Capt. Al Haynes sorta OT.

One of the reasons -- maybe the primary reasons -- states like teachers in
their 50s to retire is that they can be replaced by fresh new teachers
just
out of college at starting salaries much less than those the veterans were
getting. It actually saves the states money.

Hmmm. Not sure I see the math here.

While the state may save, say, half of the older teacher's salary (let's say
my sister was making $45,000 -- so they'll cut it by half in retirement, to
$22.5K) they then have to pay a new teacher what, $25K to start, plus
benefits?

Thus, we've lost a few grand in the mix.

Of course, "retirement pay" comes out of a different bucket of cash in the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...

More typical gubmint accounting, is my hunch.
--
Jay Honeck
Iowa City, IA
Pathfinder N56993
www.AlexisParkInn.com
"Your Aviation Destination"

Jay Honeck wrote:

Of course, "retirement pay" comes out of a different bucket of cash in the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...

Typically, retirement pay doesn't come out of current taxes at all. The employer
sets a certain amount of money aside every year as a retirement account. Typically,
this money is invested in stock and bond accounts and will grow at the rate of
between 5% and 15% a year. Some government and education system pensions are keyed
to the market even after retirement - my mother's pension payments go up and down
with the stock market, and she has not tired of complaining about it for the last
three years.

In any case, salaries and benefits for those still working are paid for out of
tax revenue. This includes payments into the retirement account from which their
pensions will eventually come. Pension payments for retired people are not - they
are paid out of withdrawals from the pension funds. In part, they are pre-paid by
taxes that were paid during their period of employment, but the majority comes
from interest on the account.

George Patterson
Great discoveries are not announced with "Eureka!". What's usually said is
"Hummmmm... That's interesting...."

"G.R. Patterson III" wrote in message ...


Jay Honeck wrote:

Of course, "retirement pay" comes out of a different bucket of cash in the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...

Typically, retirement pay doesn't come out of current taxes at all. The employer
sets a certain amount of money aside every year as a retirement account. ,

Margy pays for her own retirement which gets gratuitously mismanaged for her
by the state and the county. If she expects to get anything, she will be socking
it away in her 403b (the public teacher version of 401k).

FAA ATC has three legs of retirement. The first is your annuity. I'd
have to go and look for sure but if I retire when I am eligible, which
is after 25 years(I'll be 49), I would get about 37-40% of my base
pay.(Actually a high three year average) If I go until I have to retire
at 56 then I would get about 45%. The second leg is social security.
Even though I would be below the SS age I will get the same amount, my
calculations put it at approx $2500 per month to start. The third is
the government version of a 401K. At a 10% average annual return until
I retire, assuming age 56, it will be worth about $1.5 million. I am
putting in the IRS max at current, which will be $13K for 2004.

Ron Natalie wrote:
"G.R. Patterson III" wrote in message ...


Jay Honeck wrote:

Of course, "retirement pay" comes out of a different bucket of cash in the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...

Typically, retirement pay doesn't come out of current taxes at all. The employer
sets a certain amount of money aside every year as a retirement account. ,


Margy pays for her own retirement which gets gratuitously mismanaged for her
by the state and the county. If she expects to get anything, she will be socking
it away in her 403b (the public teacher version of 401k).

"G.R. Patterson III" wrote in message
...


Jay Honeck wrote:

Of course, "retirement pay" comes out of a different bucket of cash in
the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...

Typically, retirement pay doesn't come out of current taxes at all. The
employer
sets a certain amount of money aside every year as a retirement account.
Typically,
this money is invested in stock and bond accounts and will grow at the
rate of
between 5% and 15% a year. Some government and education system pensions
are keyed
to the market even after retirement - my mother's pension payments go up
and down
with the stock market, and she has not tired of complaining about it for
the last
three years.

Government retirement DOES come out of current revenue. They wanted to buy
stocks and bonds, but that would have given government strong control over
corporations. That was Jessie Jackson's idea...to buy up "socially
responsible" companies.



In any case, salaries and benefits for those still working are paid for
out of
tax revenue. This includes payments into the retirement account from which
their
pensions will eventually come. Pension payments for retired people are
not - they
are paid out of withdrawals from the pension funds. In part, they are
pre-paid by
taxes that were paid during their period of employment, but the majority
comes
from interest on the account.

It seems you are using "revenue" and "tax revenue" interchangeably between
private and civil service pension funds. Can you clarify?

Tom Sixkiller wrote:

Government retirement DOES come out of current revenue.

At the Federal level. Teachers are typically State or local employees, and these
pensions are frequently funded by investment in the markets. Although not a teacher,
my mother was an employee of the University of Tennessee. Her pension comes from
the proceeds of stock/bond accounts, and the amount of the monthly payments varies
with the performance of the market. The financial crisis in California has impacted
Tennessee State pensions because a large portion of the funds are invested in
California State bonds.

