Slick Rick Perry "retires" to boost pension

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Originally Posted by Yonivore

Since you like scenarios so much.

Scenario 1) Governor Perry's salary, $150,000. State's 6% contribution to his retirement account, $0.00. Governor Perry's annuity, $90,000. Grand Total - $240,000.

Scenario 2) Governor X's salary, $150,000. State's 6% contribution to his retirement account, $9,000. Governor Perry's annuity, $90,000. Grand Total - $249,000.

It's disingenuous to include his annuity as part of his salary the way the article did. If he's entitled to draw retirement pay, it's his account and he followed the rules to access it.

And, after consideration, it's not this practice that bothers me, it's state funded pensions altogether. I would rather be paid an additional 6% and be allowed to invest for my own retirement.

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In both scenarios they are still Governor Perry. He didn't ACTUALLY retire, he only did it from this financial perspective, so the real scenarios are:

1) Governor Perry is still governor, making $150k and state paying their match of $9,000 for a total of $159k

2) Governor Perry is still governor, making $150k and state paying him $90k retirement for a total of $240k.

The scenario in which Perry ACTUALLY retires and we get to $249k doesn't apply... since he didn't actually retire nor is there any indication that he would.

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Originally Posted by ElNono

You think wrong. You simply are unable to grasp what his point is.
Hint: His point has nothing to do with hiring another governor.

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Originally Posted by ElNono

Than again, you're just dumb Yoni. That's very likely the reason scott decided he had better things to do.

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Correct on all accounts.

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Originally Posted by scott

In both scenarios they are still Governor Perry. He didn't ACTUALLY retire, he only did it from this financial perspective, so the real scenarios are:

1) Governor Perry is still governor, making $150k and state paying their match of $9,000 for a total of $159k

2) Governor Perry is still governor, making $150k and state paying him $90k retirement for a total of $240k.

The scenario in which Perry ACTUALLY retires and we get to $249k doesn't apply... since he didn't actually retire nor is there any indication that he would.

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The $150,000 check is issued on a warrant from the State of Texas.

The $90,000 check is issued on a warrant from the Employees Retirement System of Texas and paid from funds earned on investment of the contributions made during the time he was participating in the plan.

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Originally Posted by scott

Correct on all accounts.

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What, your point is you don't like that Perry was able to increase his short term income without costing the State a dime and, in fact, saving it approximately $9,000 per year? Is your point that the ERS is likely to save money on annuity payments because Perry opted to start a $90,000 annuity instead of letting it grow to approximately $100,000 in 5 years?

What is your point?

Does he have to take any money at all?

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Originally Posted by Yonivore

The $150,000 check is issued on a warrant from the State of Texas.

The $90,000 check is issued on a warrant from the Employees Retirement System of Texas and paid from funds earned on investment of the contributions made during the time he was participating in the plan.

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It doesn't matter who issues the check, both are real dollars from state agencies of the state of Texas. Paying Rick Perry $90k of his retirement funds today means $90k less funds in the agency coffers. And where do you think the state's match is coming from?

You've wrongly assumed I care if it's Rick Perry or any other official doing this. I don't blame Rick for getting his in line with the system. I care that this system exists, and it shouldn't. You even agreed, but you're stuck on this ridiculous byzantine argument that he's saving the state money, which he isn't.

The only economic justification for having this system is to incentivize elected officials to try to stay in office longer (since this system creates the financial incentive for them to do so). If that is the goal of the system, it succeeds. I'm still against it. And unlike you, I'm against it no matter who instituted it or who benefited from it.

that's a notable difference

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Originally Posted by Yonivore

What, your point is you don't like that Perry was able to increase his short term income without costing the State a dime and, in fact, saving it approximately $9,000 per year? Is your point that the ERS is likely to save money on annuity payments because Perry opted to start a $90,000 annuity instead of letting it grow to approximately $100,000 in 5 years?

What is your point?

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My point, beside that you're an idiot, is that the system shouldn't exist like this for ANYONE (I've written it enough times in this thread, but its no surprised a Charlatan like you glossed over it).

It isn't saving the state any money, unless you like to make a twisty road of assumptions that lets you compare apples to oranges, like you have.

