Who is responsible for the pension crisis?

[mizzou]

Pensions were not structured to cope with the rapid rise in life expectancy due to advances in medical care, so nobody is to blame. Over the course of a single working career in the late 20th century, life expectancy increased by about 15 yrs. This was impossible to foresee. You don't collectively punish a whole generation of people for collectively failing to foresee this, particularly since they based their entire retirement strategy off a promised benefit. You find some balance to mitigate the problem the best you can until they die off.

That is a very true statement and part of the reason why medicare eligibility ages keep increasing.

60 is the new 40! 😀

 

[hal2kilo]

To answer the actual op question. Corporate profit maximisers, and tax cutters in state houses.

 

[Mxylplyx]

A good pension is a sign of a first class civilized country. If we fail to take care of our elderly, we can all go fuck ourselves.

No S.S., no medicare, no pension, no love. Yes, we can all go fuck ourselves over our selfishness.



Obviously a little exaggerated there, but I think it should be clear to all of us that we continuously have a "mine, not yours" attitude that is going to bite the younger generation in the ass when they get too old to work but not too old to retire.

The filthy rich would like nothing more than having an old man with no government benefits cutting their lawn because he couldn't afford to retire. They get their lawn cut for cheap, and they also get to wag their fingers at the old man for not living responsibly and fully funding his retirement during his long and prosperous lawn cutting career.

 

[Fern]

Pensions were not structured to cope with the rapid rise in life expectancy due to advances in medical care, so nobody is to blame. Over the course of a single working career in the late 20th century, life expectancy increased by about 15 yrs. This was impossible to foresee. You don't collectively punish a whole generation of people for collectively failing to foresee this, particularly since they based their entire retirement strategy off a promised benefit. You find some balance to mitigate the problem the best you can until they die off.

Life expectancy is tracked closely and the actuarial data freely available. The real answer is simply that pensions have not been adequately funded. This has been known for a long time. Now that workers are retiring and there's too little available in the plan people are acting surprised. That's straight up bull shit. It's long been known. In fact, in many cases the various govt entities purposefully passed law specifically allowing them to underfund their pension obligations. I.e., they went out of their way to create this problem.

Edit: Subyman's linked article is a good example of this. It's from 25 years ago and speaks to the problem of cutting contributions etc.

Fern

 

[Moonbeam]

Global warming is to blame.

 

[hal2kilo]

Life expectancy is tracked closely and the actuarial data freely available. The real answer is simply that pensions have not been adequately funded. This has been known for a long time. Now that workers are retiring and there's too little available in the plan people are acting surprised. That's straight up bull shit. It's long been known. In fact, in many cases the various govt entities purposefully passed law specifically allowing them to underfund their pension obligations. I.e., they went out of their way to create this problem.

Edit: Subyman's linked article is a good example of this. It's from 25 years ago and speaks to the problem of cutting contributions etc.

Fern

My goodness, I agree with your accessment.

 

[Fern]

I was under the impression money came out of the worker's pay check to pay into their pension. I think the problem is that politicians have raided those funds and now we have no way of paying them back.

I've never seen nor heard of an employee contributing to a pension plan (and by "pension plan" one means a Defined Benefit Plan). It's legally permitted, but I've never seen it:

Employers are normally the only contributors to the plan. But defined benefit plans can require that employees contribute to the plan, although it's uncommon.

https://us.axa.com/retirement/understanding-defined-benefit-plans.html

Plans that employees contribute to are virtually always Defined Contribution Plans and the employee portion is, under law, actually owned by the employee. The employer cannot take those funds. Conceptually there are ways, but it requires the employee's consent (employee has to voluntarily give it over) and some legal structuring. I've heard of only one case of this.

Fern

 

[Fern]

One of the biggest problems for private pensions is outsourcing. Pensions always have depended in part on current contributions to pay pensioners. So when GM outsources production pension payouts remain static or go up while contributions fall off. It's the same wrt govt privatization, as well.

The demographics of the baby boom have a similar effect on SS.

No.

As I linked above, pension are funded by employers, not employees. So, I don't see how outsourcing has any negative effect. Presumably the company is outsourcing for a greater profit. Thus it can more easily pay the requisite amount into the plan. Additionally, it will have a smaller funding obligation as foreign workers won't participate and thus no need to pay in by the employer.
----------------

Basically this issue is about govt sector pension plans. They make up their own rules on funding. There are damned few private sector pensions these days and they, unlike the govt, can't make up their own rules on funding. The rules they operate under are enacted by the govt and designed to ensure they aren't underfunded. This is because the govt, under the PB&GC, must step in and pay some benefits when a plan/corporation goes under.

Fern

 

[IronWing]

I've never seen nor heard of an employee contributing to a pension plan (and by "pension plan" one means a Defined Benefit Plan). It's legally permitted, but I've never seen it:



https://us.axa.com/retirement/understanding-defined-benefit-plans.html

Plans that employees contribute to are virtually always Defined Contribution Plans and the employee portion is, under law, actually owned by the employee. The employer cannot take those funds. Conceptually there are ways, but it requires the employee's consent (employee has to voluntarily give it over) and some legal structuring. I've heard of only one case of this.

Fern

My defined benefit pension plan is split between employee and employer contributions. However, it is really a matter of semantics. Whether an employer includes the funds in an employee's salary then withholds it for contribution to the plan or the employer pays into the plan directly, the contribution is still an agreed benefit paid in exchange for work.

