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What's wrong with labor unions?
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<blockquote data-quote="frozen-ace" data-source="post: 1200322" data-attributes="member: 10631"><p>It’s not that high. </p><p></p><p>In most districts wages and benefits make up about 80% of the education spending. The remaining 20% is for everything else.</p><p></p><p>That 80% is roughly split evenly between wages and benefits-> so depending on the place 40% of education spending is on wages and 40% is on benefits.</p><p></p><p>On the benefits piece health insurance is usually more than the pension. Health insurance costs have risen dramatically in the last decade while pension costs have for the most part remained constant.</p><p></p><p>So to recap-</p><p>Wages 40%</p><p>Health insurance 25%</p><p>Pension and other benefits 15%</p><p>Everything else 20%</p><p></p><p>Many of the states used to have great defined benefit plans. These are the plans that promise / guarantee a fixed payment for life. There is also a spousal survivor benefit (depends on the plan but can be something around 50% or 75% or 80%- for life). To do the spousal survivor benefit your pension gets reduced by a certain amount but it guarantees your spouse that your pension payments will transfer to them upon your death for the rest of their life. These old plans are bankrupting the states that had them and still have them as members in these old plans are starting to retire.</p><p></p><p>The states that have moved to defined contribution plans will not have this issue 100 years from now (its similar to a 401k), but they still have to deal with the old people who got in on the old plans.</p><p></p><p>The people on the defined benefit plans have about 30-40 more years until they are all deceased. Then you have to calculate the spouse survivor benefit- so let’s say you have the guy in the defined benefit plan who retires today at 50, goes 30 years and when he turns 80 decides to marry a 20 year old bar girl from the Philippines and then pass away. She will now get the spouse survivor benefit for the rest of her life (another 80 years). That’s 110 years for this pension to pay out, and maybe the teacher only worked for 20 years. Think about that- you were lucky enough to get in to the old plan while it existed, you did your time and worked 20 years and retired, and now there is a potential for 110 years of GUARANTEED monthly payments. The true cost of these plans will not be complete until both the participant and the spouse are deceased. </p><p></p><p>Some of these old plans also offer full health insurance. Once someone gets into their 70s and 80s the health care costs far exceed the pension payments. Major heart surgeries and hip surgeries can cost more than all of the actual lifetime pension payments combined.</p></blockquote><p></p>
[QUOTE="frozen-ace, post: 1200322, member: 10631"] It’s not that high. In most districts wages and benefits make up about 80% of the education spending. The remaining 20% is for everything else. That 80% is roughly split evenly between wages and benefits-> so depending on the place 40% of education spending is on wages and 40% is on benefits. On the benefits piece health insurance is usually more than the pension. Health insurance costs have risen dramatically in the last decade while pension costs have for the most part remained constant. So to recap- Wages 40% Health insurance 25% Pension and other benefits 15% Everything else 20% Many of the states used to have great defined benefit plans. These are the plans that promise / guarantee a fixed payment for life. There is also a spousal survivor benefit (depends on the plan but can be something around 50% or 75% or 80%- for life). To do the spousal survivor benefit your pension gets reduced by a certain amount but it guarantees your spouse that your pension payments will transfer to them upon your death for the rest of their life. These old plans are bankrupting the states that had them and still have them as members in these old plans are starting to retire. The states that have moved to defined contribution plans will not have this issue 100 years from now (its similar to a 401k), but they still have to deal with the old people who got in on the old plans. The people on the defined benefit plans have about 30-40 more years until they are all deceased. Then you have to calculate the spouse survivor benefit- so let’s say you have the guy in the defined benefit plan who retires today at 50, goes 30 years and when he turns 80 decides to marry a 20 year old bar girl from the Philippines and then pass away. She will now get the spouse survivor benefit for the rest of her life (another 80 years). That’s 110 years for this pension to pay out, and maybe the teacher only worked for 20 years. Think about that- you were lucky enough to get in to the old plan while it existed, you did your time and worked 20 years and retired, and now there is a potential for 110 years of GUARANTEED monthly payments. The true cost of these plans will not be complete until both the participant and the spouse are deceased. Some of these old plans also offer full health insurance. Once someone gets into their 70s and 80s the health care costs far exceed the pension payments. Major heart surgeries and hip surgeries can cost more than all of the actual lifetime pension payments combined. [/QUOTE]
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