California's Public Pension Crisis: Why It Matters to You | Lawrence McQuillan, PhD
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- Опубліковано 3 жов 2024
- Independent Institute Senior Fellow Lawrence McQuillan presentation at The Liberty Forum of Silicon Valley on May 8, 2018.
About the book California Dreaming: Lessons on How to Resolve America's Public Pension Crisis
www.independent...
Lawrence J. McQuillan is a Senior Fellow and Director of the Center on Entrepreneurial Innovation at the Independent Institute. He received his PhD in economics from George Mason University, and he has served as Chief Economist at the Illinois Policy Institute, Director of Business and Economic Studies at the Pacific Research Institute, Research Fellow at the Hoover Institution, and Founding Publisher and Contributing Editor of Economic Issues.
We thank The Liberty Forum of Silicon Valley for your permission to post this video. For more information www.liberty-fo...
"California has promised generous pensions to government employees over the past several decades. These promises are already straining the state's finances and may eventually bankrupt us. Independent Institute Fellow Lawrence McQuillan explains how this will profoundly affect every Californian."
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I'm a retired Firefighter. I was ask to get out of my union because I was totally opposed to the politicians my union backed. Now we find our state going bankrupt of the greed of police, fire, teachers and the desire for power of politicians. I'm ashamed of myself for not fighting against even harder than I did.
Thank you for spreading the word on this. Terrible. These jobs are lottery tickets off the backs of the working class
MY FRIEND WAS TOLD HE COULD FIGHT THEIR DECISION BUT HE'D PROBABLY RISK LOSING HIS MEDICAL INSURANCE! Until this last Monday 9/24/18 at 7:10 am my friend was a Maintenance Supervisor for one of CA's bus transit systems. 53 yrs old and after 28 years of loyal service he was told that he was caught on the companies surveillance system muttering "oh Fuck!" while looking at normal paperwork. A person spot checked over a weeks worth of overall surveillance videos in order to catch him and anyone in his age group doing anything "questionable". These city company's are doing anything possible in trying to force out employees at 53-55 yrs old where they are unexpectedly forced to take 40% or less of their pensions. These employees have worked 25 years plus assuming they'd retire with 70% of their ave pay. IT'S NOT THESE EMPLOYEES FAULT as its handled by the city and union who have completely screwed all these funds up! I remember the old days where everyone knew that if you had a city job, you were set for life. One of my law professors at U of Michigan Law said look to California if one wants to see what the future of the United States will look like, because everything is tried out in California before it's tried anywhere else.
One of the most needed videos on UA-cam IMO
The top paid pensioner in CALPERS is Curtis Ishii at over $418,600 per year. He will always eat even if you starve. The State is committing Genocide on the low and middle-class.
In 2009 during the financial crisis, New Mexico re-structured its pension plan to get it back on track. It is fully funded now. Sort of steer the ship before you hit the iceberg logic.
30 years of vacation
followed by Full Pension
2 words. Term Limit. So that others can provide for their families. These positions are not mean for them to retire. It's supposed to take care of the people and it's citizens.
Schools are only allowed a certain percentage of taxes by state law. They shouldn't be able to promise amounts that need to be covered by additional taxes or put on the hook to the taxpayers.
Shut down public pension funds . Allow employees to save and invest themselves if they chose
Politicians, enough said.
I have had a 401 (k) shortly after they were introduced. When I retired a few years ago the value was $1.4 M and no one can take it away from me. If I was relying on a city or county pension there is no guarantee these benefits will not be reduced in the future under Chapter 9 bankruptcy protection. If the federal bankruptcy laws are changed and it passes the constitutional challenge on the basis of the contracts clause, states will also be able to restructure their pension programs which they cannot do with my 401 (k).
Tragic. Key is to deal with the National Debt ($21,000,000,000,000 Trillion) and the Federal Reserve (currency control, fractional reserve banking) issues.
Thank you! Check out McMasters wonderful 3 hours or so video on the Federal Reserve, history back to Jesus' time re: currency and viable solutions for TODAY.
@@cessaly100 yes, thats extremely helpful.
SB400, CalPers testified would cost nothing, ZERO! Actual costs are $10 billion+.
