[joshAg]

you do realize that the workers negotiated a pension with the city in exchange for lower salaries during the years in which they work, right? This pension is their retirement savings.

The city's benefit is that they don't have to pay as high salary as they otherwise would (without a pension); that means the city can take the money they save on salary each year, invest it, and hopefully get a high enough return that they save money compared to paying a full salary without the pension. Essentially, the city wants to borrow money from the workers at A% interest and then go invest it (maybe in itself, maybe in more traditional investments) and hopefully get an ROI of B%, where B > A.

The workers' benefit is that they get a "guaranteed" retirement fund (ie less risk) that they don't have to manage or worry about and depending on the circumstances, a higher total compensation than they would without the pension (ie the city pays them interest for essentially loaning the city money) (ie better returns).

If the city's investments of the saved salary money returns more than what is needed to fund the pensions, the city gets to keep that extra money.

[zo1]

So the politicians wanted to have their cake and eat it, no I get that perfectly. On the one hand they promise large future payouts to gullible public servants. And on the other hand they get to pander to the general public about how they've reduced the budget (or not increased it). Ridiculous.

For that matter, why is the city in the business of trying to make a profit out of peoples' pensions? And even then there was no accountability or repercussions for politicians that decided to dip their fingers into the pension investment pools.

And the last thing that I'd like to add in response. I think the reason why most people are shocked at this article, is because they've been conditioned and drilled with the thought that public servants are under-paid. But as you say, the public servants did this on "purpose" as a risk-mitigating process. If that's the case, then they need to stop yapping incessantly in the public sphere about how they're paid less in comparison to their private counterparts.

[joshAg]

> So the politicians wanted to have their cake and eat it, no I get that perfectly.

That's how capitalism works (under ideal conditions). Everyone tries to make the best possible deal for themselves, not just politicians.

> For that matter, why is the city in the business of trying to make a profit out of peoples' pensions?

For a multitude of possible reasons. Because the profit there can be used to reduce the tax rates. Because the profit can be used to pay for something that the city couldn't otherwise afford. Because the benefits plan allows them to more accurately plan future liabilities (compared to paying employees a market rate salary (that's not otherwise lowered by a pension) that floats up and down with inflation and the economy).

> And even then there was no accountability or repercussions for politicians that decided to dip their fingers into the pension investment pools.

Are you talking about embezzlement or about the city borrowing money from the pension fund? The first is illegal and an enforcement problem that's pretty unrelated to where the money was embezzled from. The second may or may not actually be a problem depending on the terms at which the city borrows the money. Regardless, that's also not related to pensions specifically, since the city can borrow money at stupid terms from anyone, not just the pension fund.

> I think the reason why most people are shocked at this article, is because they've been conditioned and drilled with the thought that public servants are under-paid.

That's because the public workers actually were underpaid compared to private industry workers when the deals were originally negotiated (even including the expected value of the pension). Over the years since then, private corporations have lowered the salaries they pay (usually by not keeping up with inflation as opposed to actual pay cuts, though that happens, too) most of their workers, so public sector jobs have become much more competitive.

> If [the public servants did this on "purpose" as a risk-mitigating process]'s the case, then they need to stop yapping incessantly in the public sphere about how they're paid less in comparison to their private counterparts.

I have a few problems with many of the implicit assumptions in this statement; specifically that there is an agreed upon way to value a pension, that there is an agreed upon way to value the value of the risk-mitigation of a pension plan, that there is little variation in the ratio of the total compensation public workers earn to a market rate salary across all government workers, that all government workers are yapping incessantly about being paid less than market rate when using total compensation instead of just salary (combined with the previous assumption: as opposed to just the ones that are currently underpaid), and that only the workers are benefiting (or that they benefit much more than the city) from such a deal.

On a side note, it's disappointing to see people want to drag the public sector workers down to a their (possibly only just perceived) lower level instead of wanting to drag themselves up to the public sector workers' level.

[zo1]

"That's how capitalism works (under ideal conditions). Everyone tries to make the best possible deal for themselves, not just politicians." Well, the common tying nature between capitalism and what I we're describing there is human nature. Which, I would say, has strong under-currents of greed. The difference between the thing we're discussing and capitalism/free-market is that in the latter, greed can't manifest it's ugly head with absolute state power. It's tempered by being required to provide to the rest of society a valuable good/service, that they request.

"The second may or may not actually be a problem depending on the terms at which the city borrows the money. Regardless, that's also not related to pensions specifically, since the city can borrow money at stupid terms from anyone, not just the pension fund." Well, I'm not sure about borrowing as such. But I was referring to politicians/finance committees using up the capital in pension funds, and then having to pay pensioners their pension yearly from new tax-money that comes in. So in essence, they destroy the buffer and end up just siphoning new funds into pensions that start maturing.

"Over the years since then, private corporations have lowered the salaries they pay (usually by not keeping up with inflation as opposed to actual pay cuts, though that happens, too) most of their workers, so public sector jobs have become much more competitive." That may be the case, I haven't looked at the raw data to refute that. But I'd add that perhaps the corporations lowered the salaries because of a slouching/badly performing market. In which case it's the rest of society that is subsidizing the now-cushy jobs of the public sector. On top of having to deal with their (possibly) under-paid jobs in the private sector.

"I have a few problems with many of the implicit assumptions in this statement; specifically that there is an agreed upon way to value a pension, that there is an agreed upon way to value the value of the risk-mitigation of a pension plan, that there is little variation in the ratio of the total compensation public workers earn to a market rate salary across all government workers, that all government workers are yapping incessantly about being paid less than market rate when using total compensation instead of just salary (combined with the previous assumption: as opposed to just the ones that are currently underpaid), and that only the workers are benefiting (or that they benefit much more than the city) from such a deal."

I agree with you to an extent on this point. We are making a lot of assumptions in this discussion, and we're clumping together disparate values to attempt a comparison. I'm probably not the person to debate with on the finer details because I will interpret most of these things from my anarcho-capitalist viewpoint of the state. So to me, generalizing things to what they actually are is much more meaningful than endlessly comparing apples and oranges within the complicated framework of the state.

"On a side note, it's disappointing to see people want to drag the public sector workers down to a their (possibly only just perceived) lower level instead of wanting to drag themselves up to the public sector workers' level." There are probably multiple things at play here regarding peoples' opinion of public sector workers. To me, at least, I see them as leeches of the state. They represent a class of individuals that are permanently dependent on leeching the benefits given to them by the state. They will fight tooth and nail for the benefits that they get from the state, to the detriment of society by preventing a possibly different form of governance from emerging. Now, don't get me wrong, these are probably good people that don't deserve to have their livelihood yanked from underneath them. But I am forced to acknowledge the fact that change is very very difficult because we have so many people reliant on (what I would view) very unnecessary benefits.