Dan I would love to see you write an article on what we should do about the
teacher shortage in Utah. I think your insights into this problem would be a
There is a HUGE reason school is about to start and almost every district has
openings for teaching positions. Want to know what that reason is?
Just go read what Dan wrote. Then go read what SC matt is writing. No sane person wants to do it anymore. Who will teach our
@Shaun:"So you are using the same numbers that Dan says is not
realistic for pensions to calculate a 401k return and then saying that is a
great return."Pensions have different rules than individuals. I
can invest for 40 years, and can survive a downturn and in fact buy more in a
downturn. Pensions have people constantly withdrawing, and
constantly depositing. They have a different profile. And probably
not this year, but eventually we'll have a president who thinks 1.8% GDP
growth is pretty terrible, and rather than crowing about how wonderful he's
been, he'll shoot for 4.5%. I can wait that out.But even if it ends up being 6%, that's one doubling every 12 years, or a
factor of a bit over 10 in 40 years, which turns an 8% of salary initial
investment into a bit over 80%, which is exactly in line with retirement
@Lew Elton Jeppson:"Of course at some point in the future people
will get sick of all this patchwork uncertainty and we will have some sort of
socialism."Perhaps. But all the good ideas are coming from
conservative think tanks, and are promptly ignored by the liberals because of
the source.Google "UBI Charles Murray Wall Street Journal."
Why hasn't a Democrat picked this up and run with it?In the age
of Hillary and Bernie trying to out-left each other, it should be an easy call.
@The Educator:"Try investing in a 401k while making $30-35k like
many of Utah educators"Well, that's point now, isn't
it. 10% of $35k is $3.5k. The amount *your employer* spends on a
defined benefit pension is likely higher than that.You get benefits
as part of your total compenstation. Maybe the next contract negotiation, you
can get your employer to freeze your "defined benefit" pension where
ever it is and instead start investing 10% of salary into a 401k for all
teachers. But then, that's was what the writer of the article
suggested. And rather than accept that it might actually be a good idea,
instead you seem to be saying "yeah, but it won't work for me."Well, why not?
@Irony Guy "By gutting the schoolteacher pension plan, State Senator Dan
Liljenquist ended the last financial incentive to be a school teacher in
Utah."True, and your comment suggests a question to me. How
come Dan Liljenquist is the pension czar in Utah? He must have powerful
connections to be so situated.Also, I fear his comments are to
prepare state pensioners to lose their pensions with the slightest provocation.
He apparently gets great satisfaction from his work.
By gutting the schoolteacher pension plan, State Senator Dan Liljenquist ended
the last financial incentive to be a school teacher in Utah.Used to
be you got 30 years of poverty and then a comfortable retirement.Now
you just get 30 years of poverty. No wonder teachers are jumping
ship en masse. The Titanic is not a very hopeful place.
@SC Matt "Because it's all a matter of consistency. If you invest
regularly for 40 years, then the first year investments, even at 7.2% annually,
double four times. So, for the low-low price of 8% of your earnings, you can
have 128% after 40 years. "This is great - in theory. It
assumes no job losses, need to cash out, health catastrophes etc, which beset
most of us. The fact is, retirement security only exists - for most of us -
with social security and a defined benefit pension. Of course at
some point in the future people will get sick of all this patchwork uncertainty
and we will have some sort of socialism.
@SC Matt. So you are using the same numbers that Dan says is not realistic for
pensions to calculate a 401k return and then saying that is a great return.
@ SC MattTry investing in a 401k while making $30-35k like many of
Utah educators then come and talk to me. Thanks!Get
@Lew:"If there is no defined benefit, there is no retirement.
Period."I'd show you my financial engines projection.
There is retirement, and without a defined benefit. It's (for me) only a
question of 58 vs 60 vs 63. Well before SS, and well before
"full retirement age" that any "defined benefit plan" would have
made available to me if I was born 40 years earlier.It just takes
perseverance and will. Because it's all a matter of
consistency. If you invest regularly for 40 years, then the first year
investments, even at 7.2% annually, double four times. So, for the low-low
price of 8% of your earnings, you can have 128% after 40 years. And
many 401k plans, if you invest at least as much as you need to get the full
company match, will have you investing more than 8%. In mine, I'd only
need to put aside 4% of "my" money to get the other 4% of "the
company's" money. (Really, both are "mine" since I'd be
crazy to turn down free money, or to elect not to save.)
It's always easier when you're making $300k and living in a mansion
above everyone in the hills of north salt lake to blast public pensions. But to
those working tough jobs for $30-40k per year? Those pensions are precious.
It's part of their compensation for working bad jobs and receiving less in
salary. Since Mr Liljenquist eliminated public pensions in this state the
teacher shortage has gone from bad to worse. Coincidence? I think not!99.9 percent of our problems would be eliminated if state legislators could
just walk a day in our shoes. Get Educated
I have an idea for Dan and the Utah legislature! If they are truly
worried about the cost of pensions and health care spinning out of control, why
don't they lead by example and cut all of their pensions and free
government healthcare for life? Lead by example! Instead, it seems like many in
our legislature want the sacrifices to be made by police and teachers.
