Skip to comments.Public pension crisis has tragic consequences
Posted on 12/31/2010 9:43:04 AM PST by eagles
Mark Hemingway: America's public pension crisis has tragic consequences
By: Mark Hemingway 12/26/10 8:05 PM
When the police found the body of the town's 58-year-old retired fire marshal, the lights had been turned off in his house and he had no running water. He had no money to pay his bills and he was too proud to accept help from his neighbors.
Perhaps because he was so proud, the New York Times was polite enough not to use the fire marshal's name in their account of his death.
Welcome to Pritchard, Ala., where the public employee pension checks just stopped coming. As the Times reported last week, leaders of the city on the outskirts of Mobile had known since 2004 the pension fund was scheduled to run dry last year.
The city tried to declare bankruptcy, but state law forbids the town from ducking its pension obligations and a judge wouldn't allow it. The city just stopped paying its pensions. Pritchard's 150 retired city employees are reduced to showing up at city council meetings begging for money to get through the Christmas season.
For some years now, there have been warnings that the public pension crisis would sooner or later reach critical mass. America's public pension plans are underfunded by an estimated $3.6 trillion.
And the pension problem might be worse than that eye-popping figure suggests. We don't have a good handle on the scale of the problem because so many cities and states are either ignoring it or cooking their books to conceal it.
But what happened in Pritchard should send a message to the rest of America: It can happen here. We are out of money, and our many of our public pensions are already on borrowed time.
The biggest obstacle to preventing what happened in Pritchard from happening nationwide might be the public employees themselves. Public union leaders simply refuse to believe America is out of money.
Just last week, Chicago Mayor Richard M. Daley -- usually no proponent of fiscal austerity -- was begging Illinois Gov. Pat Quinn to veto a deal that would raise property taxes in the Windy City by $550 million to fund public pensions.
"This is the highest real estate tax increase in the history of Chicago and that's only for fire and police. If you put the other unions in there, it's about $1.2 billion in one year. ... This will really hit the people. How are you gonna sell your home even if you're retired? Who would want to buy your home? Buyer beware," Daley told the Chicago Sun-Times.
In Chicago, the unions claim they are making concessions. Police and fire fighters agreed to reduced cost-of-living increases, salary caps and raising the retirement age from 50 to 55. The legislature further offered a meaningless pledge to make sure their pension fund was 90 percent funded by 2041.
Is that supposed to be a fair trade-off? Taxpayers get sharp tax increases and can't sell their houses, but still pay for firefighters and police to retire with 80 percent of their salary and full benefits a decade or more before most Americans can even dream quitting their jobs? And pensions still won't be fully funded 30 years from now?
It's no mystery why the Times reported Pritchard "stands as a warning to cities like Philadelphia and states like Illinois, whose pension funds are under great strain." (Philadelphia is also raising property taxes 9.9 percent to fund pensions.)
If the busted public pensions in small-town Alabama make for a particularly tragic tale, what kind of misery is going to unfold when some of the largest towns and states in the country run out of money?
Mark Hemingway is an editorial page staff writer for The Examiner. He can be reached at firstname.lastname@example.org. Get Email Alerts
Read more at the Washington Examiner: http://washingtonexaminer.com/opinion/columnists/2010/12/mark-hemingway-americas-public-pension-crisis-has-tragic-consequences#ixzz19i7ROUKQ
Cry me a river, “Public Employee” LEECHES!
It seems like they could at least get the name of the town right; it’s Prichard, not Pritchard. Even though I was argued with on a previous thread about this, Prichard has been broke for a long, long time. Their problems preceded the current economic situation.
The unions know it. They don't care.
"Auditors say the New Jersey Turnpike Authority wasted $43 million on unneeded perks and bonuses. In one case, an employee with a base salary of $73,469 earned $321,985 when all payouts and bonuses were included."
"The audit says that toll dollars were spent on items ranging from an employee bowling league to employee bonuses for working on birthdays."
"All this took place while tolls were being increased."
"The biggest expense uncovered in the audit was $30 million in unjustified bonuses to employees and management in 2008 and 2009 without consideration of performance."
"One example was paying employees overtime for removing snow and working holidays and then giving additional 'snow removal bonuses' and 'holiday bonuses.'"
58 years old and the sorry sob could not work, bs
When its either Us or Them, I hope the media doesn’t think they can convince Us it should be Them.
The whole country is screwed. Idiots who watch TV and Hollywood’s crap support this collective mass brainwashing about a kindly youthful Mugabe from Hawaii and Chicago. ALL of TV and ALL of Hollywood support him including Fox where people have posted here that Fox is making fun of birthers.