You're demonstratively incapable of grasping the concept of marginal thinking, which explains a great deal of your continued buffoonery.

with a capital C

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Originally Posted by scott

It doesn't matter who issues the check, both are real dollars from state agencies of the state of Texas. Paying Rick Perry $90k of his retirement funds today means $90k less funds in the agency coffers. And where do you think the state's match is coming from?

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It does matter and you're just fundamentally wrong about the nature of the two sources of dollars. But, I give, have your way, scott.

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Originally Posted by scott

You've wrongly assumed I care if it's Rick Perry or any other official doing this. I don't blame Rick for getting his in line with the system. I care that this system exists, and it shouldn't. You even agreed, but you're stuck on this ridiculous byzantine argument that he's saving the state money, which he isn't.

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And you've wrongly assumed it is my intent to defend Perry. The amount of money being transferred from the State to the ERS goes down by $9,000 per year.

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Originally Posted by scott

The only economic justification for having this system is to incentivize elected officials to try to stay in office longer (since this system creates the financial incentive for them to do so). If that is the goal of the system, it succeeds. I'm still against it. And unlike you, I'm against it no matter who instituted it or who benefited from it.

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I've grown ambivalent the longer I have this argument with you.

There is one Governor. No matter if it's Rick Perry or someone else, the State is going to expend $150,000 per year on that position. And, regardless of whether he retired and stayed or retired and quit working, the expenditures by ERS don't change; they're $90,000 per year. The only difference is when he retires and quits working, the new Governor will require the State to resume the $9,000 per year contribution. If he waited 5 years and retired and quit, ERS is out $100,000 per year and the State is still contributing the $9,000.

Where does the State lose money?

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Where does the State lose money?

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Explained, and re-explained. Unfortunately you lack the basic comprehension skills required. Good luck with that.

Let's let other state employee like unionize teachers double-dip and see if Yoni is still so supportive

:lol

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Originally Posted by Nbadan

Let's let other state employee like unionize teachers double-dip and see if Yoni is still so supportive

:lol

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Other State employees already do. I'm not sure if TRS has similar rules as ERS but, I've known about this for decades and I don't think you've ever seen me post anything about it.

Yoni, since it saves the state money to let people "retire" while they are still working - why don't we have every Government employee on every level start collecting retirement benefits when they are 45 while they continue to work?

That would save the us tons of money, right?

....but the state doesn't have to match his $9,000 yearly contribution to ERS, except it does...

:lol

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Originally Posted by Yonivore

That would make $100,000 less than $90,000.

Whether the Governor stayed in or left office when he became eligible to draw from his retirement account only affected the amount of the State's contribution and the ERS annuity -- both of which benefit from his decision to stay in office and accept a smaller annuity.

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You still fail to comprehend one basic fact. There is no decision to "stay in or leave office." He stayed in, and he would have stayed in regardless.

His collecting retirement versus not being able to collect retirement while in office in is going to cost the state retirement fun $90k that it otherwise wouldn't have multiplied by the number of years he remains in office, less the savings to the state on their contributions to his retirement.

If, the present value of the sum of all the differences in payment of the smaller annuity versus the larger one is greater than the cost to the retirement system his early retirement has while he is still in office... THEN AND ONLY THEN, has he saved the state any money.

As demonstrated earlier, he would have to live quite a long time for the state to break even when you consider the time value of money.

Algebraically:

Cost of "Retirement" Under Existing System = ([Value of Early Annuity] - [What State Would Otherwise Have Had to Contribute Annually]) * [Number of Additional Years In Office]

"Savings" of ERP Contributions = [CF1 / (1+r)^1] + [CF2/(1+r)^2] ... + [CFn/(1+r)^n]

Where:

CF = [Annuity Payment at actual retirement] - [Annuity payment at early "retirement"
r = discount rate
n = years after actual retirement recipient of annuity dies

With previously used CF, if we use a discount rate of 0%, then it would require an N of 26. If we up the discount rate to 3%, it would require an N of 50 years.

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Originally Posted by scott

You still fail to comprehend one basic fact. There is no decision to "stay in or leave office." He stayed in, and he would have stayed in regardless.

His collecting retirement versus not being able to collect retirement while in office in is going to cost the state retirement fun $90k that it otherwise wouldn't have multiplied by the number of years he remains in office, less the savings to the state on their contributions to his retirement.

