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Study: county pension benefits soar

I was in the pension benefit and administration business years ago. Many small businesses had good intentions with setting up their pension plans. The defined benefit plans were usually adopted by doctors groups, lawyers, architects, engineers and other high income earners in private practice. Sometimes these entities had trouble honoring the pension benefit and would file for relief and turn the pension over to the Pension Benefit Guaranty Corporation. Many of the defined benefit plans we designed were for “late savers,” individuals who only began making serious money in their 50’s or 60’s. We could design plans that legally allowed them to sock away as much as 70% of their annual income and reduce their taxes substantially. For these individuals, many of their “personal needs” were already satisfied with business deductions; leased car, travel and entertainment, and other allowances. The thing is, these individuals worked hard to build their businesses or practice and did not have an unlimited source of funds or ability to impose taxes. It has always struck me that public pensions are a recipe for disaster. They are not just a defined benefit plan, but a public defined benefit pension plan with looser regulations than private plans. The unions bargain and fight to keep adding various perks and benefits to these plans. When the money comes up short, rather than look for expenses to cut, they push for tax hikes. We are now at a stage where they not only raise taxes and coming up with new fees, but are also cutting services substantially without any reasonable debate about the mess that the public pensions are becoming. It takes a lot of problems and long term mismanagement to make a municipality file bankruptcy, but every time they have it has always been about pension obligations.
— July 29, 2018 12:02 p.m.

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