Loads of conservatives think in 2012 the problem will be solved. Some idiots here bash LTC Lakin for standing up to Obama. Lakin is right he knows how bad this is gonna get.
As far as this old fire chief. Oh well - you retire at 50 and you take your chances. A relative has two retired fire guys from NJ who may be gay. They are probably in their late 40s. It “ain’t” gonna last.
It's a town that has lost one-third of its population in the past 25 years and is now 90% African-American with almost 40% of its households consisting of single mothers with dependent children.
It has almost no tax base.
Me, too. They should never have set up the 30 year & retire policy. Even for police & fire-fighters. The fact that you may be too old for a physically demanding job doesn’t mean you can’t find something else to do after that career. Retirement age for all public employees should be 65, & if you can no longer meet the demands of your current job, you move on to something else & collect the pension later.
I also think they should have to choose between pension & SS. That would partially solve another problem we’re going to have to deal with.
“The unions know it. They don’t care.”
They care.....about making their boat payments.
This is a start.
These government pension funds are as bad as Democrat newspapers. Stop with the drip drip drip already and just die, for crying out loud.
Just like any ponzi scheme...
No they are counting on it...top down, inside out...presto we are communist...
Why do pubic unions get paid pensions in their 50’s when the rest of us have to wait to 65.
Saays the fire marshall was 58. How long was he retired and how long was he drawing a pension?
That was my reaction too. Of course, being an ex-firefighter, he could have had a disability of some kind.
Taxpayers grab their ankles for both. What's the difference?
If that estimate of public pensions under funded by 3.6 trillion is like most government estimates I say it is at least double that in reality. We all know they have trued to hide the situation for years, this is most likely no different.
>We are out of money, and our many of our public pensions are already on borrowed time.<
You think this will affect the generous pensions of our congress critters or will they be allowed to slobber at the trough till the very end?
This is what is going to happen when those who have not saved for retirement are confronted by reality. And then they will come for the money that has been saved for retirement - where ever they can find it.
Powers of deduction seem to be destroyed. They have to know that one condition must drive another condition...hence:
broke government = can't pay the bills = no checks for pensioners...
...which seems to escape unions.
..when the unions start rioting here in America, I hope that normal people will not just put up with it....but actually push back.
I think SS should be means-tested. I know it’s not suppose to work that way, but we’re bankrupting that system, too. So if you have an adequate pension or means from some other source it only makes sense to limit SS to the needy.
I don't know what it is like now, but in California when my husband taught there 1961 to 1979 they did not pay into SS. So all they had was the teachers retirement.
You're on the wrong site.
Socialism is that way ----> to DUh. Have fun.
The goal of Ubama and the rats has always been to turn America into a fully unionized, socialist welfare state like France and many other countries of old Europe, where nearly everybody is essentially a government employee. Then, when "other people's money" runs out and some politician dares propose that the government-mandated work week be increased from 35 hours to 37 hours, or the government-mandated retirement age be increased from 55 to 58, the unions can go on strike and essentially close down the entire country - - until taxes are raised (yet again). Rinse and repeat.
“I think SS should be means-tested. I know its not suppose to work that way, but were bankrupting that system, too. So if you have an adequate pension or means from some other source it only makes sense to limit SS to the needy.”
That’s another step to penalize success and initiative.
If some decide to “voluntarily” give back their benefits, that would be his or her decision and not the gumint’s.
Do not be so certain about that especially for the rank and file. It is a matter of faith among many union members that the company is keeping two (or more) sets of books. The Union leaders see things through a very blinkered ideological lens.
I wonder why they don’t regulate them like they do private pension plans? My husbands plan has to by law (federal/state) and it’s own by laws keep large reserves they actually have to be funded. They actually changed the rules this year including the age, amounts, etc. because of the downturn.
I suppose it’s a political trick for government employee’s pensions because they would then have to come up with real money they couldn’t touch to fund them and people would know the true cost.
Congress does play a role in this the Democrat’s allowed some private companies exemptions to the funding and I suppose we will get stuck with the bill when those plans fail. That’s going to be tough because...
Pension Insurance Agency Reports $23 Billion Deficit
“When Mr. Grafmeyer was Greyhound’s lobbyist, he helped to secure the sponsorship of Representative Charles B. Rangel, Democrat of New York, for a provision letting Greyhound treat its pension plan as 90 percent funded, even if its assets fell to just 85 percent of future obligations.
Normally, a pension plan that dips below 90 percent for an extended time is considered underfunded, and the company must make special, accelerated contributions.”
Our government should not have been allowed to steal the social security funds either wait until that comes home to roost.
I think SS should be means-tested.