If, the present value of the sum of all the differences in payment of the smaller annuity versus the larger one is greater than the cost to the retirement system his early retirement has while he is still in office... THEN AND ONLY THEN, has he saved the state any money.

As demonstrated earlier, he would have to live quite a long time for the state to break even when you consider the time value of money.

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While I understand what you're saying, his eligibility to draw from his retirement is not dependent on whether or not he leaves office and, if he did leave office, the State would be out more money than if he stayed.

Under the rules that make up the ERS, he is eligible to draw that money. I understand that you think that's wrong but, it is what it is. And, under those rules, the State is saving $9,000 per year while he remains in office and approximately 2% per year (on his annuity) for every year hereafter that he stays in office.

That he keeps the job of Governor and makes $249k is as irrelevant to the equation as would be if he left the office and took a job making $300,000 (that becomes $390,000 with his annuity) except to say, his replacement would then begin costing the State another $9,000 per year.

I doubt you read all the way through these posts anymore, because you long ago determined I had it wrong.

You're viewing this in terms of his annual salary increasing by $90,000 per year and I'm viewing it in terms of his eligibility to access an account according to their rules -- and, by the way, I'm pretty sure those rules have been in place for a very long time.

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Originally Posted by scott

Algebraically:

Cost of "Retirement" Under Existing System = ([Value of Early Annuity] - [What State Would Otherwise Have Had to Contribute Annually]) * [Number of Additional Years In Office]

"Savings" of ERP Contributions = [CF1 / (1+r)^1] + [CF2/(1+r)^2] ... + [CFn/(1+r)^n]

Where:

CF = [Annuity Payment at actual retirement] - [Annuity payment at early "retirement"
r = discount rate
n = years after actual retirement recipient of annuity dies

With previously used CF, if we use a discount rate of 0%, then it would require an N of 26. If we up the discount rate to 3%, it would require an N of 50 years.

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So, you're upset that he decided to access his retirement account at first eligibility instead of waiting until he left State employment. I get it. But, that's not the way ERS requires it.

Frankly, I think he's a bit shortsighted to freeze his annuity at 60% of his current salary -- for the remainder of his life -- instead of allowing it to continue to grow at 2% per year until he needed to begin drawing on it. I am curious about his reasoning.

Perhaps he has monetary necessities now the additional $90K will help with. He did just endure major back surgery this past June and with the affects of Obamacare, out of pocket medical costs have skyrocketed.

I recently paid $400 for a medical test that just 3 years ago, my insurance covered at 100%.

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Originally Posted by Yonivore

While I understand what you're saying, his eligibility to draw from his retirement is not dependent on whether or not he leaves office and, if he did leave office, the State would be out more money than if he stayed.

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I acknowledged this back on page 1.

I'm not arguing which option costs/saves the most money on the current system, I'm arguing the current system costs more money than the system that should be implemented.

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Under the rules that make up the ERS, he is eligible to draw that money. I understand that you think that's wrong but, it is what it is. And, under those rules, the State is saving $9,000 per year while he remains in office and approximately 2% per year (on his annuity) for every year hereafter that he stays in office.

That he keeps the job of Governor and makes $249k is as irrelevant to the equation as would be if he left the office and took a job making $300,000 (that becomes $390,000 with his annuity) except to say, his replacement would then begin costing the State another $9,000 per year.

I doubt you read all the way through these posts anymore, because you long ago determined I had it wrong.

You're viewing this in terms of his annual salary increasing by $90,000 per year and I'm viewing it in terms of his eligibility to access an account according to their rules -- and, by the way, I'm pretty sure those rules have been in place for a very long time.

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I'm not viewing in any of the ways you think I am - because I'm arguing all the details in this section are the problem.

I'm saying "This system should be done away with",

You're counting with "But Result A of the system is better than Result B of the system",

To which I've been responding "Both Result A and Result B of the system are worse than if the system didn't exist".

How long the system has been around, or which path within the system are taken are all irrelevant to my argument of "we shouldn't have this system"

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Originally Posted by Yonivore

So, you're upset that he decided to access his retirement account at first eligibility instead of waiting until he left State employment. I get it. But, that's not the way ERS requires it.

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I'm not upset about his decision to do anything. Why is this so difficult for you to understand? I'm saying we would be better off without the system. Plain and simple. End of argument.

