"So if we see a major LONG TERM economic collapse then the system will fail or burden the working class so thier retirement is spent covering currently retired people Right?"
Retired PERS members do not receive "working class" tax payer dollars. When a public employee retires the members account is placed in a fund called the Benefits In Force Fund. This is not unlike the purchase of an annuity from an insurance company. In exchange for the total of their account the retiree receives a monthly benefit. Calculation of the monthly benefit uses a complicated actuarial formula, but the amount of the account and age of retiree are the key factors in determining the amount of the monthly benefit. A retiree has to live to at least the 16th of each month or the monthly benefit stops.
Couple of notes for you to consider: Public employees are also part of the "working class". They work for public agencies that provide services that the public receives. The taxes you pay are your share of the cost for these services. You drive on safe streets, breath clean air, have a school to send your kid to, receive fire and police protection, and so on. This is the way it works in a civilized society. And, public employees pay taxes too. Question: how long does a tax dollar remain public property? Public employees are paid to perform a job. They trade their skills and time for compensation. Just like others that go to work and earn a living. It is called "Earned Compensation". A portion of the public employees earned compensation is placed in the public employees retirement account. The Public Employees Retirement System manages the public employees account. One more thought to share with you: public employees are your neighbors, and members of the same community you enjoy. They are not a different kind of citizen with different rights, privileges, or responsibilities.
Hope this helps.
posted 3 years, 7 months ago
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