Who is responsible for the pension crisis?

[LegendKiller]

In most states, tax rates are at record lows and benefits are not going up. Politicians keep telling the people they can have the meal and then skip out on the check. If you want to offer lower pensions for future work, fine; workers will evaluate the offer and move on if they don't like it. But to try to welch on promised pensions already earned is fraud and theft. To fuck over workers because voters vote for any politician who promises lower taxes regardless of fiscal consequence is simply wrong.

Some of the states with the biggest shortfalls have the most unfavorable tax rates for corp and personal. They are also largely liberal states, closely tied to unions.


http://taxfoundation.org/article/2015-state-business-tax-climate-index

http://www.bloomberg.com/visual-data/best-and-worst//most-underfunded-pension-plans-states

You don't fucking get this. Politicians are cozy with unions, they promise whatever they can to get voted in. Taxpayers pay. You cannot keep forcing this issue further and further.

Look at IL. They are desperate to cut pensions and/or raise taxes. Everybody knows it is coming. Municipal bond analysts know it is coming. Rating Agencies know it is coming. Companies know it is coming. That's why they are downgrading, demanding higher coupons, and leaving the states. IL barely kept hold of CAT.

Look at Camden NJ. Police threw taxpayers under the bus by voting to lay off cops rather than accept pay cuts, contributions, and pension cuts.

This chicken is going to come home to roost.

 

[xeemzor]

Some of the states with the biggest shortfalls have the most unfavorable tax rates for corp and personal. They are also largely liberal states, closely tied to unions.


http://taxfoundation.org/article/2015-state-business-tax-climate-index

http://www.bloomberg.com/visual-data/best-and-worst//most-underfunded-pension-plans-states

You don't fucking get this. Politicians are cozy with unions, they promise whatever they can to get voted in. Taxpayers pay. You cannot keep forcing this issue further and further.

Look at IL. They are desperate to cut pensions and/or raise taxes. Everybody knows it is coming. Municipal bond analysts know it is coming. Rating Agencies know it is coming. Companies know it is coming. That's why they are downgrading, demanding higher coupons, and leaving the states. IL barely kept hold of CAT.

Look at Camden NJ. Police threw taxpayers under the bus by voting to lay off cops rather than accept pay cuts, contributions, and pension cuts.

This chicken is going to come home to roost.

So what's the end game in all of this? The creation of a poor elderly class? Are we going to see continued cuts in government services to pay for these ridiculous pension obligations?

Either way leads to a lot of pain for the nation. I don't see a good way out of the situation.

 

[LegendKiller]

So what's the end game in all of this? The creation of a poor elderly class? Are we going to see continued cuts in government services to pay for these ridiculous pension obligations?

Either way leads to a lot of pain for the nation. I don't see a good way out of the situation.

How about everybody fucking save some money rather than spending every dollar they have? Better yet, buy shit made in the USA to create more home jobs which stimulates local economy and then enriches everybody.

But nope, we gotta spend everything we have.

 

[fskimospy]

Some of the states with the biggest shortfalls have the most unfavorable tax rates for corp and personal. They are also largely liberal states, closely tied to unions.


http://taxfoundation.org/article/2015-state-business-tax-climate-index

http://www.bloomberg.com/visual-data/best-and-worst//most-underfunded-pension-plans-states

You don't fucking get this. Politicians are cozy with unions, they promise whatever they can to get voted in. Taxpayers pay. You cannot keep forcing this issue further and further.

Look at IL. They are desperate to cut pensions and/or raise taxes. Everybody knows it is coming. Municipal bond analysts know it is coming. Rating Agencies know it is coming. Companies know it is coming. That's why they are downgrading, demanding higher coupons, and leaving the states. IL barely kept hold of CAT.

Look at Camden NJ. Police threw taxpayers under the bus by voting to lay off cops rather than accept pay cuts, contributions, and pension cuts.

This chicken is going to come home to roost.

By your link they aren't largely liberal states, they seem to be split evenly between liberal and conservative ones.

