susan Stanton said that she wanted a reduction of $1,816,000 by suspending the General Employee Defined Benefit Pension Plan and adopting a Defined Contribution Plan. City employee union members demonstrated against her appearing in front of city hall calling for her head. She also said, "The current compensation levels as defined in the three collective bargaining agreements need to be evaluated and realigned with the community's general ability to pay for those benefits." All good advice but this union backed trio fired her.
At the end of fiscal year 2013, the Lake Worth pension fund positions were as follows:
Employee retirement system: $65,044.534
Police: $30,546,979
Firefighters': $35,302,673.
Click here for descriptions of the Defined Benefit and Defined Contribution plans.
According to the city's 2015 calendar highlights booklet that was passed out, Budget Workshop #3 was scheduled for June 10. This has now been cancelled and the next budget workshop is on June 24. Pension plans that were brought up on April 8 at the first budget Workshop and allotted one hour of discussion are the elephants in the room that no one at city hall ever really discusses other than to tell us they are uncontrollable costs. City Manager Bornstein said that the city was discussing pensions but no information was brought forward.
If we could control pensions as well as the public safety budget, we would have money for all those potholes.
3 comments:
Why don't you have "guest blogger" next to this blog? You know you didn't write it yourself.
Who in the F*&K wrote it, anonymous? Thanks for your off-hand compliment. Go back and take that nap.
Wow, Lynn, you sure do get some weirdos on your blog. Thee more they poke you the mroe you know you are doing soemthing right. Keep hitting those little bastards.
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