And this is just one reason I left California. I don't have a PHD, but I'm good at math. After living there a while I could see the entire state was mismanaged and on an unsustainable trajectory. Management where I worked pushed 401ks on us and told us they were way better than a union pension. Good riddance.
EVERY STATE EMPLOYEE SHOULD BE IN A 401k PLAN LIKE THE REST OF US
Hey, Kinnish, A 401K plan? Why would I take $70K from the state, when Private industry pays $130K. PENSIONS and MEDICALI was offered $60/hr + Dollar for Dollar match $12K/yr(that's $24K/yr to 401K) from a private Employer, 20years ago I went with the state $2200/mo+ $500/mo Medical after 20Years (so I don't have to wait till Medicare)Again, Why would I take $70K from the state, when Private industry pays $130K.PENSIONS and MEDICAL
Kinnish
ALL PUBLIC SERVANTS SHOULD GET 401K JUST LIKE PRIVATE SECTOR - IF THEY ARE LUCKY
@@tisheysman9738 You're jealous and probably made poor choices.
I respectfully disagree, somewhat. 401Ks SUCK! 'defined benefit' vs 'defined contribution'. Defined benefit is politicians promising you the sky and taxing the hell out of us to meet these obligations. Corruption Inc. Payouts, can't possibly be met. Defined contribution, is like 401k but more options. No false promises. You don't put money in, you get nothing out.
401K: You going to be eating canned beans in your retirement years.
New York City is in the same situation!!!
A few years ago I was contemplating ways to stop ( or at least severely reduce ) government waste and corruption. I think that I prefer this one . A jury duty type system where citizens are required to ( if able) serve as government oversight personnel and work a given amount of time ,for expenses only, putting in, say, 2 or 3 years. Either all at once or over time. We would all have some knowledge of the task, having learned it in HS civics classes. This idea may not be that great but it's the only one I could think of that might prevent corruption by the overseers themselves by removing any financial incentives.
We should just install nanny cams in their offices and watch them like hawks.
Love my State retirement, been getting a monthly deposit in my checking account for the last 8 years with a cola of 2%. So, keep working and paying your taxes, I need my check!
Amazon is always hiring!!!
Xavier Lopez Working on my second pension, need one more year to be vested! Don’t hate the player, hate the game.
When Bastille Day comes, we are going after the people who rigged the system. You are worth just the same as everyone else, about $1.00, the cost of one round of 5.56.
@@amazoidal That's not very nice. Shame on you.
I think CA pension should be overhauled. But this guy doesn’t mention how most people in the private sector mismanage their money and don’t save because they are buying things they don’t need....
401K's are a rip off. Filled with fees and at the whim of Wall Street, you will need between 1.5 to 2 million for retirement. If you have one of these, good luck!
There are plenty of low fee ones (depending on your employer), but yes your point is still correct. However, pension is the ultimate lie when they forecast using crazy %. They guarantee these returns, and these are compounded. That's why they are failing all over the place.
There are stock charting tools that people can use to help them manage their own retirement accounts. They just have to look. Right now I'm gaining more money than I'm losing because I took the time to look at those stock charting tools and picked the ones that worked for me. After people learn how those tools that I just mentioned work, it's all common sense from there.
@@LA_Commander Of course not. Not anymore. They were intentionally losing money of mine to keep my portfolio "well balanced" Watch this, then come back and call me out. The Retirement Gamble
ua-cam.com/video/gxMvWE4fjN4/v-deo.html
@@TheBandit7613 Then you should have gotten an IRA from Fidelity Investments or the Vanguard Group.Those are the two places I would go to. However I lean more towards Fidelity Investments. Learn how to read stock charts and learn some technical analysis while you're at it. That's how I'm gaining and preserving more money than I'm losing. First you need to learn how the investments work. Happy money making.
@@LA_Commander My plan is working out well. Since I'm a California state employee, I get my 401(k) plan through the State of California Savings Plus Program and they also have the 457 plan. Each plan can either be Roth or Pre-taxed and each plan charges $1.50 per month. I manage my retirement account by learning how to read and use stock charts to make my investment decisions and have been getting good returns with my plan. In 2018 I got a 20.5% rate of return. In 2019 my rate of return was 22.6%. I'm yet to see my rate of return at the end of the year 2020. Anybody can make money with Wall Street. Just have to learn the tools that will help them make money. I did all this without the help of an investment advisor.