You’re on the wrong site.
Socialism is that way ——> to DUh. Have fun.
No, SS is actually socialism. When was the gov’t supposed to involve itself in our retirement accounts? If you get out more than you pay in (aside from capital gains such as you would receive if your investment went up in value)you are receiving wealth from someone else. The Dems have resisted calling SS welfare, but that’s what it is. It’s time to stop the lying & treat it that way.
My post on the previous thread was pretty much what you posted:
“I dont know if Prichard is a good example of what is happening in other cities. Prichard has been broke and on the border of bankruptcy for a long time. It is probably 95% black and is and has been riddled with corruption for years. The crime rate is outrageous and it has virtually no tax base.”
Someone, I don’t remember who, didn’t get my point that this is not new for Prichard. In my opinion, the current economic situation, which is the cause of the problems with a lot of other cities, isn’t causing Prichard’s problems. I think they were so far gone already that they weren’t necessarily affected by this recession. I believe our black population estemates may be a bit high. I think it’s more like 85% black as they have annexed some outlying areas some which actually have an upper middle class white populaiton. It wasn’t nearly enough to save them, though.
The only way to retire from life is to go to a better life, in Heaven!
No amount of money can spare anyone the hazards of living in a society with no regard for life.
Here come the government employee sob stories..
Tell these SOB the private sector has been going through this for **YEARS** now....
Thats another step to penalize success and initiative.
If some decide to voluntarily give back their benefits, that would be his or her decision and not the gumints.
No, SS isn’t a result of anyone’s success or initiative. The gov’t took our money & pretended to put it in a lock box. What we get back is usually far more than what we put in. It is actually redistribution - this time from the young to the old. Time to stop the nonsense. The only way to do that is force people to realize what it is & then start dismantling it. Means test & privatize.
Government employees are robbing and gang raping the American private sector
Means test & privatize.
Are you trying to make my head explode? How do you reconcile those two?
The benefit you receive from SS is based and projected on the income you made while contributing to the system.
You are suggesting people who did well in their work and careers and have other resources should forgo their SS benefits by means testing. That penalizes success.
I’m all for privatization for future retirees...
58? Why can’t a 58 year old man work? I mean no offense to him, maybe he was sick, but it’s not like an 85 year old sitting in an unheated home.
Most of my family worked/is working well past 65, and some are not in the best of health, either. But they still work.
I will use myself as an example. According to my most recent statement from SS, I paid in $51,394 which was matched by my employer for a total of $102,788. Members of my family generally live well into their 80’s. Assuming I start collecting SS at age 62 & live until 85, receiving my estimated monthly benefit of $1,100(actually $1,138 on the statement), I will receive back $303,600 (23 years x 12 months x $1,100).
Privatize for everyone coming into the system now, or those relatively young. Means test for those currently in the system or about to retire (so the truly needy don’t end up naked in the street) & let those of us with state pensions or fat 401k’s take care of ourselves.
Now that wasn’t difficult, was it?
Thats some of the rank and file. Who are the unions?
The rank and file? They havent a clue as to whats going on (save the goons and the thugs). Who are the unions?
The rank and file have their heads stuck where the sun dont shine (the ones who arent goons).
It is a matter of faith among many union members that the company is keeping two (or more) sets of books.
Thats what the rank and file tell themselves when they dont want to think very much about it. Thats what the leadership tells them to cover their criminal activities.
The Union leaders see things through a very blinkered ideological lens.
The Union leaders, and their goons, will embrace the ideology that brings them the most power.
What happens if Social Security is means tested based on pensions and then pensions are cut?
Doesn’t say what he died of...did he flunk his death panel?
What the h*ll was he doing retired at 58? The vast majority of private sector people, who PAY for his retirement, can't retire at 58. They need their money in order to retire some day themselves.
I have been paying roughly $14,000 per year into the Social Security "lock box" for 20 years so that I can start withdrawing my Social Security when I retire. Give me back what I was forced to pay into the ponzi scheme system. Federal government employees on the old retirement plan never paid, and don't currently pay, a penny into Social Security so it is a retirement system, not a tax to help others. Otherwise all would be required to pay into it.
Obviously it still is for you. You don't understand interest and compounding. Please read up on it a little.
Slowly but surly, the private sector tax payers are becoming wise to the tens of thousands of these government payroll prostitutes who forgot long ago who the hell they're working for...
The private sector peasants are tired of being robbed and gang raped by government
The rank and file have nothing to do with “the unions”...it is the people in charge of the unions and others that are pulling their strings that are “counting on it”...
The union members are just cannon fodder to these miscreants, a convienent tool to use and discard.