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Good News: SDCERS Discussing Lowering Interest Rate on DROP Account
JF, I meant to add that if you calculate your numbers to age 68 instead of 78 (to account for projected shorter life span) you end up with $1,148,400 (no DROP) vs $1289687 (DROP) which is a not unsubstantial 12.3% increase. I just looked up stats that claimed 74.4 for American males and 66 for police officers with more than 10 years experience. Those numbers would make the DROP cost even higher.— October 22, 2008 10:02 p.m.
Good News: SDCERS Discussing Lowering Interest Rate on DROP Account
JF said: "However on average, SDCERS will make even more money on the DROP money left on deposit." I'm not sure how you can make such a claim. The numbers I saw showed the pension under performing the 8%$ assumption by about 1.5% per year on average from 1999 through 2005, and with recent events most (if not all) of the gains for the last two years have been completely wiped out. The figure of near 3% proposed by Sheffler is a pretty clear indication of just how out of whack the guaranteed 8% is. As for DROP, I used the life expectancy of an average American and a civilian retirement age, so I should have used the MEA multiple of 2.5%. You used the police retirement age, but the justification for that age is a much shorter life span, so you would have to account for that and shorten your window 5 to 10 years. In general I agree with you that the DROP program is not that big a deal in the big picture of the overall pension. To me, the fact that police and fire are well compensated in their salary in the first place, get tons of paid overtime and can retire at age 50 with up to 90% of their salary is a real problem. I don't care what other agencies make, because they are all broke as well. That rate is not sustainable, and has crippled our city. In my opinion, the multipliers for all categories should be dropped 0.5% across the board, and the retirement age for police and fire should be raised 5 years. Of course that is only half the equation. Idiot elected officials spending money we don't have on political conventions, sports teams and handouts to developers is the other half.— October 22, 2008 9:52 p.m.
Good News: SDCERS Discussing Lowering Interest Rate on DROP Account
JF, Simple scenarios using your 3% multiplier and an average life expectancy of 78 (with apologies to Don!): Scenario 1: Enter drop at 60 with 35 years service at $100K at age 78 you have been payed $100K * (35years*3%) * 5 at 8% = 642922.49 (drop money) plus 105 * 13 = $1.365 million for a total of $2,007,922 Scenario 2: Retire at 65 with 40 years service at $116K (assuming 3% per year cola) $116K*(40years*3%)*13 = $1,809,600 million paid at age 78 Question: Which is more, $2,007,922 million (with DROP) or $1,809,600 million (without DROP)? (Hopefully my math is correct!)— October 22, 2008 6:57 p.m.
Good News: SDCERS Discussing Lowering Interest Rate on DROP Account
Don, Response to #16: I realize many would not invest prudently, that is why I said I would still prefer it even if I had little or even no control and it was invested in something as safe as insured CDs.— October 22, 2008 6:40 p.m.
Good News: SDCERS Discussing Lowering Interest Rate on DROP Account
Response to post #5 & #9: The simplest way to look at it is that if it wasn't a benefit to the employee, then they wouldn't voluntarily be entering the system. Don, I have never understood how pensions with a fixed payout are allowed in the first place. We shouldn't be having discussions over multipliers, and whether safety should be higher because of shorter life expectancy and whether someone has worked enough years to qualify and whether you can buy years of service. If they just took the city's contribution and the employees contribution and invest it however they invest it, upon retirement the employee has the amount they have based on actual contributions, no more and no less. If you work 1 year, you have 1 years worth. If you die young, your heirs are entitled to the balance. It should be the equivalent of a forced 401K, with the exception that some safety and balance should be built in to the investments (exactly like SS should be). That is my dream world, which I understand is much to simple to allow for the massive fraud required by big governments, so it will never happen. I am now 20 years into my career and I would still today be willing to forgo Social Security completely if they would allow me to put my half and my employers half (minus whatever amount is actually a tax for social programs, which I would like to see itemized) into my own personal account for retirement. I am not even talking about being self-directed and invested in stocks. I would still prefer my own account even if it was 100% insured CDs.— October 22, 2008 8:44 a.m.
