the obvious question is: why do public pensions still exist? the private sector realized decades ago that they were unsustainable and created the 401k system where the employee has a true responsibility to participate and contribute. it works and it sanely ends the parent entity's obligation the individual upon retirement. there is abolutely no reason why public employees should maintain this priviledge above all of us in the private sector - governments at all levels sould begin switching over TODAY
If The Democrats Didn’t Give ” Sweetheart Deals ” To Your Public Service Union.
Goon Employees To Get Reelected; You Would Have Plenty Of Money and The.
Taxpayer would have Some Spare Change in His Pockets! Democratic Hustler
Politicians + Corrupt Union Goons = BANKRUPTCY BABY! Time To Bring.
RICO Conspiracy Charges Against The Hustler Corrupt Democrats and the.
This study has inspired me to release the conclusions of my sudy OF GLOBAL WARMING RESEARCH EARLY and they are as follows:
NO CERTAIN EVIDENCE OF GLOBAL WARNING EXISTS as of 2060. The disappearance of the icecaps and the sea rising 20 FEET APPEAR UNRELATED TO RISING TEMPERATURES. OUR COMPUTER MODELING AND ANALYSIS BASED ON THE BILLIONS AND BILLIONS OF YEARS SINCE THE BIG BANG ACTUALLY SUGGESTS THAT THE EARTH MAY STILL BE IN A LONGTREND COOLING PERIOD. THE 8 DEGREE RISE IN TEMPERATURE AVERAGES DO NOT APPEAR TO BE SIGNIFICANT. i ENCOURAGE THE GOV TO CONTINUE SELLING COASTAL FLOOD INSURANCE SO AS TO MINIMIZE THE PAIN AND WE PETITION CHINA FOR MORE CREDIT TO CONTINUE OUR RESEARCH TO FIND THE REAL CAUSE.
Private enterprise subsidizes public pensions. Public pensions rob from Peter to give to Paul.
Public Unions are just the Mob Collection agency for the Democrat Party.
One would have to be brain dead not to recognize the inherent corruption in Democrat politicians rewarding unions with tax payers money in return for votes and money!
In fact, the Unions and their bought Politicians have been so greedy & corrupt they are bankrupting this Nation!
Discussing the rearrangement of the Titantic's deck chairs. How droll.
In Oregon the Public Employees, the Legislature and the Judiciary are all covered by PERS (Public Employees Retirement)..... It is in the process of bankrupting the State.
My question for years has been...."when these obscene retirement benefits were negotiated.....who represented the Taxpayers???
What I find ironic is that these same "bullies" that are bankrupting the State continue to paint themselves as victims......What crap.
The truth is public pensions are nothing but socialist scam.
Here's what Russia had to say about the election.
“Recently, Obama has been re-elected for a 2nd term by an illiterate society and he is ready to continue his lies of less taxes while he raises them. He gives speeches of peace and love in the world while he promotes wars as he did in Egypt, Libya and Syria. He plans his next war is with Iran as he fires or demotes his generals who get in the way.”
"He is a Communist without question promoting the Communist Manifesto without calling it so. How shrewd he is in America. His cult of personality mesmerizes those who cannot go beyond their ignorance. They will continue to follow him like those fools who still praise Lenin and Stalin in Russia. Obama’s fools and Stalin’s fools share the same drink of illusion.”
"President Vladimir Putin could never have imagined anyone so ignorant or so willing to destroy their people like Obama much less seeing millions vote for someone like Obama."
Pravda 11/19/2012 By Xavier Lerma
A classic case of politicians purchased with government employee union dues paying off unionized government works with unsustainable wage, benefit and retirement packages.
There is no credible argument for government workers whose salaries we pay, having better wage packages, benefit packages and retirement packages than those of use whose taxes fund these compensation excesses.
So it all needs to be rolled back. No more tenure. No more defined benefit packages. No more guaranteed annuities. No more free health care in retirement. The rest of us do not get these things and there is no reason for our government servants to get these things with our tax dollars, when we do not get them ourselves.
The simple truth is we are an ageing population, the 4% or 8% return is important, but I believe demographics are even more important. A young nation has a better dependency ratio (young tax payers to retired), also young nations grow faster I doubt if an old population could even maintain the 4%p.a.long term.
Social security in an ageing population with increasing life expectancy is one big Ponzi Scheme, let alone the old Defined benefits pensions.