It's pretty simple. You can either pay public employees now or
later. If you're going to destroy their pensions then you'll need to
immediately raise taxes to pay for their drastic increases in salary. If you destroy their pensions and refuse to raise their salaries, then
you'll kill the profession. This is one of the major reasons we
have a teacher shortage in this state. Nice job dan, hey you built that!
Re: The Dan tsunami...The net result for teachers will eventually be
less pay as well as no retirement.Thanks...but no thanks, Dan.
When it comes to state employee pensions, it comes down to "pay now or pay
later." Many older teachers justified their low salaries and years with
little or no yearly increase because money going into a pension account was part
of their compensation package. Now the teachers are retiring and the public is
getting upset that so much money is going towards those retirement benefits.
This is money the teachers EARNED by accepting low wages with the understanding
they would benefit when they retired. The decision was made to defer as much of
the total compensation as possible to the future, to keep current salaries low.
Well now it's the future and the bill is due. And in 2011 a bill was passed
so teachers who started after 2011 get the low wages without the pension ...
I'm shocked fewer people are going into teaching.
Dan's successful bid to take down state pensions for employees and teachers
is the reason why the state cannot find qualified teachers. You don't even
have to have a degree or teaching certificate to teach in Utah any more, making
us even more of a national joke.Dan, once you give up your legislator
pension and/or lifetime of medical benefits I'll take you seriously.The legislators get medical care for life after they've been in office 10
years. That is the biggest scam going.
Dan Liljenquist is the person largely responsible for the destruction of what
may have been the best managed state retirement system in the nation.Please, readers, don't be foolish enough to fall for his nonsense.
Lew Elton Jeppson; Most beautiful article you have ever written. Now
tell us, PLEASE, why Republicans hate the Social Security System?
A pension is a promise. For years, teachers have been paid poorly but promised
a pension at retirement. These promises need to be fulfilled. It is not the
teachers fault if prior generations of government have not funded pensions
properly.Now, the proposal is to do away with pensions for future
hires. Fine. But, you will have to dramatically increase teachers pay so that
they can save their own money for retirement.Either let future
teachers have a pension, or increase their pay now. That is the only realistic
choice.Otherwise, the current teacher shortage will only get worse.
So public employees are paid like crap. And now, because of Dan, don't have
any pensions. And we wonder why there's such a teacher shortage in this
state?Where's the incentive to become a public worker?
Don't we care about our police and teachers? Get Educated
I have no doubt as to the current dire circumstances.But we must
understand that this is anything but new. Over 30 years ago I was hearing
analysts say that pensions were being underfunded. Now, with decades of neglect
under our belts, the problem is becoming acute. No surprise there.Part of this is a degree of dishonesty on the part of politicians (shocking I
know). They hire workers with a trade off - less pay now for better retirement
later. Now they want to renege.We can change the promise for the
future to better reflect what we can actually do (so that workers can make a
decision based on the new trade off). But workers with years and decades in the
system need to be protected.
Liljenquist tells us the sky is falling and offers nothing as far as a proposal.
So what's the point? Ever since the Reagan Administration, pension and
retirement programs have been cut, eliminated or otherwise restricted. It is a
problem of our own making, done with the objective of increasing the short term
bottom line of companies and serving the churning inclinations of Wall Street.
This is further complicated by Congress putting artificial constraints on our
ability to prepare ourselves individually for retirement. This is an area that
is a mess, and I am resentful of it. While Liljenquist is right to point out
that there is a problem, he should admit that I directly blame his political
party for this problem. Eviscerating public pensions because a portion of the
portfolio is in equity securities is a cop-out and and an excuse. It is abysmal
leadership, focused more on serving special interests rather than the American
Mr. Liljenquist: You are an alarmist and I believe a primary actor in the
teacher shortage and turnover crisis in our Utah schools. Many teachers, for
example, have taught 30 years and were paid poorly but promised good benefits
and pensions. You threaten that promises may be cut short, well, that would be
a crime and any that suggest that are implicit in immoral and unethical
behavior. The agreement was made, we won't pay you teachers a great salary
but stick it out you will get a pension. It's up to whatever level of
government to honor those promises or we don't have much of a government or
an ethical base as a people. End of story...
"But there is at least one thing we can do, and that is to create new
retirement plans for new public employees that don’t exacerbate an already
bad situation."Permit me to translate. There will be no funded
retirement for most new public employees, the same as with private sector
employees. As an aside: many private pension funds have been raided for a
variety of corporate purposes including the funding of corporate mergers. If there is no defined benefit, there is no retirement. Period.This situation points out the folly of providing retirement relying on
markets. Government must provide retirement. This is why social security must
NEVER BE PRIVITIZED. Social security looks pretty good compared to the private
retirement system, doesn't it?