Skip to comments.Pandemic of pension woes plagues our nation
Posted on 08/05/2013 2:58:34 PM PDT by SeekAndFind
Detroit, you're not alone.
Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole.
A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement.
Thanks to a patchwork of accounting practices and rosy investment assumptions, it's not even clear just how big a financial hole many states and cities have dug for themselves. That may soon change, thanks to a new set of government accounting standards that could serve as a nasty wake-up call to states and cities relying on rosy scenarios and head-in-the-sand accounting.
Even less clear is who will pay to clean up the messes. Will it be the millions of retirees owed trillions of dollars in benefits, the bondholders who lent states and cities trillions more, or local taxpayers who may have to pay more to cover the shortfalls or see deeper cuts in public services?
Regardless, the painful process will likely play out for years.
"Moving pension plans is like steering a blimp: You turn the wheel and you go 6 miles before it starts to turn," said John Tuohy, Arlington County, Va., deputy treasurer, who chairs the pension committee of the Government Finance Officers Association. "In the political process, that kind of patience is very difficult."
(Excerpt) Read more at finance.yahoo.com ...
I would prefer to save the pensions by cutting them. I don’t want them eliminated, just like I wouldn’t vote to eliminate Social Security (in the short term). Too many elderly people are dependent on it.
It’s pretty clear that many states have promised more than they can afford. Do you cut existing services so that you can continue to pay ridiculously generous pension payments to retirees? It’s either settle for less or get nothing. That’s the choice facing many government pensioners in the near future.
The best thing to do is to eliminate pensions altogether and incentivize the system so people may be able to support themselves until they die. Even if it meant moving a person down the food chain, and pay, to account for their gradual reduction in abilities over time.
They want their money. . .go get it from the Democrats. . .oh, wait. . I forgot. . THEY SPENT IT ALREADY. .I know, go get it from the kids. .they voted for Obama. . SO MAKE THEM PAY FOR IT!!. . I have no sympathy for pensioners who retired at 55 with FULL PAY plus regular scheduled raises and cost of living adjustments. Now there is no money..and they want to whine and make the taxpayers pony up while they KEEP VOTING FOR for criminal Dems. .
Promises made to workers by criminal politicians for votes, so this is thier fault?
When you extorted your unjustifiable contracts, you didnt care about the Taxpayers that will be forced to pay for your salary and benefits that is more, and better, than theirs, no
You said: Either give me what I want, or I will hurt you.
I will GO ON STRIKE and I WILL HURT YOU!!!
NOT, If you dont give me what I want, I will quit, and get a different job NO!
It was, GIVE ME WHAT I WANT OR I WILL HURT YOU!!!
You were told over, and over, and over again, through the years, and extorted contracts, that it was unsustainable.
But YOU didnt listen, and YOU didnt care.
And the local government said OK, because there was nothing they could do, And, knowing it would be somebody elses problem down the road, well...
Well, guess what?
Its down the road, and now
its YOUR problem!!!
The trough is empty, and the teat is dry.
Can you hear ME now???
You were all fat dumb and happy as long as your snout was in the PublicTrough up past your eyeballs,
Now that the food level has dropped below Your eyes, even YOU can see the writing on the wall as well as the rest of us.
There WILL be reduced benefits to be sure, if not outright eliminations
And guess what???
I, DONT, CARE!!!
Are you asking me or the gutless politicians? Reminder: the largest voting block is the retirees. As the baby boomers continue to retire or try to, this block will continue to grow. We live in interesting times.
You reduce the public pension payments to the level that is affordable. This is the ONLY way we can stop or at least slow down national economic collapse.
In twenty years, the number of retirees will fall precipitously and that voting bloc won’t be as great.
I am only suggesting that baby boomers would be better off in the long-term to find a solution to this, even if it means taking a shave off their pensions then to not and have future generation who can fight back and showing about the same level of consideration that baby boomers showed them.
This is the crux of the problem.
No one should be able to collect more than ONE government pension (government being defined as local, state, or federal) They can choose which one they want to collect on or use the benefits from, but they can't have them all.
Pensions were meant to reward people who worked a LIFETIME at a job with security in their retirement.
And NO pension should pay more than half of the average they earned of the ENTIRE time they worked there, this will stop people working double overtime ect in their last year to artificially boost their pension for the rest of their lives.
This is a disaster of their own making; the elected moron "leaders" and the union no-limit greed types. The elected criminals know they will be long gone and (hopefully) forgotten when the day of reckoning arrives.
The greedy thugs will whine and threaten and scream that a contract is a contract!" Lost on them both is that once upon a time, any contract which is inherently impossible to satisfy is null and void. Viewing the taxpayer as a bottomless money pit is an assumption so asinine, ignorant and arrogant that it should be a felony!