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Frankly, I think he's a bit shortsighted to freeze his annuity at 60% of his current salary -- for the remainder of his life -- instead of allowing it to continue to grow at 2% per year until he needed to begin drawing on it. I am curious about his reasoning.

Perhaps he has monetary necessities now the additional $90K will help with. He did just endure major back surgery this past June and with the affects of Obamacare, out of pocket medical costs have skyrocketed.

I recently paid $400 for a medical test that just 3 years ago, my insurance covered at 100%.

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Frankly, remind me to never take financial advice from you, since the present value of his double dipping exceeds the present value of the reduction of his annuity.

But hey, if you give me $100 bucks, I'll give you $1 a year for the rest of your life. Deal?

It only took 4 pages... :lol

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Originally Posted by scott

I'm not upset about his decision to do anything. Why is this so difficult for you to understand? I'm saying we would be better off without the system. Plain and simple. End of argument.

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That's not true.

If the system were like you think it should be, and he left employment at his first opportunity, the ERS would still be out the $90,000 per year for the number of years between his beginning to receive an annuity and the imaginary date, in the future, when you think he should start drawing on his ERS account. And, the State is still out the $150,000 per year for the replacement Governor + the $9,000 per year contribution.

The continued growth in his annuity, beginning on the first date of his eligibility and ending on the date he leaves office serves as an incentive for employees to remain in their positions until the annuity reaches an amount satisfactory to the employee -- not the system.

ERS is a system. It serves as a retirement account for quite a number of people. Some leave their jobs after being vested but, before being eligible to draw on their accounts. Some stay in their jobs way past the date of eligibility and then, when they finally separate, start drawing on their accounts. I know some that take home 115% of their former net take home pay because they worked to 100% eligibility and there is less taken out of their annuity than was taken out of their salary.

They are viewed as two different processes. One is compensation for a job -- compensation (for the Governor's position, anyway) that would be paid to someone, regardless. The other is a return in an investment of contributions, from an employee and an employer, that matures and is available beginning on a certain date promised early in the contract.

You're equation, a couple of posts back, called it an "early annuity." It would have only been early if he had been allowed to draw on it before he had been eligible.

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Originally Posted by scott

Frankly, remind me to never take financial advice from you, since the present value of his double dipping exceeds the present value of the reduction of his annuity.

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Okay. But, he's not double-dipping. He's being paid a wage and he's receiving an annuity for which he is entitled.

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Originally Posted by scott

But hey, if you give me $100 bucks, I'll give you $1 a year for the rest of your life. Deal?

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Are you the guy that parlayed Hillary Clinton's $1,000 investment?

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Originally Posted by Yonivore

That's not true.

If the system were like you think it should be, and he left employment at his first opportunity, the ERS would still be out the $90,000 per year for the number of years between his beginning to receive an annuity and the imaginary date, in the future, when you think he should start drawing on his ERS account. And, the State is still out the $150,000 per year for the replacement Governor + the $9,000 per year contribution.

The continued growth in his annuity, beginning on the first date of his eligibility and ending on the date he leaves office serves as an incentive for employees to remain in their positions until the annuity reaches an amount satisfactory to the employee -- not the system.

ERS is a system. It serves as a retirement account for quite a number of people. Some leave their jobs after being vested but, before being eligible to draw on their accounts. Some stay in their jobs way past the date of eligibility and then, when they finally separate, start drawing on their accounts. I know some that take home 115% of their former net take home pay because they worked to 100% eligibility and there is less taken out of their annuity than was taken out of their salary.

They are viewed as two different processes. One is compensation for a job -- compensation (for the Governor's position, anyway) that would be paid to someone, regardless. The other is a return in an investment of contributions, from an employee and an employer, that matures and is available beginning on a certain date promised early in the contract.

You're equation, a couple of posts back, called it an "early annuity." It would have only been early if he had been allowed to draw on it before he had been eligible.


Okay. But, he's not double-dipping. He's being paid a wage and he's receiving an annuity for which he is entitled.


Are you the guy that parlayed Hillary Clinton's $1,000 investment?

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smh... there is obviously no hope for you.

[Yonivore Logic]Man, if every employer in America would just let them double-dip, they'd save millions![/Yonivore Logic]