 

[werepossum]

Ah, a FreeMarket™ worshiper.

People who worked for society rather than for themselves certainly did provide a lot to society, unlike the RiskTakers™ who generally took as much money out of society as they could.

Those damn selfish people who taught other people's children, fought other people's fires, and put on a uniform to defend their country. How dare we reward them for their underpaid efforts to society?

Besides, it's the RiskTakers™ on Wall St. who have given all of us so, so very much. They deserve so much more than union thug teachers.

Also, I realize y'all have to tie yourselves into knots on an hourly basis to defend your way of thinking, but within the span of a sentence you're confusing yourself.

Glad to see you are trademarking your stupidity. There are lots of stupid people willing to glam onto your hard work. This way, they'll be forced to think up their own stupid.

 

[nickqt]

Glad to see you are trademarking your stupidity. There are lots of stupid people willing to glam onto your hard work. This way, they'll be forced to think up their own stupid.

Hurr durr you're so stupid!

 

[werepossum]

Some of the states with the biggest shortfalls have the most unfavorable tax rates for corp and personal. They are also largely liberal states, closely tied to unions.

SNIP

Dude, by your Bloomberg link, three of the top five and five of the top ten are conservative states.

It's a stupid poll. Unfortunately, our MTV generations have learned to look for one simple answer to every problem and one simple villain for every bad thing. Life ain't so simple.

 

[blastingcap]

Red states are the welfare queens of the nation. They take disproportionately more from the federal government than other states, with few exceptions:

http://www.theatlantic.com/business...tates-are-givers-and-which-are-takers/361668/

 

[Pulsar]

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.

Bull shit.

People didn't suddenly wake up and start living 15 years longer. You don't need to 'foresee' anything. It was gradual, and the politicians didn't give a shift. They just ignored it and continued to agree to what the unions and other other workers wanted.

 

[JSt0rm]

Let me get this straight, we have the most unequal wealth distribution since the 1920s and you want to claim this is "normal." LOL. Stop being a 1% apologist. You do know that the personal income tax top rate was as high as 93%, just 50 years ago, right?

How about instead of pretending like today's massive wealth inequality is "normal," you stop giving tax breaks to the 1% in the form of tax loopholes, low personal income tax, and low capital gains tax?

As for pension reform, simply lower the pension benefit for new hires and cap the maximum pension via a progressive sliding scale.

Im not defending it. Im just saying what is true. The 1% tricked everyone into globalization for profits and now the standard of living is going down. As that standard of living slides the "enemy" becomes those people who haven't slid down the same levels. i.e. state workers who have a yearly raise based on inflation and their benefits.

This is the new reality. The genie is out of the bottle so to speak. This slide will continue until we have parity with other countries. This is what they want. No one in stem is safe at this point. You will find all of those jobs will come with lower pay to compete with those overseas.

At first they came for textile and factory workers and I said nothing...

 

[JSt0rm]

How about everybody fucking save some money rather than spending every dollar they have? Better yet, buy shit made in the USA to create more home jobs which stimulates local economy and then enriches everybody.

But nope, we gotta spend everything we have.

Once you get people to the point of paycheck to paycheck they cant afford to buy American to save themselves. They are just surviving at that point.

Also please dont blame the plebs for this. They are too stupid to know they are cooking themselves slowly. The guys at the top who work on wallstreet and have certain demands for companies and the guys who want to maximize personal profit to the detriment of anything else are to blame for this.

Reagan, bush and clinton (because he didnt have the balls to block nafta) are all to blame but the claws have sunk in and all politicians since have been on the same road. Talk about jobs out of one side of their mouth and then give their buddies all they need to ship jobs overseas.

Funny how the enemy now is some poor shlep who worked for the state for 40 years.

 

[Darwin333]

It isn't a question of "should" it's a question of "is it possible" and in our current political climate that is a huge no. No politician wants to be the asshole to raise taxes substantially or cut services substantially and give that money to a relatively small portion of the population.

