I suspect the "solution" will be a combination of raising taxes and cutting benefits. The question I have is how much of each?
South Carolina Ping 
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Posted on 09/05/2016 12:40:03 PM PDT by Lorianne
Billions in unfunded obligations in the South Carolina pension funds for state and local government workers, teachers and police officers are “a freight train out of control,” a state representative said Tuesday.
The unfunded obligations of the largest of those pension funds, the S.C. Retirement System, are expected to grow by $1.4 billion over the next year, according to actuarial firm Gabriel Roeder Smith and Co.
That system serves more than 180,000 state and local government employees, including teachers. Another 134,634 retirees also are part of the system.
The Retirement System has about $24 billion in assets, according to the Retirement System Investment Commission. But the system has $16.8 billion in unfunded liabilities — the difference between the amount the pension fund has to pay retirement benefits and the amount it has promised to pay. That red ink is expected to grow to $18.2 billion in the next budget year.
A group of state lawmakers held their first meeting Tuesday to try to come up with a way to meet the state’s unfunded pension obligations.
South Carolina has five pension funds for public workers.
However, the joint panel of state House members and senators will focus on just the two largest retirement systems — the S.C. Retirement System and the police officers’ retirement system.
The police officers’ pension system, created in 1962, serves state and local law enforcement agencies, including the State Law Enforcement Division, and the departments of Corrections and Juvenile Justice. However, the majority of officers in the system are from county sheriffs’ departments, said Public Employee Benefit Authority director Peggy Boykin.
The police pension system has about $3.9 billion in assets. An actuarial firm will project its unfunded liabilities in November.
Lawmakers will not look into three smaller pension systems — ranging in assets from $23 million to $140 million. Those systems cover judges and solicitors, National Guard members, and a generous system that benefits legislators, which is being phased out.
Funding for the pension systems comes from employer contributions, generally state or local governments; employee contributions that come from the worker’s paychecks; and earnings on those contributions, which are invested.
South Carolina’s pension systems are in the hole because of a number of factors.
Once limited to investing only in bonds, the pension funds’ investments in stocks have not been as lucrative as projected, earning just less than 5 percent a year over the last decade. In part, that is because the system bought stocks just before several down markets, including the late 1990s dot.com bubble and 2007’s Great Recession
SNIP
They’ll just raise taxes.
Can’t they just continue to Enslave Future Generations in Perpetual Debt to pay for their wants today??
When will political leaders who create and then not fund pension systems be arrested and charged? They sure as hell take in the employee contributions. This is the kind of crap Jimmy Hoffa went to prison for....misuse of pension fund money.
The solution is always take someone over 60 and cut their pension by 70% and blame them.
The bastards that cause this always skate right by untouched.
At least Hoffa got a good return on the loans he gave to the mob. Politicians just spend it!
People were offered those jobs and the pension was held out as a part of the compensation package. They did the work. They kept the faith. Now their pensions are declared an “unfunded liability” because politicians did not contribute the government’s proper portion into the fund.
Now people claim the workers are the bad guys.
>>When will political leaders who create and then not fund pension systems be arrested and charged? They sure as hell take in the employee contributions.
Well Said! No matter how fat the economy was, no ever told the workers that they didn’t have to pay into the fund. But the politicians looked at a couple of good years in the stock market and started cutting back on the government’s contribution.
ping
It’s just as well I cashed out my 10 or so years and ate the penalties.
I was broke and it I was for a long while.
At best if I had stayed a state drone, I’d retire on half of what I couldn’t live on. I wasn’t a member of the in-crowd.
If you were in the in-crowd, things didn’t matter since good things would come sooner or later.
If you weren’t, things didn’t matter at all.
I’ve been in a good job for almost 4 years now and my 401k is worth almost double what my state retirement was.
If I’m still there next year, I will be amazed somewhat since we are slowly but steadily shedding people.
Eight years of near zero interest rates and skimpy stock dividends didn’t help matters.
Seniors have been absolutely decimated with their private money because of ZIRP nonsense as well.
The pensions were never properly funded. That goes for Socialist “Security” and Medi”care” also.
South Carolina would have to throw in an extra $4 billion a year for 30 years or more to get their pensions close to fully funded. Not going to happen. Have to lay off 30-35% of current employees. Not going to happen.
U.S would have to in 2016 raise retirement age to 72.5 to be able to fund both Socialist “Security” and Medi”care”. Not going to happen.
What is going to happen is a crisis, between 2020 and 2028, when in the U.S., Canada, Western Europe, Australia, New Zealand and Japan, everything comes crashing down. Between 2016 and then, it’s all pretend and extend.
What can’t go on forever won’t go on forever. WW3 may intervene. Trump won’t be the one to start it.
These "leaders" should get the rest of the Hoffa treatment, IMHO.
Long sitdown with my girlfriend’s two offspring within the past month. FWIW, I’ll pass it along. 1) become a muni bond analyst, and pay attention to bankruptcy court rulings that affect your field. 2) focus on the interaction between federal pension law and municipal finance 3) enjoy a long and profitable career, because we’ve screwed it up, and no one can undo it without the consent of future generations.
Where”s that bitch, Baby Lindshay ???
It comes down to the reality of defined benefit vs defined contribution. One is un-affordable and unsustainable unless the market never goes down and the risk is the employers. The other plan will work, the risk is on the worker, but you retain control of your money. The other plan is subject to risk of the business going under, or plan rules that takes your money when you die leaving the family with nothing.
Letting the government run the system is a ticket to financial disaster as the huge pot of dough is more than honest people can tolerate just sitting there doing nothing. What they don’t understand is the time value of money and compound interest. They only understand SPENDING.
If truth and honesty prevailed and Government was taking only what it needed everyone in this country would be wildly wealthy if they didn’t spend it on booze, pets, cigarettes, women, gambling, drugs, and other assorted dead ends.
Pension funds are the ultimate “dumb money”. They don’t buy stocks until they are convinced they will always go up (so by that time most of the upward move has already been achieved) and then they sell in a panic when the markets crash since they need the money.
They could do away with TERI if it isn’t already on the way out.
A few parasites are doing real well on it.
I suspect the "solution" will be a combination of raising taxes and cutting benefits. The question I have is how much of each?
South Carolina Ping
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TERI is well on the way out.
I’m glad.
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