Limit the "public service" employee union retirements to a few percentage points lower than the private market exact equivalent and force the incompetent and indolent to make do with what they are worth, or have real competency exams for every level of public service, including teachers.
There should be no such thing as a public pension. For one thing. Having different laws for the private sector than the public sector is wrong too.
Sorry we had to cut your pension in half, but here is a free house in Detroit.
MLM Pensions is out of gas
GeronL: “You reduce the public pension payments to the level that is affordable.”
I agree. In a free market, a union should be able to negotiate for whatever deals it can. However, government is not a free market. Government employees are public servants. They shouldn’t even have a right to form unions, much less collude with politicians at taxpayer expense.
The jig is up. Public unions have scammed taxpayers for years. Back when it seemed like we had a bottomless pool of money, it didn’t seem like a big deal. Well folks, the bill is coming due, and it’s more than most states can afford.
Voluntarily reduce public pensions now or slash ‘em in bankruptcy. It’s as simple as that.
and then give them a free home in Detroit.
No reason government should be owning property not used for a government purpose.
That’s what happens when you run out of other people’s money.
Here we go...
I would; but that's because I'm a heartless bastard.
(Or, rather, that I think continuing the extortionate ponzi-scheme [after all there is the threat of death or loss of liberty if you don't pay] in any way is grave injustice. The money is gone, and why? because the older generation[s] did not mandate it should be responsibly handled.)
At least partly: who trusts a politician?
It reminds me of James:
Come now, you rich people, weep and wail for the miseries that are coming to you. Your riches have rotted, and your clothes are moth-eaten. Your gold and silver have rusted, and their rust will be evidence against you, and it will eat your flesh like fire. You have laid up treasure for the last days. Listen! The wages of the laborers who mowed your fields, which you kept back by fraud, cry out, and the cries of the harvesters have reached the ears of the Lord of hosts. You have lived on the earth in luxury and in pleasure; you have fattened your hearts in a day of slaughter. You have condemned and murdered the righteous one, who does not resist you.Not an exact parallel, but there certainly is violence unjustly done to unresisting people by these unions… and fraud.
We have gone way too far down the road of providing compensation and benefits in the Public sector that are out of line compared to those in private employment settings, and it is unjust to heap a greater tax burden on the backs of lower-compensated private tax payers to fund bailouts of excessively compensated retired government employees. Ideally, anyway...
It is worth noting that one of the major reasons that pension plans are under funded (in addition to several other big ones) is that the current financial crisis - which is the result of crony capitalism/collaboration between large financial interests and the government - the current financial crisis has led the Federal Reserve to severely suppress interest rates on savings/pension investments. The Fed has thus helped to make pension plans insolvent, while at the same time providing huge subsidies to the big banks and to the speculator financial class that can borrow HUGE amounts of money for nothing due to the suppressed rates, and can place risky speculative bets all while having taxpayer backing in case those bets go bad. This amounts to a huge wealth transfer taking place at the expense of retirees and other savers...
The above applies to all pension plans -- private and public. There is another, even more important, reason why public pension plans are under-funded.
In negotiating public pension benefits, the unions have not insisted on appropriate funding levels. This allowed them to ask for higher benefits without costing their elected negotiating partners enough to harm their re-election chances.
It was a "win-win deal". Until the economy went belly up...
One reason I'd like to pass an amendment to the effect of:
Fiscal Responsibility AmendmentThat seems like it would effectively end the Fed, as well as solve our spending/debt problems.
The power of Congress to regulate the value of the dollar is hereby repealed.
The value of the Dollar shall be one fifteen-hundredth avoirdupois ounce of gold of which impurities do not exceed one part per thousand.
To guard against Congress using its authority over weights and measures to bypass Section I, the ounce in Section II is approximately 28.3495 grams (SI).
The Secretary of the Treasury shall annually report the gold physically in its possession; this report shall be publicly available.
The power of the Congress to assume debt is hereby restricted: the congress shall assume no debt that shall cause the total obligations of the United States to exceed one hundred ten percent of the amount last reported by the Secretary of the Treasury.
Any government agent, officer, judge, justice, employee, representative, or congressman causing gold to be confiscated from a private citizen shall be tried for theft and upon conviction shall:
a. be removed from office (and fired, if an employee),
b. forfeit all pension and retirement benefits,
c. pay all legal costs, and
d. restore to the bereaved twice the amount in controversy.
The federal government shall assume no obligation lacking funding, neither shall it lay such obligation on any of the several States, any subdivision thereof, or any place under the jurisdiction of the United States. All unfunded liabilities heretofore assumed by the United States are void.
The federal government shall make all payments to its employees or the several states in physical gold. Misappropriation, malfeasance and/or misfeasance of funds shall be considered confiscation.
Promises made to workers by criminal politicians for votes, so this is thier fault?
Lol, great point. In any case the haircut is coming. These pensions are not going to be paid out at these levels....it can’t be done. Reality will win out.