If the consequences weren’t as serious as they are it would indeed be amusing to watch the two Bob’s, both of whom along with their immediate family are or soon will be slurping down taxpayer funded defined benefits pensions, accuse each other as being the less responsible regarding the defined benefits pensions that are hanging over the heads of Port Orange taxpayers like the sword of Damocles.
At the risk of the Bob’s accusing me of being less than enthusiastic about the prosperity that must see breaking out all around us and dampening their desire to place the ‘Port Orange Pension Issue’ firmly between the covers of the unicorn coloring book let me point out that:
- union members didn’t so much ‘slash their own benefits’ as they slashed the benefits of new hires, AND it is yet to be seen if those new hires will continue to accept these reduced benefits when their numbers control these unions.
- funded ratios within these plans are based on an all time high stock market valuations that are being propped up by Fed stimulus, illusory accounting, and massive deficit spending,
- IN A domestic economy with negative 1st quarter GDP growth, falling productivity and consumer spending, and a labor force participation rate stuck at a 35 year low, with what jobs that are being created in low paying sectors,
- AGAINST A back drop where our traditional ally the Europeans have just imposed negative interest rates in an effort to stimulate their economies, and that is likely to be just about as successful as administering medicine to the dead,
- AND WHERE OUR traditional enemies Russia and China are intent on dumping the dollar for international settlement purposes.
NOTHING COULD POSSIBLY GO WRONG HERE …. BREAK OUT THE CRAYONS.
A history of ever increasing cost of future benefits that are themselves based on indeterminate future events prompted the private sector, where taxation is not an option, to abandon defined benefit plans decades ago.
The time is long overdue for responsible elected representatives in Port Orange to no longer tolerate 70 year residents bagging groceries at Walmart & Publix to pay the property taxes required to fund retirement and double dipping of 50 year olds.
They need to call for defined contribution plans not to punish City employees but rather to place them on the same playing field as private sector employees, and in so doing REMOVE THE UNFAIR OBLIGATION CURRENTLY ASKED OF PROPERTY OWNERS WHICH IS TO GUARANTEE THE ECONOMIC FUTURE OF CITY EMPLOYEES IN A WORLD WHERE THEIRS IS NOT.
And before my naysayer friends in the Fire department start with their ‘ there goes Ted wanting to screw us, tell me in logical terms why I would want to do that ? How would I benefit ? The answer is I don’t and I wouldn’t.
BUT there is a way I would and that is if your pension dollars were better invested and some of you morphed into businessmen with a commercial stake in the community and joined me on Tuesday evenings complaining about the bone head decisions our Council makes more often than not.
As we speak the value of the Fire Plan is approximately $ 30 million. That would buy 3 Apartment complexes the approximate size of The Park at Countryside on Dunlawton and I would bet my last dollar that such an investment run by your business manager right here in Port Orange where you can keep an eye on your investment would provide greater returns and security than the overpriced stock market in which you plan is currently invested and over which no one has any control.
If I were King of this plan for a day I would settle the un-funded claim with the City in exchange for complete control over its investments and a $15,000 per member per year contribution for 15 years plus 15% of salary in annual contributions to plan members.
The Plan would be better off and so would the taxpayers your members serve on a daily basis.
The day will come when the market will crash and perhaps take years to rebound. When that day comes the only plan I have ever heard from Dennis, Drew, Scott and the Bob’s would be to try and raise taxes enough to offset those losses.
That is a bet I would encourage plan members to try and avoid, preferring instead to bet on the private sector investment that has provided everything we enjoy in this great land of ours.