Quoted from Patches

Now for the consideration of themselves.....greedy little bunch......

Quoted from Patches

prioities, priorities

SAFETY SENIORS PARKS

just say" they" win.....who will laugh last.....you will have a ton of people up in arms and demonstrating against

INCREASES in taxes for the enjoyment of a few ....

Used to be that the Dems were respected for their consideration of the people

Now for the consideration of themselves.....greedy little bunch......

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Looking Twice at Pension Double-Dipping

Should full pensions be allowed if you keep working?

BY: Girard Miller | December 17, 2009





Girard Miller
Girard Miller is the Public Money columnist for GOVERNING and a senior strategist at the PFM Group.










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Commented May 31, 2011

You obviously did not enter the US military 30 years ago. They told us (I joined in 1963) we would ...

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Recent news coverage in USA Today highlighted the public-sector practice of "double dipping" -- receiving pension benefits intended for retirement purposes while drawing a salary with another employer (or in some cases, the same employer).

Pension watchdogs loathe double-dippers, and progressive reformers are now wondering whether something is indeed wrong when retirement benefits are paid to employees who are obviously capable of earning an income. Critics say the practice is akin to doling out farm subsidies for big, successful farmers who are already making good money.

Most notorious are senior management employees, police and fire chiefs, and others who draw six-figure pensions before age 60, and then work for another employer at the six-figure level. Some states are considering legislation to curb what are perceived as abuses.

There are several sides to this issue, and I'll try to provide an objective analysis and provoke a thoughtful debate to encourage suitable and sensible reforms. For starters, I'll suggest that with a few notable exceptions - such as the former California administrator who manipulated his way to a $500,000 lifetime pension - most public employees have earned a right to a decent and modest public pension that assures them a secure retirement. If they work part-time in a second career after toiling for 30 years at $50,000 or less, I have no issue with their work ethic and their right to supplemental income to pay for travel or a new car. That's not what this column is about, however. We're focused here on the highly visible double-dippers who game the system to collect big money from a system that never intended to create pension millionaires and pension aristocrats at taxpayer expense.

Replacement income vs. deferred compensation. Pensions were intended to provide retirement security, not pre-retirement wealth. To provide security, they should provide replacement income in retirement. Replacement income is not dual income. Pensions were not designed to be "deferred compensation" as some would argue. IRS codes provide plenty of arrangements for deferred compensation, including 457 plans common in the public sector which limit the annual contributions and thus the total accumulations that can be withdrawn later. That said, there are some parallels to consider when evaluating the double-dip phenomenon. We should always think about how we would feel if a corporate employee with a 401(k) plan begins to withdraw retirement plan assets while working for another employer. If the net financial result is the same for a double-dipper, then the problem is not with the pension system. Conversely, if a pension recipient receives benefits unavailable through a defined contribution plan, including tax preferences, then suspicions should arise.

A lack of self-awareness. Most public employees feel that they have earned their pensions, but many seem to be unaware of how much earlier they are able to receive substantial benefits than their counterparts in the private sector. It is their entitlement to pre-retirement income that is disputed by the watchdogs. Many of the early "retirees" who double-dip clearly view their pension as deferred compensation and pre-retirement income, not retirement security. They also tend to overlook the gamesmanship that transpires in the pubic pension arena, where workers can transfer service credits from one employer to another and parlay benefits that could never be attained in the corporate world. Portability is one thing; triple-dipping is another.

Double-dipping would be much less frequent if public employees were required to work until Medicare or Social Security age before retiring -- unless they take an actuarial reduction in their pension, just like early retirees under Social Security. Such a system would impose a financial penalty on early retirees which would also reduce the costs of funding the system properly. Then, an employee could supplement her reduced pension with outside income from a second career or a job with a new employer.

Unfortunately, it is difficult to impose such requirements on incumbent employees who view their pension benefits as property rights. Some states have laws making their benefits irreversible once they are vested. However, there are other ways for legislatures to skin this cat, including an excise tax on double-dippers, as I'll discuss below.

For retirees who have reached Medicare and Social Security age, the double-dipping issues are less prevalent. Historically, most workers quit laboring at that point. However, there are new issues that we as a society must face as Baby Boomers reject their parents' shuffleboard retirement paradigm and seek relevance in our society by working in a second career. In most cases, they will downshift to lower-compensated work that gives them personal satisfaction and a sense of involvement with lower stress. What we need to think through is whether the pension should be adjusted in such instances.

Tax the double-dippers? Financially strapped states could impose an excise tax or an income surtax on double-dip income, which would be one way to restore funds to the pension system. For example, states could collect a 15 to 25 percent surtax on income received while earning more than 50 percent of the annual pension, or a similar surtax if combined pension and earned income exceeds the employee's previous five years' average income. The latter arrangement would also address excessive pension ratios.

