State pensions

[wolfpack]

yes state pension employees pay more in new york state taxes every year they work than if they were private sector wages. That add back to federal income to arrive at their state taxable for their lifetime is their advance payment for non-taxable pensions in retirement. So if this windfall of monies some of you see is to be fair then it needs to start with that add back being eliminated before there is a taxability. Do the numbers work out evenly? Someone should study it but every person is different and some live longer in retirement. Try beating another dead horse.

[wnyerlaughs]

yes state pension employees pay more in new york state taxes every year they work than if they were private sector wages. That add back to federal income to arrive at their state taxable for their lifetime is their advance payment for non-taxable pensions in retirement. So if this windfall of monies some of you see is to be fair then it needs to start with that add back being eliminated before there is a taxability. Do the numbers work out evenly? Someone should study it but every person is different and some live longer in retirement. Try beating another dead horse.

wolfpack, this horse should be beat in another thread, and perhaps Res can do that for a dual puprose:
1) we dont want to hijack the thread. so lets move the comment elsewhere.
2) simila rto how I have shown the math of NY pensioners not being net taxpayers, and have invited others (namely Linda) to show where the math is wrong, I'd make the same invitation to you, to show SPECIFICALLY what you mean by this :yes state pension employees pay more in new york state taxes every year they work than if they were private sector wages.With all due respect, you're entitled to your opinion, but you're not entitled to your own facts.

For the sake of example: All else being equal re: wages, dependents, etc, NY govt employees do not pay more taxes than a private sector employee. If you are alleging that to be the case, then please show the facts that support it.

3) "So if this windfall of monies some of you see is to be fair then it needs to start with that add back being eliminated before there is a taxability" Show specifically what you mean and the source, because any add back is to figure the FEDERAL income tax liability, not the state. The Pension payments are exempt from STATE income tax, not from Federal.

Show the facts, show the math.

but Res, perhaps move this to another thread, as I'm sure other posters would like to see how NY pensionable employees ALLEGEDLY pay higher NY income taxes than private sector employees (assuming the same level of wages, etc).

A 10 year pensioner at a mere 25k received $250,000 from NY state, 100% exempt from NY Income taxes. ITs a guaranteed winning lottery ticket, 1/4 million dollars. But, please show these pepole pay MORE due to this "add back" issue you're referring to.

4) "someone should study it". Study what? it's right there in the NY Income Tax code. the pensions are exempt from NY income taxes.

5) "their advance payment". Please explain this also. You're suggesting that NY pensionable empoloyees are being pre-paid for something? Please explain.

YEs, i'm highly doubting what youu're saying, so I'm asking you to show me the error of my thinking if that's the case.

However, my ORIGINAL point wasn't about the tax exemption issue but, rather, BP's support of it as being a union deal"With the employer", when the employer is the PEOPLE of the state of NY. ..not politiicans who created the tax exemption for their union buddies and themselves.

dont reply here though...put it in other thread for reference for all to see. ITs only a "dead horse" for govt employees and pensioners who dont want the tax exemption issue discussed or to ever see the light of day in Albany. The more that net taxpayers know about his issue , the better for everyone.

REs, i'm sure you'd like to see the wolfpack facts as well ?

[geo_wny]

Two things, you pay taxes on your pension now while contributing. So you do contribute. Also around 90% of what is paid to NYSTRS members is paid by invenstment earnings and member contributions.

http://www.nystrs.org/

http://www.nystrs.org/main/library/NYSTRS-Dollar.pdf

[Dougles]

yes state pension employees pay more in new york state taxes every year they work than if they were private sector wages. That add back to federal income to arrive at their state taxable for their lifetime is their advance payment for non-taxable pensions in retirement. So if this windfall of monies some of you see is to be fair then it needs to start with that add back being eliminated before there is a taxability. Do the numbers work out evenly? Someone should study it but every person is different and some live longer in retirement. Try beating another dead horse.

I would happilly trade the 3% deducation for 10 years as not taxable (like a 401K) in order to tax the 30+ years of pension (like a 401k)

[wnyerlaughs]

Two things, you pay taxes on your pension now while contributing. So you do contribute. Also around 90% of what is paid to NYSTRS members is paid by invenstment earnings and member contributions.

http://www.nystrs.org/

http://www.nystrs.org/main/library/NYSTRS-Dollar.pdf

- no one said they were not making a contribution however, that contribution is really nothing more than a NON-risked salary deferral, as 100% of the contributions are paid back to the member. however, even 20 years of contributions at 3% of 40k = 1,200 yr x 20 years = mere $24k contribution to a retirement plan, that will pay out , for example, $20k , lets say, for 20 years = $400,000. $400,000 payout, on a $24k salary deferral. Of course, there is compounding and net present value to be considered..but, a $400k payout on a 24k contribution (not an "investment) is like paying $25 for a gift card, then using it 5 years later to find it suddenly has $5,000 on it. That's the gift that keeps on giving.

what's being paid in to the fund was not being questioned, but i'll add that the EMPLOYER (local govts) also contributes, and those funds are from net taxpayers (net taxpayers are the private sector folks, as the govt employyes get all of their taxes back via the pension repayments. yes they do, so they are not net tax PAYERs..but are net tax "receivers). it is what it is.).

