Kentucky passed Repub version of pension reform: The state will now keep 15% of any investment gains

[JEDI]

https://www.sfgate.com/news/politics/article/Kentucky-lawmakers-resurrect-pension-bill-12791651.php

new hires would be moved to a hybrid plan. They would be guaranteed to get back all of the money they and taxpayers contributed to their retirement accounts, plus 85 percent of any investment gains. The state would keep the other 15 percent.


WtfBBQ?!?!
this is the genius idea from Repubs to fix the worst funded pension in the US?
to steal from future workers?
and it does nothing to address the state's current massive debt because those workers aren't going to retire for decades.

wtfbbq indeed

Title changed to reflect reality.
admin allisolm

 

[Sunburn74]

lol. isnt this basically theft?

 

[brycejones]

lol. isnt this basically theft?

This will ensure the state can help jerb creators more.

 

[MomentsofSanity]

They aren't keeping 15% of what you invest. They are essentially making a 15% capital gains tax on pension accounts.

 

[brycejones]

They aren't keeping 15% of what you invest. They are essentially making a 15% capital gains tax on pension accounts.

Yes, and it is still shitty. Imagine if your 401k took 15% of the gains as fees. Would you put up with that?

 

[pauldun170]

Rand Paul and Mitch McConnell's home state.

After more than three hours of debate, the House approved the bill 49-46 and sent it to the Senate, where debate began within minutes.

No actuarial analysis has been done on the bill, as required by law, so its fiscal impact on the state’s pension systems is unclear.

Sounds bout right for Republicans

 

[Chromagnus]

This is what happens when you promise people future money and can't deliver on those guarantees. Politicians have been kicking this can for years and now they are trying to screw over new teachers coming in.

I wonder how long before public pensions are completely gone in this country because they are obviously not sustainable.

 

[Genx87]

Yes, and it is still shitty. Imagine if your 401k took 15% of the gains as fees. Would you put up with that?

What do you think the fed govt does when we cash in a 401k? It could actually worse because it is taxed at current income tax rates.

 

[SMOGZINN]

Won't this just make the problem worse as there is basically no chance that they will be able to make gains above inflation?

 

[Genx87]

Won't this just make the problem worse as there is basically no chance that they will be able to make gains above inflation?

They are taking 15% of the gains, not raw. This is just a capital gains tax on a state pension.

 

[Chromagnus]

What do you think the fed govt does when we cash in a 401k? It could actually worse because it is taxed at current income tax rates.

I'm definitely not a pension expert, but aren't pensions already taxed? When I do a quick google search it looks like pensions are taxed as income, except for portions that are contributed to by an individual on an after-tax basis. So your comparison doesn't really seem like it holds up.

 

[thraashman]

What do you think the fed govt does when we cash in a 401k? It could actually worse because it is taxed at current income tax rates.

But they'll still have to pay taxes on that money at the federal level. The Kentucky state income tax ranges from 2% - 6%

 

[boomerang]

The outrage is pretty much wasted because the pension system is still going to collapse, it's just a matter of when. It says right in the article that this plan saves $300 million over the next 30 years but they will still be $41 billion short over that same time frame.

Imagine the outrage when the system reaches critical mass. It won't be safe to be on the streets. Libs had better start planting magic money trees by the thousands. Better plant them across the nation because a lot of bills are going to come due. The pyramid schemes are crashing and burning.

 

[Chromagnus]

The outrage is pretty much meaningless because the pension system is still going to collapse, it's just a matter of when. It says right in the article that this plan saves $300 million over the next 30 years but they will still be $41 billion short over that same time frame.

Imagine the outrage when the system reaches critical mass. It won't be safe to be on the streets. Libs had better start planting magic money trees by the thousands. Better plant them across the nation because a lot of bills are going to come due. The pyramid schemes are crashing and burning.

Pensions are definitely dieing but when the answer to that is "fuck over new teachers" people are going to be pretty upset. The optics of keeping 15% of their growth to pay for the past mistakes of the Kentucky government looks pretty bad.

 

[brycejones]

What do you think the fed govt does when we cash in a 401k? It could actually worse because it is taxed at current income tax rates.

This is effectively another 15% on top of what the feds take. You pay income tax on pensions.

 

[MomentsofSanity]

I'm definitely not a pension expert, but aren't pensions already taxed? When I do a quick google search it looks like pensions are taxed as income, except for portions that are contributed to by an individual on an after-tax basis. So your comparison doesn't really seem like it holds up.

They are taxed at your ordinary income rate when distributed but that would normally be at a lower rate assuming your rate upon retirement is less than your rate now. Unless of course you lump sum it out. That also assumes no after tax contributions being involved.

 

[brycejones]

The outrage is pretty much wasted because the pension system is still going to collapse, it's just a matter of when. It says right in the article that this plan saves $300 million over the next 30 years but they will still be $41 billion short over that same time frame.