Politicians in a democracy can rarely get elected telling the truth about this issue.
If we had a political party say, we will increase taxes, increase the pensionable age to 65, cut public sector jobs and run budget surpluses for twenty years and repay the debt - would they get elected?
Once people like Reagan or Thatcher could say this and get elected, but now?
Maybe these pub employees should get stuck in the Ponzi called Social Security.
I guess the Democrat/Union money laundering operation only works until other people's money runs out.
Wow! Where do we begin:
Scholarly research suffers when dishonest conclusions such as this are presented. Willful neglect of self evident facts and calls for more research are tiresome and never solve the problems. The 8% issue is just arithmetic. The Union issue is the elephant in the room everyone sees. Declaring it may not be there is unhelpful and cynical. Not only were they the corrupt partner with the Dems in creating the unrealistic benefits, there administration of the same was criminal. No private sector pension would allow a last years earning formula to determine life long benefits and then allow spiking the last year! This is incompetence at the highest order and in a different context would have been considered racketeering.
Even liberals from non problem states would be outraged at a Fed bailout. But this administration certainly will consider it in order to aid there stalwart consituency.
Few hold government employees primarily responsible for this mess. And though it is not a solution for past corruption; Gre Davis and others like him should be in prison for willfull corruption. They were not this stupid they were just this greedy for power.
"A professor of management and director of the Center for Retirement Research at Boston College, Munnell also has extensive REAL-WORLD EXPERIENCE, including 20 years at the Federal Reserve Bank of Boston. She also served as an assistant secretary of the Treasury Department and worked as a member of President Clinton’s Council of Economic Advisers."
Sorry, that's not exactly what I think of when I hear the words "Real World experience". Has she ever had a job that wasn't dependent on tax payers? I think most people who have extremely limited experience in the private sector (real world) that are involved in public policy have quite a different viewpoint than those who pay for the public sector but who make a living in the market driven real world.
This is about 30 years and many trillions too late. There is no room for balance. 3 to 10 years and its all ashes, ashes we all fall down. Its a Greek to me, unless its Zimbabwe.
The feds will need to bail out the miserably underfunded pensions because they have the ideal way for funding. Here is the plan: The underwater pension plans need to be immediately brought into sync with the ERISA rules governing private plans. The immediate shortfall needs to be borrowed from a loan fund. Let’s call it the state and local agency pension protection (SLAPP) fund. At that point, an excise tax needs to be placed on all present and future benefits paid out of such bailed out fund sufficient enough to pay back the SLAPP fund borrowing. That should solve it.
California the Golden state, Obama and the Democrats model for American future, is fast becoming the poster child for an bankrupt third world State!
An unholy alliance of Socialist Democrat politicians, Unions, Left wing loony,s and Illegal Aliens supporters are feasting like hogs at the trough of tax payers paid benefits while taxing & regulating business and the tax paying public into poverty.
The corruption and pandering of Left Wing Democrat Politicians to their constituency of Unions, Illegal Aliens and open border supporters, are driving business and citizens to other states & countries, while leaving the parasites, welfare leeches and Hollywood perverts in an increasing bankrupt, crime ridden, dysfunctional state!
For years California has ignored economics 101 and imported Criminals, Uneducated fast breeding Parasites, and poverty from Mexico, which increased Medical, Welfare, Crime, Prison, etc. & adding a estimated 22 billion per year to Calif. State expense to support the invading horde of Illegal Aliens while exporting business and educated tax payers.
Like all Socialist countries the results have been a astronomical increase in social welfare, schooling, prison cost etc. and a lowing of Living standards, Heath care, Education standards, Tax receipts & finally Bankruptcy.
The policies of Comrade Obama and Wash. DC Democrats are intent on following Calif. policies and Pro-Illegal Aliens, Pro-Unions and Anti-tax paying citizens and are endorsing the same socialist process of rewarding the Corrupt, Stupid, Foolish, Lazy, Greedy & Criminal while punishing the responsible, honest, law abiding citizens of American.
Failure to abide by our Constitution against invasion & enforce our Immigration laws and constraints on wages and benefits for public employees will result in turning the Golden State into MexiCalif and the end of the Calif. Dream and the beginning of the MexiCalif. Nightmare!
Amnesty & Citizenship as a reward for their invasion of the USA, with chain immigration will result in the rest of the USA turned into a Spanish speaking third world cesspool and follow California into a polluted, over populated, Spanish speaking, third world Slum of Crime, Corruption, Poverty, Cruelly & Misery modeled on Mexico!