So what are they going to do? They are going to do the same thing they have always done and punt. They won't start talking about taking serious action until the problem is impossible to fix, if it isn't already in some states.

 

[Vdubchaos]

45 Year old policeman is retired.

I want that job.

It's fucking sickening that some people take Government Money (My Money) and live a life of leisure.

It's fucking sickening that we are so in debt, that our sons and daughters will have to bow down to the debt holders.

Absolutely SICKENING!

-John

Sons and daughters? What about you?

You realize what our current debt is right?

yet they keep printing money and enable private entities control it.....

 

[Vdubchaos]

A 401K wasn't a pension to begin with I'd always thought.

News to me.

401k is a way for Government to convince us to spend our own money on our own pensions........while investing into stock market to furthermore support their buddies.

Knowing that Social Security will implode.....

They did a great job.

 

[Darwin333]

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

http://nyti.ms/1Fkbm8J

I'm sorry to tell you but that isn't Wall Street's fault especially not after 10 years. If it takes you 10 years and billions of dollars to figure out you aren't getting anything for those billions of dollars you really suck at your job.

 

[hal2kilo]

401k is a way for Government to convince us to spend our own money on our own pensions........while investing into stock market to furthermore support their buddies.

Knowing that Social Security will implode.....

They did a great job.

Definately was a prize for Wall Street. I love spending my last fews years of work wondering when I should pull the trigger to get back into cash before I lose another 35%.

 

[Darwin333]

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?

Can you explain to me how it is mathematically possible to employ someone for 25 years and continue to pay them to not work, including other benefits, for longer than they actually worked? Eventually you are paying far more people to not work than you are paying to actually work and the number of people getting paid to not work versus to work continues growing exponentially.

The law of exponents, a class that a fuckload of people in this country slept through, is a cruel bitch sometimes...


Not to mention that in a lot of states cops and firefighters game the system. Their pensions are based on their pay for their last two years of employment. So they save up all of their sick days and vacation days (which carry over every year and are legally owed to you) and cash them in during their last two years of employment. So a cop that normally made $70K a year can juice his income up to $120K for the last two years of his career and his pension payments (for the next 40+ years or so) are based on the $120K/year instead of his actual salary.

 

[Exterous]

I also thought teachers funding part of their own pension plan was common? I've heard this before, but the people telling me, although teachers, didn't seem very knowledge in how benefits worked.

In Michigan it is common for Teacher's to contribute as it is state law for teachers under a certain level of seniority although even here it varies as a few of the school districts cover the teacher's contributions. It doesn't surprise me that people don't seem very knowledgeable as it is a complicated system. In Michigan there are 5 different potential pension options so even people of the same seniority may have selected different options with different contributions levels and payouts. Figuring out all the options involves of lot of 'if then unless checklist A returns a result between X and Y or worksheet D returns a result < Q' not to mention guessing estimated final years before retirement salary and avg stock market returns until retirement

I do remember being very surprised when I started working through the options. At one point the Michigan pension system was basically needing returns of 8+% every year to meet obligations with no teacher contribution. It seemed pretty obvious the system was going to fail but the unions raised holy hell when asked to contribute 1.5% going forward. I guess most of them just wanted to get theirs out before the system failed or something

 

[Darwin333]

401k is a way for Government to convince us to spend our own money on our own pensions........while investing into stock market to furthermore support their buddies.

Knowing that Social Security will implode.....

They did a great job.

And you think all that pension money is just sitting in a bank account somewhere accruing a measly 1% interest right now (BTW, that is effectively losing money due to inflation)? We are talking about pensions, not social security, and pension money is invested to get returns just like your 401K is. The only difference is who manages/invests the money.

 

[Jhhnn]

Can you explain to me how it is mathematically possible to employ someone for 25 years and continue to pay them to not work, including other benefits, for longer than they actually worked? Eventually you are paying far more people to not work than you are paying to actually work and the number of people getting paid to not work versus to work continues growing exponentially.

