First of all, my disclaimer. I am a government employee.
I hope that someone can answer my questions and clear up my thoughts. We hear about government pensions being underfunded.
When these pension plans are calculated, why aren’t the long term costs revealed during contract negotiations?
Why shouldn’t the agency that employed the employee be responsible for the full retirement costs (and any makeup expenses) than expecting the retirement fund to make it up? Some agencies promise full retirement medical, and others don’t. Why is that? How come one agency can “afford” that expense, while another can’t?
What brings this up? Well, the huge salaries at the city of Bell. Who is really going to pay for those pension benefits? I doubt that Bell will be (But I could be wrong). I believe that the agency that allowed the salary should be responsible for the pension. If they cannot fully fund it, then that agency should be held responsible.
Part of the ongoing financial crisis that we are facing within the government is the failure to actually calculate the long term costs of retirement benefits upfront. Maybe if agencies knew that they would have to cover any shortages (based upon what was promised to the employee) instead of relying on the taxpayer to make it up (Yes, I know, the taxpayer makes it up either way, but I’m talking about more fiscal responsibility). Yes, I know that there are many factors and variables involved, but I’m sure the actuaries can give us a very reliable estimate.