Low-income retirees and those older than 66 should be exempted, of course. I would prefer to see the tax revenues returned to the pension systems, especially if they are significantly underfunded. This would be an example of a tax that produces in insignificant statewide revenue, but serves as an equalizer for public policy purposes.

Federal law imposes a 15 percent surtax on early distributions before age 59 1/2 in qualified defined contribution plans. I'd say that what is good for the goose is good for the gander and that a similar tax should apply to early pension payments that are not actuarially reduced or reflective of a 30-year career. An excise tax on premature pension distributions could be triggered by excessive supplemental employment earnings prior to Social Security age (for state taxes) and age 59 1/2 for federal taxpayers.

Presently, 10 states do not tax public employee pensions, and some of them will be forced to consider pension income taxes as revenue-raising measures -- including Michigan, which offers the biggest loopholes. I won't be surprised to see legislators and pension watchdogs in several of these states take a hard look at the double-dipping issue when the general tax policy for pension income is reviewed.

Allow a benefit-bump instead. An alternative approach to mitigating the double-dipper syndrome is to reduce pensioners' benefits while they receive outside income, and then permit them to receive a bonus payment later in the form of an increased annuity. The Social Security system has figured this out, so why haven't pension funds? For example, a pensioner entitled to a $40,000 benefit while working a second job could receive $20,000 in a reduced pension while still working, and then receive a pension greater than $40,000 after leaving the workforce altogether. The increased life pension after age 66 would be approximately one-fifteenth of the reduction taken each year, so in this example, a three-year pension reduction of $20,000 annually for double-dipping before age 66 would entitle the her to a subsequent increase of $4,000 annually for life -- thus an enriched $44,000 pension thereafter.

If faced with an excise tax, double-dippers could elect this reconfiguration of their pensions, minimize taxes, and still come out equal actuarially. Some may actually prefer this arrangement because of high marginal federal tax rates on their combined income while they work the second job. In fact, there may be other ordinary pensioners who would prefer to elect a deferral arrangement, which might even include enhanced spousal survival benefits if properly designed by the actuaries. Obviously IRS codes or letter opinions may need adjustment to enable such flexibility, but that will become increasingly necessary as Baby Boomers adopt alternative lifestyles in their retirement years.

We need creative solutions, not finger-pointing. I don't purport to have all the answers here, but our lawmakers and taxing authorities need to address these thorny problems. For starters, we obviously need to raise the regular retirement ages for public pension plans to align them with Social Security, which would eliminate most of the double-dipping. Other reforms such as those suggested above would eliminate the remaining abuses by incumbent employees whose benefits formulas are untouchable. Otherwise public confidence in the public-sector retirement system will continue to erode and future employees will bear the brunt of the punishment for the sins of their predecessors.



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Quoted from 1630

Senders, you make no sense and should go away.....just shut up..no one takes you seriously.

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States Enlist Employers To Pay Back Federal Loans



BY: Dylan Scott | October 4, 2011













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State Unemployment Rates and Statistics


The bill for states to pay back federal assistance for unemployment benefits is due, and states are turning to employers to foot the tab, the Associated Press reports. In total, just over half the states owe the federal government about $38 billion, and the first interest payments on those loans were due on Friday, totaling just over $1 billion.

According to the AP, most states charged employers a one-time assessment to cover the payment. In addition, employers in those states will pay on average about $21 in federal taxes next year to pay back the loans; at the same time, state taxes are increasing because more people have applied for unemployment insurance during the recession.

One New Jersey employer told the AP he would probably pay about $24,000 in additional taxes this year. "The problem is I can't grow my sales fast enough or raise my prices fast enough to make up for that additional expense," he said.

As part of the 2009 stimulus package, the federal government delayed interest payments on federal loans for two years, but those bills are now coming due. According to the AP, the federal government is charging states a 4 percent interest rate on the loans.

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Message from Comptroller Thomas P. DiNapoli

In July 2000, the Retirement System was at the forefront of a successful effort to enact a law providing an annual cost-of-living adjustment (COLA) for retirees.

A COLA payment is a change, based on the cost-of-living index, that permanently increases your retirement benefit. It is designed to address inflation as it occurs. Once you become eligible and receive your first COLA payment, subsequent COLA adjustments will continue automatically each September.

We hope this brochure makes COLA easier for you to understand. If you have any questions, please feel free to contact our Call Center.

Sincerely, Thomas P. DiNapoliState Comptroller

What is COLA?