I would love to have an update of the current numbers
In the early 70's before IRAs were invented, companies laid off older workers who were about to be eligible for pension - also some companies went bankrupt cuz couldn't pay the pensions - so the PBGC was created as a protection -insurance that companies would have to pay . . . also IRA/then 401k invented and companies realized that DC plans = zero company liability . BUT BUT BUT the governments did NOT follow suit . . . they continued to do their hocus pocus sleight of hand accounting hiding, never reporting or admitting the unfunded pension liabilities for DECADES! and NOW they can't pay but all the US taxpayers will have to PAY! Isn't that a BEAUTIFUL plan? Brilliant!
Update. Cali is NOT booming. Minus $54B and counting
I’ve shared this subject, but it always falls on deaf ears. MOST fail to see the possibility of a total collapse, but overwhelming believe, yes the market goes in cycles and will always correct SHORTLY. 2008 I saw so many homeowners lose their homes. A few in my small neighborhood lost their homes to the banks. Debt in US and all over the world is at a historic high. Even though economy is slowing down, there are way too many inexperienced investors speculating in the market and contributing to the rise of stock price. It was reported that Robinhood account holders purchased Hertz in large numbers.
As a highly skilled heavy equipment operator working for a municipal employer, no pension, no deal. I'll go to a private sector employer and make more money.
The state pays less than the private sector, the only draw is the pension. There's no freebies. Want good workers, gonna have to pony up.
Bullshit, you make as much or more than the private sector! What you said has not been true for over 30 years! Why should you as a public employee be paid a pension Funded by tax payers that is 10 , 20 , 30 , 40 times more than the average tax payer will get from social security. You should be on social security JUST LIKE EVERYONE ELSE THAT PAYS FOR YOU! If you don’t like it , QUIT! I guarantee you can be replaced in 72 hours. People are furious with you for having to pay for your ridiculous pension when they will get nothing close to what you get as a public employee.Quit cheating the taxpayers and shut up and do your job!! Any PUBLIC pension should HAVE to be approved by the vote of taxpayers since we are the ones that pay your pension !!!
Can cities withdraw from CalPers going forward or are they obligated by law to remain? Why is one governor after another ignoring this problem? Is there a drop dead date when the grim reaper comes knocking?
It's been about pension legacies now for the last 25 years but we're still ignoring it. All those companies back in the 1960s - 1990s (including the USA postal service) included pensions as a ploy to reduce dollars in the paychecks . It was a gimmick that has come back to haunt them. I expect new legislation that will eliminate/reduce promised pensions in some way as to allow the companies to stay in business. I for one disagree. Those companies should pay up, even if it means the CEOs have to except smaller yearly bonus and even sell their cars/mansions.
What happens if the stock market drops 50% I read that the market was overvalued by 50% is it me or what. It appears a lot of emphasis is placed on supporting the market to move higher at what ever price.
If I am a politician it is easy to promise the world because by the time you know what hits the fan I will be long out of office and retired to a low cost city and state enjoying my over-sized pension along with other former public employees from my state.
BuffteethrBlog
they ALL been doing this
I became a cop in 1986 at $11.00 per hour. I was told I would never get rich, I would get a bad back and bad knees, I would be prone to divorce, and I wouldn’t live as long. BUT, I would have a good retirement.
That was your choice. You don't deserve anything the rest of us don't have.
yelwing thank you for your service in law enforcement. My brother in law retired also from law enforcement
The public sectors (govt) employees dont realise that they have a secure job with better pay and conditions and retirement funds, if they had been in private sector they would have had non of these. In USA being a cop must be most dangerous job in world, firefighters and teachers nòòooooooooooooo
@@judeoko I'm retired now, but as a former CA teacher, I was always acutely aware of how lucky I was. The trade off was that I had to endure working in an inner city school (which is a gritty and often disheartening experience). I endured, for many years, the insults and disrespect that students constantly dish out to teachers. I also put every dime I could into my 403b account. All I do now is work-out and take courses. I hope CalSTRS can stay solvent for the next dozen or so years (at which point I'll probably be dead!).
