Posted on 10/11/2009 8:08:43 AM PDT by TigerLikesRooster
Steep Losses Pose Crisis for Pensions
Two Bad Choices for Funds: Cut Benefits Or Take Greater Risks to Rebuild Assets
By David Cho
Washington Post Staff Writer
Sunday, October 11, 2009
The financial crisis has blown a hole in the rosy forecasts of pension funds that cover teachers, police officers and other government employees, casting into doubt as never before whether these public systems will be able to keep their promises to future generations of retirees.
The upheaval on Wall Street has deluged public pension systems with losses that government officials and consultants increasingly say are insurmountable unless pension managers fundamentally rethink how they pay out benefits or make money or both.
Within 15 years, public systems on average will have less half the money they need to pay pension benefits, according to an analysis by Pricewaterhouse Coopers. Other analysts say funding levels could hit that low within a decade.
After losing about $1 trillion in the markets, state and local governments are facing a devil's choice: Either slash retirement benefits or pursue high-return investments that come with high risk.
(Excerpt) Read more at washingtonpost.com ...
He should have said 'One Good, One Bad Choice.'
Ping!
Voted for Obama, bad choice.
Not to worry. O, (taxpayers) to the rescue.
Trying to keep up with the defined benefit plans for highly paid public employees is going to bankrupt cities, counties and states. It already has. Then you add their health care on top..
They need to shift to a defined contribution plan immediately. Let the unions strike. The citizen’s need to demand action.
I think they (public employee pension funds) can legally ream out the taxpayer
In other words the taxpayers are on the hook for these insane pensions and benefits unless there is ....
BANKRUPTCY
Only then can public sector contracts be revisited
During the last fiscal year, Ohio's fund lost 31 percent. Its most recent annual report detailed how long it would now take for its investments to put the fund back on track. Officials simply said: "Infinity."
I think it is a strong possibility that the government and the fed have been propping up the stock market to support the pension funds. They can either pay to keep the market up, or they can pay to bail out pension funds. This is also how the expanded money supply will be forced into circulation, with resulting inflation.
Given public sector employees want to be paid the same level of compensation as private sector employees (without the risk of market competition which previously allowed them to be paid less given job security and guaranteed pensions at the cost to taxpayers)I say let them join the rest of us “at risk” employees so they better understand who creates the wealth they tax and live comfortably off in the first place. To he$$ with public employee largesse; the free ride is over. Taxpayers unite and fight!
Now the idiots want to end 401K plans. There is no segment of our society that they don’t want to destroy.
They are making the former soviet union seem a desirable alternative to Obamaland.
It’s sickening, terrifying, and seemingly unstoppable.....at this time.
“.....some funds are seeking to trim benefits to conserve money. Some governments have also proposed increasing the amount of public money paid each year into the funds”
....there’ll be no “trimming”....but rather “increasing” tax dollars paid into the funds....around the time of LBJ the size of governments at all levels began to grow....and all those employees represented a powerful voting bloc...the Dems will give them whatever it takes to have them voting a straight Democrat ticket.
What would go in its place? No savings for workers in private enterprise?
They're doubling down. Gambling, not investing. Excellent article (despite coming from WP). Thanks for posting.
Salaries for feds in the DC area are typically in the six figures (mid-level grade 13 and up which are quite common for “professional jobs”). Job security is near absolute, leave and holidays are exceedingly generous, and retirement is lucrative.
And meanwhile, we self employed persons continue to count or pennies, continue to work, continue to pay taxes to fund retirements and wages for others that we can’t attain or afford.
How stupid is this?
Try to get even one in ten of teachers, cops, firemen, “public servants” or any other person with a pension to understand the present value of their benefit provided on the back of the taxpayer. Try to get even one of them to admit or even begin to understand that there is no way that their pension contributions could ever pay for their benefits ...they feel they are entitled and are too stupid to know the difference. Yes, stupid.
He simply drops these ideas out there and waits to see if it is met with serious resistance.
He never divulges his true plans.
The one comment I recall is that 401ks would be replaced by government controlled retirement funds.
AVERAGE federal employee compensation = $75,000 / year with LUSH and generous benefits and paid up pension and medical. All but guaranteed employment.
AVERAGE US family household income in private sector = $54,000 no or some benefits but not like public sector ...nowhere near close. Mostly 401K retirements or none at all. All but guaranteed layoffs and unemployment periods.
ANYBODY got any idea what is wrong with this picture? ANYBODY?
This will get much worse by next year. It will be interesting to see if the leftist retirees in the NEA and other GOVERNMENT-related unions will actually start the revolution.
Tain’t Obama’s fault. If you and others blame everything on Obama you will never address the real problems. Obama is being turned into the whipping boy for Wall Street, idiot libertarians, Greenspan, Phil Gramm, Bush, Clinton, Summers, Rubin, etc.
This economic mess has been in the making for years. Let’s please just spank Obama for the bad stuff he does, like “crap and played” and sitting on his *ss about Afghanistan, etc.
parsy, who is waiting for King Obama to be blamed for the Hindenburg blowing up
It’s Obama’s fault.
That may be the average but DC area feds are generally compensated at higher levels and receive higher COLAs. Check out the OPM website and look at the fed salary tables for DC area, and remember that GS-13s and up are numerous. You won’t be happy.
There are lots of things wrong but the root of the problem is US (not anyone in particular). We the people put these @$$ holes in office, did not watch what they were doing and they collectively destroyed this country. Identifying symptoms is something we need to do, but we can't forget to focus on the decease. Complacency!
An awful lot of us out here in reality haven’t the luxury of a “guaranteed” pension benefit...
Ping to myself.
I'm there with you. Health insurance premiums going up $100/month ((Blue Cross), energy costs going up 30% in 2010 (PP& L), income down 50% this year and 401K down 30%. Our thermostat will be set at 65 during the day and 60 at night, but at least the public sector employees can keep theirs at 72 24/7.
You and I are the turnips from which blood will be extracted to fund the generous pensions and benefits of our "vaunted" public employees who are spared from the effects of a bad economy that the rest of us have to suffer.
I see your picture and I agree that it is very unfair.
I just spent the weekend with a group of ladies on a church retreat. Lovely individuals, and kind. Unfortunately, many lean left, as is often the case among American women. While many of us did a little shopping in the quaint town near our retreat house (it's our annual tradition), I couldn't help noticing who was doing the most actual buying as opposed to window shopping. Biggest spenders were government employees and government service retirees. Sigh.
Meanwhile, we are busy trying to make a living just like I’m trying to do at this hour of the morning.
Complacency is not something I will accept being accused of. Between local, state and federal they can wreck and ruin faster than we can keep up. Paying them to irritate and eventually hurt us is the thing we are guilty of.
It is time for a MAJOR CHANGE and it is not what obozo thinks. It is past time for a sweeping change and VAST simplification. We need to quit paying people to hurt us. SOMEHOW.
The sedition cops may be watching or I would make a suggestion. It needs to be done.
Every town meeting is cops, firemen, teachers voting to give themselves raises, new public palaces complete with elevators, gyms, sub zero kitchens. And the elderly that want lavish service now, with debt passed on to future generations after they are dead. And town officials that like to play government and play soft rape of the taxpayer.
Also a growing financial industry that doesn’t like to pull in retail customers and would rather get millions from town officials who collect it like old tyme mob collectors with threats of seizing property. Throw in in a dufus journalism run media that couldn’t do 2 plus 2 but writesn loving pages about the new, lousy built union worker ‘community center’ and well....there you go.
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