COLA stands for cost-of-living adjustment. A COLA payment is an adjustment, based on the cost-of-living index, that will permanently increase the retirement benefit you receive from the New York State and Local Retirement System. Once you become eligible and the payments begin, they will continue automatically each September.

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How is COLA calculated?

COLA payments are based on the rate of inflation and the consumer price index published by the U.S. Bureau of Labor Statistics. The law requires that COLA payments be calculated based on 50 percent of the annual rate of inflation, measured at the end of the fiscal year (on March 31st). In addition, the COLA cannot be less than 1 percent or greater than 3 percent of your pension.

Another provision of the law requires that the COLA be calculated based on the first $18,000 of your annual Single Life Allowance amount, even if you have selected a different option.

For example, assume the inflation rate from March 2003 to March 2004 was 1.6 percent. Fifty percent of this would be 0.8 percent. However, the law states that COLA payments must be a minimum of 1 percent. Therefore, the COLA payment in this example would be 1 percent. So, if your pension is $12,000 a year, it would increase by $120 a year. If your pension is $25,000, it would increase by $180, representing 1 percent of the first $18,000 of your Single Life Allowance.

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Why is the Single Life Allowance payment option used?

As you may recall, when you retired, you were given various options for how your retirement benefit could be paid to you. All of the options provide you with a monthly benefit for life, but the Single Life Allowance option provides the highest pension. However, under Single Life, no payments are made to beneficiaries after you die. In exchange for providing for your beneficiaries upon your death, all of the other options reduce your benefit.

Therefore, calculating your COLA as if you had chosen the Single Life Allowance guarantees you the highest amount possible, since this option offers the highest benefit. If your retirement benefit is less than $18,000 annually under the Single Life Allowance, the calculation is based on that amount.

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Who is eligible?

In order to receive your COLA, you must be:
•Age 62 or older and retired for five or more years; or
•Age 55 or older and retired for ten or more years for uniformed employees such as police officers, firefighters and correction officers; or
•Receiving a disability pension from the Retirement System for five or more years, regardless of age.

There are two other situations where someone may be eligible for COLA:
•A beneficiary receiving the accidental death benefit for five or more years on behalf of a deceased Employees’ Retirement System member; or
•The spouse of a deceased retiree receiving a lifetime allowance (under an option elected by the retiree at retirement) is entitled to one-half the COLA amount that would have been paid to the retiree when he or she would have met the eligibility criteria.

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This page is designed to help you with a variety of tax-related questions and issues. Please choose from the list of options below.
•Tax Services — Frequently Asked Questions
•Request a copy of your last year’s 1099R form
•Print a blank W-4P form to change your federal income tax withholding. Once you have printed the form, complete, sign, and mail it to the Retirement System (you can find the address on the contact us page).
•Federal Tax Withholding Calculator has been updated to reflect changes to the federal tax tables. (IMPORTANT: This tax calculator should be used only for a preliminary estimate of the amount of federal tax you should have withheld from your monthly pension benefit. Your actual federal tax liability is based on many factors, including all the income you report on your federal tax return, not only the amount of pension benefit you receive from this System. You should consult with your tax preparer or the Internal Revenue Service to ensure that you are having a sufficient amount withheld to cover your federal tax liability. This Withholding Tax Calculation only identifies the amount of federal tax to have withheld from your pension as no benefit paid from this System is subject to the tax of the State of New York or its municipalities.)

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Correctly reporting the number of days worked during a reporting period helps ensure the benefits your employees receive are accurate. But, since elected and appointed officials usually do not work a fixed schedule or have preset hours, determining the number of days they’ve worked requires a different process.

A regulation on reporting elected and appointed officials , which more clearly defines the reporting process, became effective August 12, 2009. The regulation adds additional requirements for both employers and elected and appointed officials. Among the changes are an expanded record of work activities, a more detailed resolution and specific time frames within which requirements must be completed. This section of our presentation describes the method of properly calculating the number of days to report for elected and appointed officials and how it differs from the previous process.

The regulation applies to new terms of office or appointments beginning on or after August 12, 2009.

If you have questions about reporting elected and appointed officials now or in the future, or if you’d like assistance preparing your monthly reports, you can email our Member & Employer Services Bureau.

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1.Should I be concerned about the security of my pension because of the recent economic crisis?

The Common Retirement Fund remains safe and secure. In fact, the State of New York continues to have one of the best-funded public pension systems in the United States and the Fund remains fully able to meet our obligations to all its retirees and beneficiaries. The Fund remains strong because of our diversified investment strategy and long-term approach. In addition, the New York State Constitution guarantees your pension will not be diminished. You can be assured that you will receive your pension for your lifetime.