This will result in a population depending on Welfare and the Democrat party, thus assuring the lock on power for the Socialist Democrat party of the United States of Mexico!
for years Munnell was an expert witness type person that municipal unions used to justifiy their large unfunded pensions and said it was not a big problem and overblown. The fact that she says that defined benefits will be welcomed by municipal and public ed unions as a benefit is laughable and shows how out of touch she is. Just regurgitation spreadsheets by others does not make a book
Ms. Munnell has a rather long and controversial history to say the least. It was about the mid 1990's when she floated a trial balloon for the Clinton administration that would have eviscerated 401k plans, by taxing them, under the theory that granting favored tax treatment to these plans was somehow unjustified. Clearly a democrat money grab under the guise of thoughtful analysis.
I can say that regarding California, where I live, for now, you could use 1% as your factor and this state would still be under water. The pension giveaway they did inn about 1999, which prompted my lazy state worker next door neighbor at the time to exclaim "I get to retire early, cause Calpers has done such a good job of investing", is truly an abomination. And one gets the sense that Jerry Brown is just kicking the can down the road, hoping for a democrat Congress to bail his union cronies out by taking on California's bankrupt pensions.
I just hope that after my coming relocation to Texas (yes, for tax reasons), that we Texans don't end up having to bail these idiots out.
they talk about this woman in the book "Reckless Endangerment", she claimed racial bias in mortgage lending and basically rigged her study to show there was. I assume she did the same thing about many of her "claims" in this book
Yes, the solution does not or will not involve the ZFederal Govt bailing out the likes of Illinois and California and Michigan. I like that story line, where are you on telling it straight. The states in trouble got there with mostly democrat leadership and union bed bugs. Then let them solve the problem. My house is not a collateral loan security for this thievery.
Early on in public accounting I did a series of audits of defined benefit plans for (then) Rockwell International. This was in the early 1980's.
The allowable rate of return assumptions required by FASB at the time was about 4%.
The private sector, because of this minimal discount rate, saw the tsunami coming and moved to defined contribution plans, which are by definition always fully funded.
GASB, which sets standards for public entities, allowed the 8% or higher numbers popular in public entity plans. This rate hid the impact of wage increases and understated liabilities for future benefits to allow us to arrive at the currently underfunded situation. The information was there years ago that the rate was excessive, but GASB and government entities were loath to change the requirements for the political difficulty and zooming liability and current cost numbers that would result.
GASB finally has revised its standard to use more realistic assumptions starting this year, but the damage is done.
Taxpayers have been deceived consciously by GASB and government managers. Things are changing now only because the failure is so obvious and huge.
B.S. Davis, who else but the fed has gotten us into this treacherous disaster? And its roots are purely spiritual in the most heinous magnitude, manifested in tortuous punishment amplifying daily. Pray the rosary!
I wonder about New Jersey, with so much in unfunded pension liabilities - the only way that the state will be able to survive is by getting the money from Congress i.e. in other words, getting the rest of the country to pay for the obligations imposed by New Jersey politicians. And Democrats will not ignore government workers, who are a critical part of the corrupt coalition Democrats have put together.
I forsee a time when Congress will work out some kind of a solution to help since the states with the biggest problems are, as mentioned in the article, reliable blue states. And with Republicans being too spineless to put up any kind of a fight when Congress enacts a law guaranteeing payment of state pensions.
There really is no other way for New Jersey other than by federal assistance. Courts will no doubt enforce the pension obligations. Tax revenue is insufficient to pay for the obligations - here in New Jersey taxes are already on the brink of being confiscatory. We have been progressively losing industry after industry - manufacturing is long gone, telecommincations is gone, the pharmaceutical industry is slowly leaving -even as Christie convinced Bayer to stay, Hoffman LaRoche has been moving operations elsewhere. If taxes go up significantly these companies will be gone in a hurry. And when New York City resumes its downhill slide temporarily put off in the Giuliani and Bloomberg era, New Jersey will slide right along with it. Who else but the feds will be able to provide the money to bail out the state?
