Posted on 07/09/2015 5:27:25 AM PDT by SeekAndFind
When Jim Palermo was serving as a trustee of the village of La Grange, Ill., he noticed something peculiar about the local police officers and firefighters. They were not going to live as long as might be expected, at least according to pension tables.
After Mr. Palermo dug into the numbers, he found that the actuary — the person who advises pension plan trustees about how much money to set aside — was using a mortality table from 1971 that showed La Grange’s roughly 100 police officers and firefighters were expected to die, on average, before reaching 75, compared with 79 under a more recent table.
The four years are significant beyond any interest in macabre statistics. When actuaries calculate the numbers for a pension plan, mortality rates are a powerful hidden factor. If an actuary predicts the workers will live to an old age, it means they will be drawing their pensions for more years. That, in turn, means the employer should set aside more money up front, to keep from running out later.
Assuming shorter life spans reduces annual contributions and frees up money for other things, like bigger current paychecks. And if the plan bases pensions on pay, as those in most American cities do, shortening the workers’ life spans on paper could lead to both fatter paychecks now and bigger pensions in the future. In La Grange’s case, those four years meant tens or hundreds of thousands of dollars to each retiree.
But if more workers are retiring and not dying on schedule, it can be a recipe for financial disaster.
(Excerpt) Read more at nytimes.com ...
Reason #6,748 to move public pensions to defined contribution.
Well, huh. This situation has been known for quite a while, but it’s suddenly getting a lot more press. I wonder why?
RE: I wonder why?
GREECE and PUERTO RICO ( and soon, CHICAGO ), that’s why.
And let’s also not forget DETROIT.
Because more and more cities will be filing for bankruptcy as baby boomers retire and start to collect on unfunded public pensions.
The Baby Boomer Bomb is exploding.
We Boomers obstinately refuse to die.
Google “Theresa Ghilarducci” and you’ll see what their plan is.
When the correctional officers negotiated pensions equal to the CHP in California, they cited 2 years as the after retirement life expectancy. Doesn’t seem right, but don’t have the actual number.
The way it works here is that they tie pay and retirement to other departments like salary to be equal to the 5 highest PDs in the state. So it’s a chain faction. One or a few get a raise or pension plan everyone else goes up with them. That’s what happened 10 years ago with pension 3% at age 50 times the years of service up to 90% of salary.
They've got some more things they want to do that they normally wouldn't get to, so they need a good crisis. They've had this one simmering on the back burner long enough for it to be ready to put on the table.
That and they didn’t have enough kids to replace them and pay into the system.
The same thing will happen to 401k plans. When more people are pulling out of the market than putting in, it will collapse.
Retirement is a recent thing. In most of history, you did not retire.
In CA, most of the kids replacing the boomers are 3rd worlders and won’t be as financially successful as the boomers they replace.
The Baby Boomer Bomb is exploding.
We Boomers obstinately refuse to die."
Not to worry, that's why they passed ObamaCare - reducing MediCare and Social Security expenses at the same time. Brilliant!
Used to be people retired to die. Or to go live with their grown children and annoy them for a few years, such as "Grandpa Walton" from that TV show of the 1970s.
Most people can easily work through their 70s these days.
That's exactly where the Left is going. If it happens, that is going to produce a lot of very angry people, and a lot of decorated lamp posts.
Dim math.
Gibmedat now. Charge it to future generations.
Laissez les bons temps rouler.
“The way it works here is that they tie pay and retirement to other departments like salary to be equal to the 5 highest PDs in the state. So it’s a chain faction. One or a few get a raise or pension plan everyone else goes up with them. That’s what happened 10 years ago with pension 3% at age 50 times the years of service up to 90% of salary.”
And now you know why the union loves the minimum wage increase. Most union contracts are tied to it so if the state minimum wage goes up, their contracts are adjusted to reflect that.
Retirement is a recent thing. In most of history, you did not retire.
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An exception, the Levites serving the Temple, were mandated to retire, at age 50.
Most union contracts are tied to it so if the state minimum wage goes up, their contracts are adjusted to reflect that.
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I worked under U.A.W. contracts for over 30 years and never saw such a contract.
Public employees well above that
Reirement was your children caring for you for those few weeks or months between your no longer being able to work ans your death.
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