It seems you are using "revenue" and "tax revenue" interchangeably between
private and civil service pension funds. Can you clarify?

I was speaking exclusively of personal experience with pensions in the education
system. In the systems with which I am familiar, tax revenues fund the salaries
and pension plans of current employees. If the system were to close tomorrow,
retired employees would still receive their pensions - the payments do not come
from taxes being levied today.

George Patterson
Great discoveries are not announced with "Eureka!". What's usually said is
"Hummmmm... That's interesting...."

G.R. Patterson III wrote:

Jay Honeck wrote:

Of course, "retirement pay" comes out of a different bucket of cash in the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...


Typically, retirement pay doesn't come out of current taxes at all. The employer
sets a certain amount of money aside every year as a retirement account. Typically,
this money is invested in stock and bond accounts and will grow at the rate of
between 5% and 15% a year. Some government and education system pensions are keyed
to the market even after retirement - my mother's pension payments go up and down
with the stock market, and she has not tired of complaining about it for the last
three years.

Where does this "certain amount of money" to be set aside every year
come from if note from current tax revenues?


In any case, salaries and benefits for those still working are paid for out of
tax revenue. This includes payments into the retirement account from which their
pensions will eventually come. Pension payments for retired people are not - they
are paid out of withdrawals from the pension funds. In part, they are pre-paid by
taxes that were paid during their period of employment, but the majority comes
from interest on the account.

Not necessarily. Just look at all of the corporations that are now
having to pour hundreds of millions into their pension funds to keep
them solvent.


Matt

"Matthew S. Whiting" wrote:

Where does this "certain amount of money" to be set aside every year
come from if note from current tax revenues?

That comes out of tax revenues. When the employee is working. Retirement pay does
not come out of current tax revenues in the education systems with which I am
familiar.

Not necessarily. Just look at all of the corporations that are now
having to pour hundreds of millions into their pension funds to keep
them solvent.

We were discussing education system pensions. The corporate solvency issue is
primarily caused by the fact that the Federal government changed the requirements
to increase the amount of money that must be retained for each employee in a
standard retirement package plan. Some companies simply reacted by abandoning
these plans for new employees and providing strong incentives (as in "change or
get fired") to current employees to transfer over to what is called a "cash
balance payout" plan. The increased limit requirements were instituted in
reaction to the Enron scam.

George Patterson
Great discoveries are not announced with "Eureka!". What's usually said is
"Hummmmm... That's interesting...."

G.R. Patterson III wrote:

"Matthew S. Whiting" wrote:

Where does this "certain amount of money" to be set aside every year
come from if note from current tax revenues?


That comes out of tax revenues. When the employee is working. Retirement pay does
not come out of current tax revenues in the education systems with which I am
familiar.

It doesn't come out directly, but it still comes from tax revenues. And
if you have more retirees, you have to more heavily fund the pension
fund and that means setting aside more each year into the fund, which
comes from tax revenues. To say that tax revenue doesn't pay the
pensioners is ridiculous.


Not necessarily. Just look at all of the corporations that are now
having to pour hundreds of millions into their pension funds to keep
them solvent.


We were discussing education system pensions. The corporate solvency issue is
primarily caused by the fact that the Federal government changed the requirements
to increase the amount of money that must be retained for each employee in a
standard retirement package plan. Some companies simply reacted by abandoning
these plans for new employees and providing strong incentives (as in "change or
get fired") to current employees to transfer over to what is called a "cash
balance payout" plan. The increased limit requirements were instituted in
reaction to the Enron scam.

I think the larger part was that investment returns dropped well below
the assumptions needed to keep the funds solvent. That has had a huge
impact, at least at my company as was the reason given by top management
for putting in much more money this year and last.

That may also be the reason that Capt. Haynes is not in a good position
financially to help fund his daughters medical care.

Matt

"Jay Honeck" wrote in message
news:JhpJb.727709$Tr4.1877797@attbi_s03...
One of the reasons -- maybe the primary reasons -- states like teachers
in
their 50s to retire is that they can be replaced by fresh new teachers
just
out of college at starting salaries much less than those the veterans
were
getting. It actually saves the states money.

Hmmm. Not sure I see the math here.

While the state may save, say, half of the older teacher's salary (let's
say
my sister was making $45,000 -- so they'll cut it by half in retirement,
to
$22.5K) they then have to pay a new teacher what, $25K to start, plus
benefits?

Thus, we've lost a few grand in the mix.

Of course, "retirement pay" comes out of a different bucket of cash in the
state's budget then "teacher's salary", so ON PAPER they LOOK like they
"saved the taxpayers some money"...

More typical gubmint accounting, is my hunch.

If anyone thinks Enron's accounting was flakey, take a look at government
accounting. Primarily "cash basis", there is no real accounting for
long-term liabilities, only "estimates".

While Social Security is failing fast, the government retirement system
(which is paid out of current revenues) is looking at unfunded liabilities
of $9 to $14 TRILLION.