 

[LegendKiller]

Politicians.

 

[LegendKiller]

Well, Wall Street certainly helped themselves to some hefty profits on the backs of taxpayer-backed pension funds:

http://nyti.ms/1Fkbm8J

So the fees took up all performance ahead of the benchmark performanCe. Thus, the funds met return targets and should be doing well enough to meet required distributions. No?

 

[Zorkorist]

Fucking Government Employees, are making out like bandits. This means you, school teacher, cop, fireman, garbage man.

They are retiring after 20 years of "service" and claiming extraordinary benefits.

Ridiculous, when you compare it to a normal working man or woman in the private sector.

-John

 

[Zorkorist]

It's all fake money... but they get more of it than we do.

-John

 

[nickqt]

Fucking Government Employees, are making out like bandits. This means you, school teacher, cop, fireman, garbage man.

They are retiring after 20 years of "service" and claiming extraordinary benefits.

Ridiculous, when you compare it to a normal working man or woman in the private sector.

-John

All those damn union thug school teachers earning so much money! Same with garbage men.

Let that jealousy out, communist.

 

[Zorkorist]

LOL, reread your message. I am jealous. I will never have the benefits a school teacher has in retirement.

I'm very educated, and have worked hard, six days a week my entire life.

Yet a kindergarden teacher, is going to have a beautiful Government pension, that I will not have.

-John

 

[Zorkorist]

She does it with fake money, money the Government doesn't have.

A debt upon society totaling some 18 trillion dollars today.

-John

 

[Mai72]

NJ has a looming pension crisis. We have the highest property taxes in the nation, and they are expected to increase even more. I have a friend in North Jersey whose paying nearly $10k in taxes, and he's beside himself.

We have police officers who are going to be on their pensions for 30 years. That's an awfully long time. Multiply that by thousands and you can see why NJ has a serious pension issue. Wait until we get the first wave of retires. We haven't seen anything yet. The fun is just starting.

 

[Zorkorist]

My retirement will be on my dime.

-John

 

[Zorkorist]

NJ has a looming pension crisis. We have the highest property taxes in the nation, and they are expected to increase even more. I have a friend in North Jersey whose paying nearly $10k in taxes, and he's beside himself.

We have police officers who are going to be on their pensions for 30 years. That's an awfully long time. Multiply that by thousands and you can see why NJ has a serious pension issue. Wait until we get the first wave of retires. We haven't seen anything yet. The fun is just starting.

Fuck the Government employees that think 20 years of service is good. Tell them they need to do another 20 years, and then we'll talk.

-John

 

[Mai72]

Fucking Government Employees, are making out like bandits. This means you, school teacher, cop, fireman, garbage man.

They are retiring after 20 years of "service" and claiming extraordinary benefits.

Ridiculous, when you compare it to a normal working man or woman in the private sector.

-John

I don't know where you are getting your info but teachers don't retire in 20 years. I know plenty of teachers who have retired in their 60s. They worked for 40 years as an educator before they could even think about retiring. My friend who is 65 would have stayed on as an educator but she would have taken a hit in her pension, so she decided to leave. Her husband who is a retired teacher substitutes at the local highschool 3-4 days a week. They aren't living the glamorous life.

Police officers are the only workers that I know who are able to retire after 25 years of service. And that's because of the age restrictions they place on officers. Would you really want a 60 plus year old officer chasing down a criminal?

Garbage men and city workers don't make out like bandits. In fact, in my county they have been hit the hardest when the government started to cutback on services. The average pay for a city worker is $9.50 an hour.

 

[Zorkorist]

How about firemen?

-John

 

[Zorkorist]

In Denver Colorado, school teachers are part of PERA, a union that pays them a hell of a lot of money, over time.

https://www.copera.org/

I have nothing like this. It's only Government employees today that have these crazy benefits.

It's all fake money, but they are getting a lot more than I am.

-John

 

[Mai72]

How about firemen?

-John

I believe they fall in the same group as the police officers. They have to put 25 years of service before they are eligible for retirement. There are age restrictions that the state has to adhere to. You want young capable people able to do the job. You don't want a 60 year old fireman running into a burning building. He puts himself and everyone else at risk.

This pension fiasco has gotten a lot of people upset. We are already starting to see a few changes. The age that a police officer is able to retire is going to go up by 5-10 years. It's ridiculous that a police officer can retire before they even reach 50. They are going to have to contribute more into their pensions as well.

IMO, they should do what they post office did in the 1980s. Move new recruits into a 401k plan. Take the burden off the taxpayers. To be honest, in NJ the majority of our taxes go to the school districts. We have a school district for every city. They could easily be combined and this would save the taxpayers money as well.

 

[Mai72]

In Denver Colorado, school teachers are part of PERA, a union that pays them a hell of a lot of money, over time.

https://www.copera.org/

I have nothing like this. It's only Government employees today that have these crazy benefits.

It's all fake money, but they are getting a lot more than I am.

-John

Well how long do you think before it all comes crumbling down? Don't you think most people are getting upset? I see major changes looming. It might take a few decades, but I see them coming.

 

[nickqt]

In Denver Colorado, school teachers are part of PERA, a union that pays them a hell of a lot of money, over time.

https://www.copera.org/

I have nothing like this. It's only Government employees today that have these crazy benefits.

It's all fake money, but they are getting a lot more than I am.

-John

Yes, corporations never pay executives millions of dollars when they retire. Just evil gub'mint teachers.