Las Vegas Review Journal Lies About PERS – - Again!
The LVRJ posted an editorial about the PERS plan referred to the Segal report about changing from a Defined Benefit (DB) to Defined contribution (DC) pension system. They acknowledged some things such as the cost to convert from one plan to another but focused on the amount of pension public employees would get upon retiring and the politics of the debate. I am certain they were expecting the report to say a defined contribution was required to solve our budget problems.
So, it is not surprising they did not provide a link to the report so people can read for themselves. But then, the LVRJ relies on ignorance and lies and use them to “support” their position. Here is the link to the 21 page report.
These are a few things they “forgot” to mention about the report:
Nevada public employees do not get social security and rely on PERS.
Comment: Those in the private sector rely on Social security so why is it a bad thing for state employees to rely on PERS? Private sector employees can contribute to an IRA plus have Social Security.
Contributions to PERS is much higher than those who contribute to Social Security so benefits are different.
Comment: PERS contributions are over 40 percent higher than for a Social Security participant. Maybe private sector employees need to contribute more to make their system solvent.
The unfunded liability and its consequences have been magnified and the report addresses this accurately.
Comment: Right now PERS is addressing this and will resolve it in a reasonable time.
A DC plan makes it harder to keep experienced employees unlike DB plan.
Comment: Retaining employees is less expensive and turnover rates increase costs.
In a DC plan, the employee assumes all the risk and they must manage their account to ensure they have enough money when they retire.
Comment: Private sector employees with Social Security, a defined benefit plan, do not have this problem.
A DC plan does not provide for cost of living while Social Security and PERS do.
Comment: Why should PERS recipients be different from those on Social Security?
Three states switched to a DC plan but because it did not work out, two switched back to DB.
Comment: This shows there are significant problems with DC plans.
Public employees in general, make 11 to 12 percent less salary than private sector employees and when you factor in all benefits , they make 6.8 to 7.4 percent less.
Comment: The LVRJ, local chambers of commerce and others need to stop whining about how much public employees are paid. It is too simple to say state employees make more than private sector employees. “Forgetting” about experience, education and training is lying and deceiving.
NOTE: Nevada State employees make 20 to 30 percent less than local government employees and their average salary is about $44,000. About 59 percent make less than $50,000 with 21 percent making less than $25,000 a year.
Also check out my earlier posts:
“State Employee Pension System Is Paid For and Financially Well“, August 3, 2010
”The Truth: State Employee Wages Very Low”, September 17, 2010.
“Retirement Plans Made Simple“, November 28, 2010
“Pension Liability Dishonesty“, October 11, 2010
“More Partisan Nonsense about PERS“, September 8, 2010