@@joanblond8527 Good luck to those with 401K's. They want us to be as miserable as they are. 401K's were never designed as a retirement tool. It was a tax shelter.
500$ a month into a good mutual fund will net you close to 3 million over 35 yrs with compound interest!
A depression is needed to clean up the system ..
I know retired Firefighter chief who gets 16,000.00 a month.I wish I got in that mafia early stage in life.
Public pensions need to be voted out. Private industry ended this luxury half a century ago.
DaveBraga
YES!!! Bye Public Servants Good Living Safety Net Shake Downs On Taxpayer's Homes!!
I agree. Plus, he does not mention, 55% of married men will get a divorce. The Jewish lawyers will screw him for the rest of his ruined life. Suicide anyone?
Look at the percentages of teachers who NEVER ever obtain monies paid in due to non-portability of this system. Remember the recession? No teaching jobs! They leave & the $$$ doesn't go with them! CA gets to keep $ esp. if the teacher wasn't vested for 5 yrs.
30 years? Most teachers leave by 5 yrs. So this is NOT a continuing problem!!!!!!
B Burton
Teachers are OVER PAID
Thanks again for blaming the employees.
Oh please, public employees don't get Social Security. Did you know that? How's your $1.4 million Social Security nest egg? Are you a millionaire and didn't know it, or is it really that we are all just being cheated?
noblelies
Public Servants most certainly DO get social security. Three of my neighbors are retired from county positions and they get their social security checks at the beginning of each month, and their pension checks in the 2nd week. The only public servant around here that doesn't get social security are cops, and most of THEM also are getting social security because they were "moon lighting" in additional security gigs outside of the police force.
and majority still do today...
I wouldn’t call it cheated I would called it lied to about reality.
Oh please, do you not realize that most of us in private sector PAID into SS? And if you make any decent money, you put in far more than you would get back. I dunno if your 1.4M number is accurate but what you're leaving out is that I've been paying into it for 30-40 years before I get it. Not to mention they will have to jack up the SS contribution rates to make up for the missing piece before 2035.
I am sorry but I am all for negotiating new contracts but to change a signed and agreed to one should be illilegal. File bankruptcy if you can't pay like some cities have done. This can be easily fixed on a go forward basis without breaking an agreed to contract. I have no skin is n this game but I can guarantee you would sue a company who didn't file bankruptcy and tried to not pay you an agreed to contract.
KTMs 1
WHO were the "parties" to these contracts? ALL of them were "feeding at the government trough" - Lol - The private sector has always stood on the sidelines of your contract talks - trying to run viable businesses, working 2 and 3 jobs - without a "net" - NO healthcare or paid days off - no paid vacations - no automatic cost of living increases - and yet the "public servants" STILL don't get it - cause while they SHOULD have been running a fiscally sound government LOWERING Property Taxes (so citizens could bring even more private sector monies into their communities) - the municipalities ALWAYS angle themselves to go "shake down" the most viable, promising communities to SLAP on more and more and more "property assessments" and all their additional bull.
it's a RACKET and needs to STOP - ABOLISH ALL PUBLIC SERVANTS' PENSIONS NOW!!!
Time to cancel ALL public pensions and recalibrate EVERYONE to the AVERAGE pension or SSA equivalent.
401k are a damn scam
the system like a pyramid. public sector is at the top of and the private sector is at the bottom the very FOUNDATION! (the tax payer). well, the pyramid is upside down now and doesn't work that way. just think of your house with out a foundation. how long do you think it will last.
reform #8 - tell the federal reserve to stop printing money and lowering interest rates so its easier for these pension plans to generate returns. They have killed bonds which was at least 4 to 5% return of the 7% return. This is the major issue
WRONG ... It’s not the system, it’s the gross mismanagement by all the involved agencies. The employees pay for their pension all through their respective career the same as you do for Social Security.
The formula you reference varies by agency, they are not all the same. Each agency has their own contract with the PERS system. If you personally put seven to ten percent of your salary into a safe investment folder, you too could retire with the same nest egg and live off the interest.
Not all agencies pay for medical coverage after retirement. The benefits do not cost the tax payers a penny.
Sorry sir but you have no idea what you’re talking about regardless of your supposed credentials.