The law of exponents, a class that a fuckload of people in this country slept through, is a cruel bitch sometimes...

Exponents don't apply at all with a constant or growing workforce. Few people retire from any job at 55 due to financial considerations, particularly healthcare, unless they take another job. Average retirement age is now up to 62. Average life expectancy for a 62 year old today is 82 or so, meaning only half will be alive to collect their pension at 82.

http://www.gallup.com/poll/168707/average-retirement-age-rises.aspx

http://life-span.healthgrove.com/l/63/62

Not to mention that in a lot of states cops and firefighters game the system. Their pensions are based on their pay for their last two years of employment. So they save up all of their sick days and vacation days (which carry over every year and are legally owed to you) and cash them in during their last two years of employment. So a cop that normally made $70K a year can juice his income up to $120K for the last two years of his career and his pension payments (for the next 40+ years or so) are based on the $120K/year instead of his actual salary.

I don't think you have any information to support the 2 year claim nor do you really understand the true nature of it. My pension, for example, is based on the average of my best 5 years. I couldn't carry vacation forward year to year, and I received half pay for the max accrual of sick days which is 170. I was lucky to have them. It was a $23,000 payoff for good behavior that would bump a 30 year 75% pension up by $3450/yr when a person works thru the last pay period so that the check arrives before year's end.

Given the dearth of jobs & opportunity in this country, we can idle older people or younger people & even a bit of both, but the notion that people should work longer hurts the younger generation's chances & is really counter productive from a societal POV.

 

[MovingTarget]

Should we (the younger generation) bail out pensioners? Yes. However, it should go hand in hand with legislation to solidify pensions for when we retire. Many of us simply do not have the financial security provided by defined-benefit plans for when we get to old age like our parents did. Everyone deserves the right to age with dignity.

Pensions were one leg of a formerly solid three-legged retirement stool. The other two legs are Social Security and private savings/investments. Guess who is the first generation to only have two legs? Us. Retirement is rapidly becoming a luxury with the demise of pensions.

So yes, sacrifice is required on the part of the young now, especially if we want a better deal for when we get older. Raising the retirement age sounds nice on the balance sheet, but even as peoples' lives have been extended, that does not necessarily translate into their physical/mental working lives being extended too.

 

[WackyDan]

Healthcare companies and the government.

Step 1) Set a pension age.
Step 2) Improve life expectancy for everyone
Step 3) Don't change the pension age while you have an aging population
Step 4) Enjoy your pension crisis.

Step 3.5) Allow unions to negotiate elevated pension benefits over decades without shared contribution and without company mandated increases.

Unions as well companies share the blame for pension funds being under funded.

 

[brianmanahan]

Guess who is the first generation to only have two legs? Us. Retirement is rapidly becoming a luxury with the demise of pensions.

it's still pretty easy to find a job with a pension though

 

[IronWing]

Step 3.5) Allow unions to negotiate elevated pension benefits over decades without shared contribution and without company mandated increases.

Unions as well companies share the blame for pension funds being under funded.

Still stuck of the myth of employee contributions? Employees contribute labor, employers contribute funds, period. Company managers are supposed to look out for the shareholders. If they signed contracts containing pensions those contracts were either good for the company or the managers violated their fiduciary responsibilities. Unions have no power to force a company to sign a contract.

 

[Jhhnn]

Still stuck of the myth of employee contributions? Employees contribute labor, employers contribute funds, period. Company managers are supposed to look out for the shareholders. If they signed contracts containing pensions those contracts were either good for the company or the managers violated their fiduciary responsibilities. Unions have no power to force a company to sign a contract.

As I pointed out earlier, I contributed 4% & the company contributed 8% all the years I worked for them. I doubt my situation was unique.

You're right about managerial malfeasance in private pensions, no doubt. Gotta keep up production & profits to get the bonuses, so of course they'll agree to blow up the pension plan decades after they're gone. Or just loot it in the process of a leveraged buyout.