The most important issue going forward is ,IMHO , how to isolate the bad actors from the rest of us . To wit NJ and Ill. are in such bad straits that to hold their pensions together will require enormous fiscal pain , which they will try to offload on the other states . As they are reliably Dem states they will get some traction in the WH and Congress . On a philosophical level , that would dangerously erode what is left of a federal polity . On a practical level it would undermine any responsibility and there would be a race to the bottom of increased bad behavior . Caly is an interesting outlier , it has the same and worse underfunding issues but has within its borders the solution : expanded energy production and associated taxation . I fled NJ four years ago in large part because of very high taxes and terrible services at the most basic level . When one must buy two windshields over four years because of flying stones on an interstate highway , it sort of gets one's attention . I live now in the Deep South and my total tax bills are 1/10th of NJs . As a retired finance guy , I could see these pension numbers on the wall and see no solution anywhere in sight . And having been born and raised in the 50's and 60's in NJ it was sad to see what had become of 'home' , somewhat like the elegies that VDH has rendered on his Caly . But keep these problems where they started, in their home states . Like they said years ago , will the last person to leave NJ/Ill please turn out the lights .
In Connecticut, towns are eliminating pensions for police even when the pension fund is fully funded. The unions lose every time in arbitration. So this goes beyond money management. The death of pensions is an attack on the middle class. Wall Street makes a killing on retirement plans for uneducated middle class savers who no longer have the security of a defined benefits retirement plan. Look how much the average dupe pays in fees in their 401(k) or 403(b). Who really benefits? Taxpayers should want pensions for all employees across all sectors.
Ernie Laubacher is correct. In her paper of 1991, Munnell proposed an immediate 15% federal tax on all private pension assets and to permit the pension plans to reduce benefits by 15%. Her paper, "Current Taxation of Qualified Pension Plans", says that "...adjustments could be made on the personal income tax form for any tax rebate or surcharge required for beneficiaries at different income levels." Maybe I'm dense, but I don't see how a tax surcharge makes a pensioner whole after he loses 15% of his pension benefits.
what will these states do when they can no longer afford these ridiculous pensions and benefits to a working class bent on draining the system?
During this period of Lent, it is wise to recall what satan said to Jesus when he was tempting Him.
Again the devil took him up into a very high mountain, and shewed him all the kingdoms of the world, and the glory of them,
Shewed him, etc... That is, pointed out to him where each kingdom lay; and set forth in words what was most glorious and admirable in each of them. Or also set before his eyes, as it were in a large map, a lively representation of all those kingdoms.
4:9. And said to him: All these will I give thee, if falling down thou wilt adore me.
If you have any doubt as to who is controlling the economy, it is doubtless those union officials who promise the worldling such well funded retirements and then keep the receipts for themselves.
Bear in mind the prophecy of St. Malachy and note the retirement of Pope Benedict XVI. The last pope will be elected next week and then the Chastisement begin. You can thank the godless liberals who voted Obama in for the coming economic carnage by his reckless overspending. He is here today, as have been the unions, purely to destroy what conservatives have built up since day 1. Get ready, it's coming.
I've been following these issues from afar with fascination for some years, mostly alerted to the size of the problem and the details by City Journal articles. My perspective is based on having started to take an interest in underfunded, mostly completely unfunded, pension obligations of governments at all levels in Australia in 1976. The lowering of retiring ages while keeping indexed pensions in those inflationary times pegged to final salary was blithely entered into without proper actuarial adjustment and the need for high paid senior bureaucrats to pay up to 30 per cent of salary to maintain their full entitlement (typically 70 per cent of final salary fully indexed)because of the rapid inflation of those years was dealt with by simply capping it at 9 per cent.
It took those of us who campaigned against the forseeable growth in public sector retirement obligations until 1993 to pretty well end the old pension regime and substitute defined contributions. Happily I have an indexed pension from the public sector which provides a residual pension for my potential widow but that is because I got on the gravy train in an earlier era.
There are of course problems about defined contributon schemes such as volatile returns and what happens to the lump sums when put into the hands of those who are inexperienced in the management of investments. But reading about California gives me the horrors. Any conservative is very unwilling to go back on express or implicity promises whether or not entrenched irreversibly in law. Yet taking advantage of corruption of the political process to get the advantage must surely negate the right to complain about what now needs to be done. And if I were a Californian property owner I would be anxiously inquiring as to what level of exaction could be made on me as property owner to pay for those underfunded liabilities while all the time my local government was doing less and less for me.