Ben Bernanke, Henry Paulson prepare for bank bailout
Don, The comment about the censors was paraphrased from Snopes. I was much too young to be watching Carson at the time, and don't know anything about the censors then. It sounded like it was largely self-censorship to avoid the government censors. From Snopes: "The Tonight Show was never broadcast live during the Carson years; it was always taped earlier in the evening, providing both the producers and the network's Standards and Practices group opportunity to excise any potentially offensive material from each episode before its late-evening airing. The legend predates the Tonight Show's May 1972 move from New York to Los Angeles, a time when even the word "damn" would probably have been bleeped, never mind the rest of the remark. It is exceedingly unlikely that either Zsa Zsa's set-up line or Johnny's legendary response would have been aired with just a word or two bleeped; if either had truly been uttered, the whole exchange would have been cut from the show. It hadn't been that long since Carson's predecessor on the Tonight Show, Jack Paar, once walked off the show in protest (and stayed away for a month) when NBC cut one of his jokes simply because it referenced the initials W.C. (an abbreviation for "water closet")." As to your Bond movie reference, there was a mention in another Reader article just last week, of the Dr. Strangelove Peter Sellers character named president Merkin Muffley. That nanme slid right past me until I learned what it meant. That one is pretty far over the top.— October 16, 2008 10:11 a.m.
Ben Bernanke, Henry Paulson prepare for bank bailout
FYI: According to Snopes.com (a pretty good source for these things): "The apocryphal Tonight Show incident with Zsa Zsa Gabor and her cat is a wellspring for one of the greatest "manufactured memories" in modern popular culture. No matter how many millions of people swear they were watching the Tonight Show when the above-quoted exchange took place, it simply didn't happen." The censors at the time would never have allowed it to air, and Zsa Zsa was on the show many times after it supposedly happend. It also has been attributed to many other starlets, including Anne Margaret and Raquel Welsh, a common sign of an urban myth. Also from Snopes.com: "Consider the following exchange between Johnny and Jane Fonda during a 1989 Tonight Show appearance: Fonda: I gotta ask you something. Carson: Sure. Fonda: Last night, my son... you know, you were talking about Zsa Zsa Gabor earlier ... Carson: Yeah, I think everyone's talking about her [ed. note: because she had recently been jailed for slapping a policeman]. Fonda: My son said ... "You know, she was on the Johnny Carson Show one time. She came there with a cat on her lap, and she said to you, 'Do you want to pet my pussy?'" [Audience laughter.] Fonda: And my son said that you said, uh, "I'd love to if you'd remove that damn cat!" [Prolonged laughter and applause.] Fonda: Is it true? Carson: [Shaking his head] I ... I tell you, I ... Fonda: Is it true? Carson: No, I think I would recall that. During this exchange, Johnny genuinely looks surprised, as if he'd never heard the story before."— October 16, 2008 9:23 a.m.
Is Socialism Seductive? Or Was Today's Huge Rally More of a Technical Bounce?
To answer my own post #7: It appears that Countrywide was able to buy lots of different pieces as subsidiaries, and then essentially cherry pick which regulatory body would oversee (or not oversee) each individual piece of their business. They then move different types of business to a subsidiary that will have the least regulation and the most opportunity for fraud in that particular area. Can we put Mozilo in jail already?— October 14, 2008 9:30 a.m.
Is Socialism Seductive? Or Was Today's Huge Rally More of a Technical Bounce?
Don (or anybody else who may know), I keep reading experts say that states can't sue WAMU because they are an FSB and chartered by the OTS, whereas Countrywide was state chartered. I keep hearing this, even though Countrywide petitioned the feds in December of 2006 to become an FSB regulated by the OTS, and their application was granted in early March of 2007. What am I missing here that is obvious to all these experts (Including AG Brown and Jan Goldsmith, who have each criticized Aguirre and each said the state couldn't sue WAMU like they could Countrywide)? Here is a link to the Office of Thrift Supervision announcement of the approval of Countrywide becoming an FSB regulated by the OTS: http://files.ots.treas.gov/777014.html— October 13, 2008 9:07 p.m.
Is Socialism Seductive? Or Was Today's Huge Rally More of a Technical Bounce?
"They failed and it closed. Now we are trusting the economy of our country to a pack of nitwits who couldn't make money running a whore house and selling booze? Whew!!" The full story is even funnier. After seizing it and failing in running it, the government sold it to a company that turned out to be a front for the very guy they seized it from in the first place, who was on the lam in South America. The government then took it back a second time, and ended up selling it on Ebay for only $145,100. The government couldn't run it, twice, and got ripped off selling it, twice.— October 13, 2008 5:32 p.m.