Imagine the outrage when the system reaches critical mass. It won't be safe to be on the streets. Libs had better start planting magic money trees by the thousands. Better plant them across the nation because a lot of bills are going to come due. The pyramid schemes are crashing and burning.

The problem with state pensions cross party lines over many decades. Instead of being fiscally responsible and paying for them as they are accrued many state governments have elected time and time again to pass the buck further down the line. As you point out this step doesn't even being to address the problem. Sounds like Kentucky needs to start kicking in another 750 million - 1 billion per year now to shore up their pension plan. The faster they start paying more in the quicker the unfunded liability will shrink and the overall amount the tax payers of Kentucky have to come up with will be less.

I would also like to point out these teachers are not eligible to draw social security based on their time as teachers.

 

[boomerang]

Pensions are definitely dieing but when the answer to that is "fuck over new teachers" people are going to be pretty upset. The optics of keeping 15% of their growth to pay for the past mistakes of the Kentucky government looks pretty bad.

It's not an answer and the math proves it out. The 15% is a drop in the bucket towards "past mistakes". Its impact is close to immeasurable.

We had a thread here railing on about Trump running up the national debt by a shit-ton. The usual suspects were all in a rage. The Omnibus spending bill passes and Democrat causes are the big winners but it runs up the debt by a shit-ton more. All I heard was crickets. There wasn't even a thread about the Omnibus bill.

Outrage when it suits them, silence when it suits them. But that doesn't matter. We're insolvent from sea to shining sea and borrowing like there is no tomorrow.

There is a tomorrow and it's barreling towards us.

 

[brycejones]

They are taxed at your ordinary income rate when distributed but that would normally be at a lower rate assuming your rate upon retirement is less than your rate now. Unless of course you lump sum it out. That also assumes no after tax contributions being involved.

401k withdrawals at retirement are also generally taxed as normal income. Just pointing this out in case someone is confused.

 

[brycejones]

It's not an answer and the math proves it out. The 15% is a drop in the bucket towards "past mistakes". Its impact is close to immeasurable.

We had a thread here railing on about Trump running up the national debt by a shit-ton. The usual suspects were all in a rage. The Omnibus spending bill passes and Democrat causes are the big winners but it runs up the debt by a shit-ton more. All I heard was crickets. There wasn't even a thread about the Omnibus bill.

Outrage when it suits them, silence when it suits them. But that doesn't matter. We're insolvent from sea to shining sea and borrowing like there is no tomorrow.

There is a tomorrow and it's barreling towards us.

It must suck trying to keep your trolling straight. Whining about the debt while advocating for tax cuts that cause the debt to grow.

 

[SMOGZINN]

The Omnibus spending bill passes and Democrat causes are the big winners but it runs up the debt by a shit-ton more. All I heard was crickets. There wasn't even a thread about the Omnibus bill.

Complete Bullshit. The majority of the increase in spending introduced in the Omnibus bill went to the military, a Republican priority.

 

[Thump553]

Complete Bullshit. The majority of the increase in spending introduced in the Omnibus bill went to the military, a Republican priority.

Plus the real problem with balancing the budget is the "borrow the max so we can cut taxes on corporations and the richest" tax cut law-a pure GOP project.

Sorry fella but the total blame for wrecking the budget falls on the GOP and is purely because of them.

 

[Jhhnn]

It's not an answer and the math proves it out. The 15% is a drop in the bucket towards "past mistakes". Its impact is close to immeasurable.

We had a thread here railing on about Trump running up the national debt by a shit-ton. The usual suspects were all in a rage. The Omnibus spending bill passes and Democrat causes are the big winners but it runs up the debt by a shit-ton more. All I heard was crickets. There wasn't even a thread about the Omnibus bill.

Outrage when it suits them, silence when it suits them. But that doesn't matter. We're insolvent from sea to shining sea and borrowing like there is no tomorrow.

There is a tomorrow and it's barreling towards us.

The wealthiest Americans aren't insolvent- they're richer than ever after nearly 40 years of Reaganomics. And it's not just Americans, either, given that 35% of US equities are foreign owned. The financial elite went multinational a long time ago.

So if Americans are dumb enough to keep voting the guys at the top a bigger piece of the pie they'll obviously let us do that, even encourage it. Hell yes they will & that's what the GOP is all about, the ideology of glorious greed at the top.

Tomorrow? The GOP vision for tomorrow is for very, very many to have very, very little so that a very, very few can have so very, very much.

Given past performance, it seems clear that many GOP voters may never catch on.

 

[JSt0rm]

A tax on millennials so baby boomers can be comfortable.

 

[hal2kilo]

Results of years of promising tax cuts no matter what, both parties to blame. Although, one of them has it as there main political agenda.