Friday, June 10, 2011

The Pension Problem

Maybe this is me reading those doom and gloom sites that I talked about a while back, but I think that the US has a pension problem on every level of government.  Check out this article here:

http://www.bloomberg.com/news/2011-06-10/california-cities-carry-out-pension-changes-while-brown-still-negotiating.html

The cliff notes version of this is that the city of Brea just negotiated with it's unions to slash future pension payouts to it's employees while also forcing current employees to pay as much as 4.5% of their salaries into the pension fund.  What that means is that if you want to work for the city of Brea you are going to get less of a pension and pay more for it.  I suppose people will put up with that as long as they have no other choice.  Sounds like a pretty lousy deal to me though.  I guarantee you there are a lot of city employees out there shining up their resumes on company time.  I know I would be. 

What it comes down to is that unions have taken over the state and bullied state and local governments into giving them more and more benefits that can not be funded without some kind of tax increase.  It looks like Brea and many other California cities are starting by taxing their own employees.  I doubt that is going to solve the problem.

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