I'm not debating what you are saying to the video but the existence of a pension system is still very big problem. The country as a whole needs to either go with 401k (despite its flaws) or come up with a new system. There shouldn't be variations when it comes to retirement. Everyone who works should be entitled to the same level of risk, the same level of reward when it comes to saving for the future. Why are we allowing selective groups of people to have access to different retirement systems? It makes no sense and only causes more inequality. When you give special treatment to a specific group, you are mistreating the others, in this case, 90% of the labor force where we don't work for the government.
DailyRant Those government employees worked for a somewhat lower wage all those years in exchange for the retirement program. It’s not our fault that your employer does not grant you the same. Does the wage inequity matter to you? I was offered other employment at a higher salary but declined due to the benefit of the system. Are you willing to allow your employer to withhold 7-8% of your salary to place in an account for you? That’s what was done to me. It’s not special treatment it’s a mutually agreed to contract. Negotiate your own contract and you could have the same thing.
I really get tired of whiners when they rant on something they really know nothing about.
@@DavidWilson-eu1mv No one is saying government wages should be lower though. But a lot of government jobs are also overpaid (yes I already acknowledged some jobs are underpaid). There shouldn't be special treatment for either side is my point. I'm in Illinois and we have more overpaid than underpaid (I believe we're top 2 or something when it comes to public worker salary in the nation). I personally know people that are paid $80K as of 2019 for answering business tax questions on the phone (AKA no different than an H&R block "accountant" who is paid 50% or even less). We also have state park "administrators" who are paid like $200K and up. Do you know how difficult it is to earn $200K in private sector?
@@dailyrant4068 The IRA is a lot better than the employer sponsored plan.
@@Jimsac8 How is that relevant to the discussion at all?
Analyze the 'psychology' of enticing employees to STAY (retain) in order to collect pension - what impact does this have on motivation? esp in an environment of employment 'protection' such that very difficult to fire a gov't employee. I've seen older people 'hang on to their jobs' to collect the pension and they were so angry, miserable, unhappy - prob on anti depressants . . . perverse.
We Californians pay taxes we need our pensions. The government needs to stop taking away money from tax payers
Norma Lathan
there's NO such thing as a "public" "servant" paying taxes because they ALREADY LIVE OFF TAXES - so you're basically putting your taxes INTO YOUR OWN POT - Lol - The ONLY variable that keep this game going aka the goose that lays the golden egg is the PRIVATE SECTOR - who have to suffer ups & downs of the economy WITHOUT A NET. Public Pensions need to be ABOLISHED NOW - STOP SHAKING US DOWN
I was with him until he said young ppl like jumping around jobs and 401ks are a good idea.... no one vests into their employees 401k and we don't like to jump around, the market forces us to. I was mass laid off over 3 times before 30.
I think everyone reading this right now has lived in California long enough and observed to politicians long enough to know if they didn’t spin that money on state workers pensions, politicians would just figure out somewhere else to spend it. So, instead of rewarding the police officer who protects you every day, The money would simply go to give free housing to illegal aliens, beefed up welfare checks, etc. We have all been in California long enough to know what I’m saying is true.
Accountability? What a novel idea? But that doesn’t FEEL GOOD!🤔
Give a cut equal to funding shortfall, those that save for their own retirement have to cut back when the market drops.
Good enough for the Goose is good enough for the Gander.
Government employees, the only class of Americans that are paid not to work!
Math is not the strength if government employees!
Kevin
California pensioners don't pay into soc sec and therefore have no soc security coming.
FORMULA 4 FAILURE??? LETS TRY GOVERNMENT UNIONS
So when the shit hits the fan and wal street starts running for those golden parachutes which are linked to all 401k then what...transparency and being able to move your money means nothing...you will have to start all over again that's if you did not jump without a chute...
Overpromised and underfunded. Dreamland meets reality. Not a good combination.. what's unfair and sad is that private tax payers like me are on the hook. Who is going to save or help me with my own retirement concerns?
This is frightening news
I wonder how many other states have utilized these policies?
Paul Angeli just about all of them, and many state will have cut back the benefits. Check out Connecticut, Illinois, New Jersey, many other states.
