Employee Pension Plans Simplified
Forbes magazine — yeah, the one owned by billionaire trust fund kid Steve Forbes — says Taxpayers Actually Contribute Nothing to Public Employee Pensions:
Pulitzer Prize winning tax reporter, David Cay Johnston, has written a brilliant piece for Tax.com exposing the truth about who really pays for the pension and benefits for public employees in Wisconsin.
Gov. Scott Walker says he wants state workers covered by collective bargaining agreements to “contribute more” to their pension and health insurance plans. Accepting Gov. Walker’ s assertions as fact, and failing to check, creates the impression that somehow the workers are getting something extra, a gift from taxpayers. They are not. Out of every dollar that funds Wisconsin’ s pension and health insurance plans for state workers, 100 cents comes from the state workers.
How can this be possible?
Simple. The pension plan is the direct result of deferred compensation- money that employees would have been paid as cash salary but choose, instead, to have placed in the state operated pension fund where the money can be professionally invested (at a lower cost of management) for the future.
Shorter? Employees contribute to their pension plan and they get those contributions back when they retire. End of story.
Why is this so hard?