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Comment by outside1234 | Hacker News Reader

Just pay them market rate and give them 401ks like everyone else - what am I missing? Why do we keep doing this to ourselves with government jobs?

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> Why do we keep doing this to ourselves with government jobs?

Because the politician who agrees to the largess will be long gone before the bill comes due.

Not sure how to fix this, but generally I think some sort of additional checks and balances should be required whenever government takes on huge future liabilities.

Easy to fix, ban long term compensation agreements. If a union wants an annuity, they can go buy it from an insurance company. No need to negotiate anything other than cash salaries. Unfortunately, not enough taxpayers vote to offset the government workers voting themselves benefits as a bloc.

And sadly every time we grow the size of government by assigning more responsibilities to government, the larger that voting bloc grows. In states favoring big government, this can only end badly. Although they can always raise taxes to address shortfalls, this has limits as it eventually drives those paying the most taxes to low-tax states.

> Why do we keep doing this to ourselves with government jobs?

Time horizon arbitrage.

The elected politicians care about things looking good the next 4 years. The employee unions care about the life long outcome for their members.

Doing this requires spending money now. You can get away with funding pensions with IOUs much longer than you can do it with a salary or 401k. Further the benefits of solving this kick in long after you are out of office, assuming no one breaks your system before then.

Public employee unions.

Public employees don't have a market rate...wat

A lot of states do this. Florida Retirement System for public employees is mostly paid for through managed assets.

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