TheDemonnat that's what I was afraid of. Thanks for the info!
Illinois is bankrupt due to pensions.
New Mexico did back in 2009 and got pensions in the green now.
TheDemonnat
Best news EVA
I'm from the UK (England Scotland Ireland and whales) it's the same here. Thing is politicians get pensions so their pensions are over generous as well. It just filters down to the rest of govt employees. Only people who can retire are the govt workers.
401k your lost is not lost you made it up by your contribution to the fund whow what a shame or scam
U will be a burden in south east asia without pension , no money no honey,
If people dont have over a million in their 401k by time they retire they didnt invest right or enough!
Its called inflation buddy! you have to add that factor in, i love how these guys cherry pick numbers and leave out crucial data, its 2% at 62 now, you have to include inflation which has been massive since 1932. i would have taken 1.4% at 65 in 1932 because the money went alot further then it does today
Also mind you Gov employees get a living wage, paid vacations and health care plus their pension. Gov ee's are millionaires.
Curtiss Harris
Yup. "For life" - regardless of what is happening in the REAL economy. These municipal "servants" are a propped up middle and upper middle class that are one and the same as petit bourgeois aka minor earls, squires, duchesses & countesses.
They RUN THEIR FIEFDOMS as if the Public Sector are their Serfs - And it's way past time they get put back in their place:. At The Bottom.
- ATLAS SHRUGGED -
you are taking every ones 401k to retire now with nothing for us
Buy GOLD and SILVER people and put it in a hidden SAFE place.
This is what socialism gets you.
Very informative. I met a person who works for the city of Chula Vista (near San Diego). He's approx 55, and when he reaches 30 years his pension will include 100% of salary. New employees receive lower package. CV's share to cover Calpers deficit is $23 million!!
Kim Taylor
Public Servants = Taxpayer's Debt For Life and NEVER ending PROPERTY TAX INCREASES
Public servants do never get 100% no matter how many years they worked quit spreading BS!!🌛
Ha ha. How will young people pay the tax burden for these old farts pensions? Young people can not get a decent job. They are living in their parent’s basements. Implement Edward G Robinson Solent Green euthanasia rooms. Speaker offers some recommendations, but people are too selfish, will never happen. Suckers who get married and have children have a yoke around their neck. They will end up divorced and bankrupt, driven insane.
What a bunch of crap, working for the public system and getting a pension is not the problem it’s the upper administration and politics that rape the system. Private sector earns way more than public sector per same job so making a lot less during your career as a public employee should provide a better retirement.
2-4% for 401k... LOL.... try 12 to 14%, min
jcman240 12 to 14% is crazy
Let them secede! lmao
This is a classic problem. The labor unions ran into this. Millions have run into this. The idea is that we establish a pension plan, collect money for 10 or 15 years. As people retire you let the ones who are in the system pay the benefits of those leaving at the top. Thus the money collected during the first 10 to 15 years is free money. You can walk away with it.
look like every one with a job workers for government and want there pension
It is hard to be sympathetic when you have worked hard all your life and have saved and invested and have never had a pension. Amazing people believe this fantasy of employer funding your pension and politicians making promises that cannot be Relied on.
Doug Moore
"amazing"!!!?
It's their modus operandi shakedown sanctioned by the state level upon level upon level. the ONLY way to get up out from under their racket is to move to an unincorporated area. Or BURN the municipalities' charters and disassemble their hierarchies. BYE BYE mayors, BYE BYE city councils, BYE BYE to all government "unions"!!!
Anyone that thinks they need these entities can offer a "decent" living wage that matches their so called talents. AND Let Them Figure Out How To Plan For Their OWN Retirement JUST LIKE THE REST OF US.
- ATLAS SHRUGGED -
How can a government or business know the market in future to pay benefits. All they can do is pay you to safe for yourself based on reality at the tome
Plus as a white male, you were discriminated against all your life and could not get a government job. Equal opportunity employment = discrimination against white males.
@@thomaspick4123 Give me a break, plenty of white guys in government positions. I acknowledge there are circumstances where white male is at disadvantage, but I can find the opposite cases where black guys are discriminated against too.
None of my or my wallets business!
Cite PAT LITTLE
Sounds like a democrat union problem to me.