I flagged a few bits of news worth repeating.
The budget fight in Wisconsin is having an immediate consequence–it has prompted a surge in public employee retirements.
The Wisconsin Department of Employee Trust Funds reports that, during the week of February 14-18, 2011, it received more than three times the num ber of requests for retirement estimates than it did the same week in 2010.
At the top of the Department web site is a special link for state and local employees: “Retiring on Short Notice? What Members Should Know and Do.”
The volume of requests for information is so high, the web site notes, that it is having trouble keeping up with demand.
Public employees in Hawaii also started heading for the exits in 2008, and I suspect that exodus has continued.
With the Employees’ Retirement System understaffed and closed for furlough Friday’s, it’s hard to find out what’s happening over there.
A recently retired friend tried to get information on a change in the amount he had been receiving from ERS. Here’s an edited version of his experience.
called ers this morning and got a message saying they could not take my call at this time because of high call volume. the message asked that i leave name number and a brief message, and that i could expect a call back within two business days.
when switched to the message service, i got the additional message that the message box was full and could not accept messages at this time.
went on my lunch break to ers office on Merchant Street. I was advised that i could expect to wait a minimum of 30 minutes to see someone – but the desk person offered me the form to alter my Federal withholding amount…
it’s not possible to contact ers by email – i have continuing problems reaching them by phone. i have no choice but to make an appointment but i can’t get through on the phone, so i have to go there personally to wait an undetermined time to see if i can speak to someone or go there just to make an appointment on a subsequent visit.
On the subject of public employee pension costs, a couple of items of note.
First, the FAIR Blog notes that estimates of the “unfunded liability” of state pension funds are likely less than the numbers being widely cited for a simple reason–the stock market’s recovery from those 2008-2009 lows.
FAIR quotes Dean Baker of the Center for Economic Policy & Research.
…it is worth noting that the size of the shortfall in many of these funds has likely already been reduced as a result of the fact that the stock market has continued to recover from its downturn in 2008 and 2009. On July 1, 2010, the S&P 500 was already more than 11 percent higher than its July 1, 2009 level (from 987 on July 1, 2009 to 1101 on July 1, 2010). Most funds use the stock market’s closing value at the end of the fiscal year as the basis for determining the valuation of their assets. Of course they also use an average, so the valuation would not simply reflect the market value at the end of the fiscal year. However, with the market having already risen substantially from its low (the S&P 500 had risen another 19 percent to 1293 by January 10, 2011), it is likely that pension valuations based on current and future market levels will show smaller shortfalls. In other words, a substantial portion of the shortfalls that were reported based on 2009 valuations have likely already been eliminated by the rise in the market.
If you’re looking for the latest financial condition of the Hawaii Employees’ Retirement System, there’s a section on their web site for “Financials“.
Unfortunately, the last annual financial report listed there was published early last year but covered the fiscal year ended June 30, 2008, although I suspect there’s a new report floating around covering the year ending in June 2009.
Finally, Alternet evaluated a USA Today finding that public employees earn more than private sector employees in most states. Alternate called the story an example of “How to lie with statistics.”
The problem is that USA Today based its story on average wages that fail to take into account education, experience, length of employment, etc.
So their “public workers earn more” line may be correct IF you believe that a PhD economist shouldn’t be paid more than a high school graduate working their first job. Maybe that’s too extreme, but the jobs performed by state employees require a higher proportion of college graduates and more specialized experience.
Alternet notes:
As I wrote last year, Public sector workers have, on average, more experience and higher levels of education than their counterparts in the private sector (they are twice as likely to have a college degree). Economist John Schmitt found that when one controls for those factors — comparing apples to apples –state and local employees earn almost 4 percent less than their brethren in corporate America. (Even accounting for their greater benefits, state and local employees still make less in total compensation than they would doing the same work in the private sector.)