What was being questioned is the specifics of the Original posters claims., but also, i've questioned before..the question goes to the payout. The pensioner isn't making an "investment" by defintion. it's a contribution, zero percent at risk. zero. its guaranteed to all be repaid. The fund itself makes the "At risk" investments, but even if the fund does poorly, its the net taxpayers (not the gvot employees) who are put on the hook to make up the difference but, again, that's aside from the questions to the original poster.

Lastly, the payout to the pensioner is not a "Return on investemt" as there was never any "investment" made. Investments carry risk, uncertainty. There is zero uncertainted in a "Defined benefit" payout, which is, literally, "Defined" in the title of the benefit itself.

but thats besides the point.

Questions to original poster was bout the "Add back" comment, Where how and where is a govt employee paying more than private sector employee ? in any way shape or form? and also to clarify the statements made, with supporting references.

Look, even Cuomo knows the pension needs to be reformed, but he knows the unions wont go for it (gee why not?), and the legislators wont have a taste for it either, as they'd be votoed OUT of their own pensions in the next election cycle.

has to be done though. i know dougles knows that also.

[WNYresident]

I would happilly trade the 3% deducation for 10 years as not taxable (like a 401K) in order to tax the 30+ years of pension (like a 401k)

Now you see the burden that is placed on us. They even have us guarantee the funds if they invest money into the stock market. Was your pension guaranteed?

[geo_wny]

I would happilly trade the 3% deducation for 10 years as not taxable (like a 401K) in order to tax the 30+ years of pension (like a 401k)

It is now 3.5% of your salary for the entire time you work. Tier 5

[WNYresident]

It is now 3.5% of your salary for the entire time you work. Tier 5

Why not fund the pension 100% like EVERYONE else does?

[geo_wny]

I am not arguing that the pension is not an investment, and with the additon of the new tier 5 the governments aka taxpayer portion will be reduced by a decent amount, since of the increased time and contribution amounts. I am not even arguing it is a really good deal and that changes need to be made.
But the truth is that roughly 90% of the pension fund is not government funded and that number will increase and NYS was rated to have one the best systems in the entire country, i believe the only one to get an A or A+ rating.

As far as the unions not allowing to change it, ofcourse they will fight for the best deal they can get. Like any negotiation you are going to ask for the sky but ultimately it has to be mutually agreed upon. And that goes with any negotiation. There were alot of unions that took wage freezes and acted responsible and are trying to do the right thing. There are districts that settled contracts with no step increases for the entire 3 year contract along with a bunch of other consessions. So there are teachers and unions trying to do the right thing.

[geo_wny]

Why not fund the pension 100% like EVERYONE else does?

Good questions. But there are alot of companies that match their employee contributions to a certain dolar amount. So i guess there is not "like everyone else" since each employer is different.

[geo_wny]

http://grasshopper.com/blog/2011/12/...h-crazy-perks/

What if we got perks like this? Just saying, in this day and age "just like everyone else" doesn't apply.

[Dougles]

It is now 3.5% of your salary for the entire time you work. Tier 5

3%, not to mention only 3% of current PE workers are Tier 5.

"Under Tier 5, new employees will have to contribute 3 percent of salary toward their pension during the entirety of their employment. (Previously, they only had to contribute for the first 10 years of service.) And employees must work 10 years, not just five, to become eligible to receive a pension. The retirement age rises to 62 for most workers and 57 for teachers."

[WNYresident]

Good questions. But there are alot of companies that match their employee contributions to a certain dolar amount. So i guess there is not "like everyone else" since each employer is different.

Here is a difference. It's not a monopoly of services. THen lets change it to 50/50 at minimum. Just an IRA/401k

[Genoobie]

Seriously on the monopoly? Just about all financial transactions go through a handful of banks. This is an oligopoly. What about the purchase of energy? Again another oligopoly where companies commiserate on price-fixing so don't give me that BS about monopoly. I recently had to order some parts for a keyboard that I purchased. I'm handy and can install them myself. When asked if I could do this, the company said that I had to go through one of their authorized services. So as far as that monopoly idea is concerned and how you try and paint it as something unique to government services, think again. Nearly everything that you eat has corn in it. Who controls corn in this country? Archer Daniels Midland. So powerful that they can muscle to have energy policies subsidize unwise investments like ethanol from corn. So spare me the monopoly idea. BTW the NYSTRS has a huge share of market investment, suppose they just pull that out of the markets? Collapse anyone? Oh btw there are guaranteed 401K investments but they are very low yield so you can "choose" a guaranteed pension. My employer doesn't match my 403b contributions and not all 403b investments are guaranteed. Granted, teacher retirement is a perk. At 7 years in I am at 45K, if I had stayed in engineering my starting salary was 45K in 2001. I would be earning far more and would contribute more to my retirement. So part of the reason I took the job was the retirement. What's wrong with that? And honestly, go ahead and tax post-retirment disbursements, we're not talking about a lot of money here anyhow...

[Dougles]

"Other groups do it, why can't we?"

Gennobie, you will be done paying into your pension in 3 years... you will have paid what $12,600 in total over those 10 years... say you work to 62 and have 30 years in with a final 3 years average of $65K.

You will get a pension of around $39,000 a year, NYS tax free so that's closer to about $41K a year.

Now say you live to 92 (to make the numbers easy), you will get over $1.66 MILLION in pension payments (assumes an average 2% COLA). NYS guarentees a 1 to 3% COLA every year.

$1.66MM for a $12,600 investment isn't to bad!

Now for you to have that $1.66MM at age 62 in a private sector job, You would have to invest $17,608.27 a year from age 32-62, assuming a 7% return every year.