I follow my city's (La Mesa, CA) pension costs pretty closely and I find it difficult to take the author seriously. For starters read the article in City Journal winter 2013 edition. Of course unions have been the primary drivers of ever greater benefits benefits ever lower retirement ages. All risk for underperformance of any type is 100% on the backs of taxpayers. We spend three times as large a percentage of salary for pensions as that which is typical in the private sector. And I could go on.
Well writen David. As a teacher I paid 6% of my salary into my pension and my employer paid 6%, I am not an actuary, but I am an economist. 12% of the salary invested wisely should pay the 1/80 of final salary pension. After all, a the teacher that leaves at around 40 years of age and doesn't recieve pension until they are 60, they get their pension based on the wage they earnt at 40. This saves a fair bit of money and pension is set at a maximun of 40/80 that is half pay no matter how long they serve. These pension scheme are closed now anyway.
Could we spend as much time discussing the rampant "cheating" that the mortgage industry committed selling ARM loans an educated 12 year old could work out the borrowing could not possibly repay when they reset. They recieved huge commissions while efectively bankrupting financial iliterate clients and the nation, but are bailed out with tax payer money. Is this perfectly alright as they are in the private sector?
I saw the title of this article on the subject line in my email before I opened it. I must confess that I haven't read it (the article) yet. I will admit that in states like California, New York (?), and others, public employees' pensions have the potential to wreck havoc. But having been a public employee for most of my working life, I often stop to think about whether the problem is with the employees and their unions (I'm not unionized), or with the state legislatures that have, through good times and bad, failed/refused to properly fund the obligations incurred by their predecessors? Let's all admit this much: if any one of us had an opportunity to receive a comfortable pension following all of the years of work we put in (be it public or private), we'd take it. I am not saying, here, that California's modus operandi is proper. It's not. The legislature is elected by the union officials who control the public employees. Pure and simple, that's corruption. But it seems to me that the problem is not so much the employees, themselves, as it is the legislatures that fail to, as stated above, "balance [extensive state and local governments'] promises against competing interests". It seems to me that it's well-nigh time to vote out of office those legislators who can't (or won't) perform this balancing act. I know that the legislature that has set up a retirement system for the public employees in the state where I work hasn't promised us that we'll be rich when we retire. Nor will we be willing to retire in our 50s. But we're not to blame for the faults in the system. Indeed, we have little to no say in our retirements (other than to designate where our . . . OUR . . . dollars are invested). I'm not someone who shares beliefs that are commonly held by those who claim to be of a liberal conscience in this country. But I do insist that blame be placed squarely where it belongs: on the shoulders of legislators who cannot or will not balance the promises they've already made against their states' other legitimate needs. Don't blame the teachers, firemen, or police officers in your state. Blame the legislators who caved to every special interest that kissed their collective. . . .
Excerpts: Bloomberg news 1995
Munnell made her reputation at the Boston Fed with studies of wealth distribution, savings, and retirement policies. She has criticized private pension plans as tax breaks for "a relatively privileged subset of the population" that don't increase national savings. In a 1992 article, she advocated imposing a tax on both accrued benefits and future contributions--and using that revenue windfall to cut the budget deficit or pay for education or infrastructure projects.
Munnell gained additional notoriety with a groundbreaking 1992 study that found systemic racial discrimination in mortgage lending among Boston banks. After reviewing 4,500 loan applications made in 1990, she and her co-authors concluded that blacks and Hispanics were 60% more likely to be denied mortgage loans than similarly qualified whites. The study served as a catalyst for greater scrutiny of bank lending practices by federal regulators. But it has come under fierce attack from conservatives and bankers, who say that the data used were flawed and that the discrepancies in lending rates may have been caused by other factors. "It troubles me that poor research would be the basis for an all-out attack on an industry," says James Chessen, chief economist for the
GOP gripes about Alicia Munnell:
MORTGAGE DISCRIMINATION Munnell co-authored a 1992 redlining study while at the Boston Fed that used mortgage data to argue that Boston banks were discriminating against minorities. The study resulted in closer federal scrutiny of lending practices and legal action against banks.
TAXING PENSION ASSETS In 1992, Munnell proposed lowering taxes with a one-time tax on pension funds, plus an ongoing tax on future contributions. She argued that private pension programs are a tax shelter for the affluent.
ECONOMICALLY TARGETED INVESTING Republicans charge that Munnell wants the government to force pension funds to invest in projects with social objectives. But Munnell-backers say she always has opposed trading lower returns for social considerations.