I recently read that in recent rounds attempting to address the city's pension issues, MPRA negotiated for a potential investment performance bonus referred to in the SW Journal article as a "13th check." If true, I am amazed. I mean...what in the &$#?
Managing investments with known liabilities can not be managed this way! Pay what we promised but that's it. In good years a gain above expectations will help assure a proper asset base for future liabilities..meaning that we can help to ensure future payments. Anyone reading this that is in the investment business should cringe. I myself may cringe if my lack of knowledge with employment contracts exposes the fact that this kind of "deal" is in fact quite common. If every good year we pay out some excess (any excess) it could be argued that a lack of fiduciary duty (to future recipients of payments) has been displayed because we are not building for known future liabilities after current needs have been met. The assumption implied to refute this claim must lie in a belief of constant ability to tax when needed and as much as is needed. This needs to be stopped. Period Current contract provisions won't be rescinded because they're already in contract. However, the result we are left with implies the "Mpls side" of this negotiation was asleep, inept or crooked. Please note, I am not outright stating anyone is crooked. I am saying take your choice among those I have offered. The fault, yes I said fault, lies with those that approved this deal. Nonetheless, when thinking of the MPRA here I am reminded of the movie "A Beautiful Mind" where the main character decides that the economic theory of "everyone for himself" is somewhat incomplete and that when dealing with known scarce resources within a group sharing like goals everyone for himself is indeed appropriate... until such individual goals begin to shrink the possibilities of the group as a whole. With many in the private sector losing benefits left and right, the negotiated packages of many municipal employees end up looking pretty lucrative on the benefit side. In fact, reading plan documents indicates that benefit payments are not only covered by inflation expectations of 3% but are expected to increased 4%; implying they have inflation plus 1% benefits coverage. Where I ask you in the private sector is this offered? And don't reply with the classic executive pay argument. I agree with all that. I am indicating that the lowest employee in the pyramid is getting paid more than market compensation when bennies are examined. This situation is precisely why nearly 50 years ago JFK (yes JFK) was quite uncomfortable with municipal employee unions...they are part of the group that has the checkbook! Jason Harrison REMINDERS: 1. Be civil! Please read the NEW RULES at http://www.e-democracy.org/rules. If you think a member is in violation, contact the list manager at [EMAIL PROTECTED] before continuing it on the list. 2. Don't feed the troll! Ignore obvious flame-bait. For state and national discussions see: http://e-democracy.org/discuss.html For external forums, see: http://e-democracy.org/mninteract ________________________________ Minneapolis Issues Forum - A Civil City-focused Civic Discussion - Mn E-Democracy Post messages to: mailto:[email protected] Subscribe, Un-subscribe, etc. at: http://e-democracy.org/mpls
