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Tuesday, February 28, 2017

Look whose pension is tax exempt

As a retiree, I am extremely sympathetic to Teamster truckers in New York state who were promised huge pensions only to watch them shrunk in retirement.

A New York Daily News story on the situation revealed that despite pensions being slashed, the New York state tax collector has his hand out. You see, unlike the pensions the tax collectors will receive, the Teamster pension are not tax exempt.

The Teamsters have various pensions for locals. Not enough money was put away to pay them.

The Daily News reported:
Bigger than all of New York’s Teamster locals combined is the Central States Pension Fund — another looming financial disaster that could leave 407,000 retirees without pensions across the Midwest and South.
Congress in 1974 set up an insurance agency called the Pension Benefits Guarantee Corporation to cover pensions when a company or union fails.

This was a huge problem at the time and still is. The dirty little secret is defined benefits are little more than paper promises fulfilled long after the CEOs who sign them have left the building.

Stick with 401-k plans and the like, kiddies.

From the Daily News:
“I don’t want other people to have to go through this. We need everyone to wake up and do something; that’s why we’re talking,” said Ray Narvaez.
Narvaez, 77, got a union certificate upon retirement in 2003 that guaranteed him a lifetime pension of $3,479 a month.
The union a few years ago cut that by a third. And this is the situation now:
Pension Benefit Guaranty Corp. picked up Local 707’s retiree payouts — but the maximum benefit it gives a year is roughly $12,000, for workers who racked up at least 30 years. For those with less time on the job, the payouts are smaller.
Narvaez now gets $1,170 a month — before taxes.
Ex-trucker Edward Hernandez, 67, went from $2,422 a month to $1,465 last year. As of this month, his gross check is $902. After federal taxes, it’s $721 — but he still has to pay state and city taxes.
Meanwhile, for state workers, things are different.

From the state comptroller's office in an FAQ section:
Is My Pension Taxable?
Your pension is subject to federal income tax, but it is not taxed by New York State. If you move out of New York, you may have to pay state taxes on your pension. Visit the Retired Public Employees Association website to see which states tax pensions.
Don't that beat all?

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  1. Of course. Governments take care of their own workers better than hoi polloi. And governments that issue pensions can always tax the common folks more to cover their cost. The U.S. Government can simply print the money. It's a sweet system - if you're a government worker. - Elric

    1. California has billions of dollars in unfunded public employee pension liabilities. Meanwhile the governments responsible play "kick the can down the road" so they don't have to deal with it.

  2. The government protects its employees and sucks the life out of everyone else. Unfunded liabilities from crony agreements due in part (or in whole) to being generous with the taxpayers' money.

    1. And don't forget the incestuous relationship between Big Government and government employee unions. - Elric

  3. A rainy night, a mountain road, load's starting to dance, and WTF is that white post doing there?

    Time to stop distracting the driver, Leftards and NeverTrumpers.

  4. The New Yaukers already figured it out...they move to Florida.

    (no comment)

  5. War has been declared by the State and it's employees against their citizens.

  6. Yeah, when I got my early retirement package, my company asked if I wanted a lump sum or yearly payments. What a no brainer. I said gimme that cash NOW. Same with my wife's SocSec. As Steve Miller once sang, take the money and run.

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