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What Will Cities Do To Solve Their Pension Problems?
Michigan Capitol Confidential ^ | 8/4/2014 | Jarrett Skorup

Posted on 08/07/2014 12:34:21 PM PDT by MichCapCon

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1 posted on 08/07/2014 12:34:21 PM PDT by MichCapCon
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To: MichCapCon
Steal money.
2 posted on 08/07/2014 12:36:28 PM PDT by E. Pluribus Unum ("The man who damns money obtained it dishonorably; the man who respects it earned it." --Ayn Rand)
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To: MichCapCon

Bankruptcy.


3 posted on 08/07/2014 12:37:46 PM PDT by mulligan (I)
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To: MichCapCon

It’s simple; since the employees themselves in government rarely put their own money toward the pensions it’s all a future promise to pay. So don’t and say ‘tough luck’.


4 posted on 08/07/2014 12:38:39 PM PDT by Fledermaus (Conservatives are all that's left to defend the Constitution. Dems hate it, and Repubs don't care.)
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To: E. Pluribus Unum

Steal “more” money......lol

What else would they do?

And that would lead to a bankruptcy due to loss of revenue and we all know how that goes..


5 posted on 08/07/2014 12:38:49 PM PDT by Cold Heat (Have you reached your breaking point yet? If not now....then when?)
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To: MichCapCon

Solve the pension problem?

Ban public unions.

Ban public union political activities and money


6 posted on 08/07/2014 12:41:23 PM PDT by 2banana (My common ground with terrorists - they want to die for islam and we want to kill them)
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To: MichCapCon

Raise taxes to take money by force from people more responsible than themselves.


7 posted on 08/07/2014 12:58:38 PM PDT by LambSlave
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To: Fledermaus

“It’s simple; since the employees themselves in government rarely put their own money toward the pensions it’s all a future promise to pay. So don’t and say ‘tough luck’.”

I disagree. From an economic perspective in a free labor market, an employee enters into a contract with an employer (public or private) to exchange his/her labor for a compensation package which includes cash, non cash, and benefits. An employer may offer generous retirement benefits in the future in exchange for lower cash compensation today. Essentially public pension are no different than the fully funded defined benefit pensions many private sector organizations provided employees.

When a public or private firm reneges on pension payouts, or reduces them, the firm is essentially stealing from the employee. The employee performed the work at a point in time for wages and the promise of future retirement benefits. The obligation of the employee has been met, if the firm does not provide the promised benefits at a future date it is breaking a contract and stealing the value of the labor represented by the benefits not paid.

The employee is not at fault because the organization to which he/she contracted labor did not put aside the funds to pay out the benefit at the future promised date. The employee is also not at fault if the organization made a bad contract (i.e. the total value of the compensation package for which the employee contracted was greater than market value) just as the employer is not at fault if an employee accepts a below market compensation package for a job. The contract is between the organization and the individual and should be inviolate from the point of both parties. Regardless of future circumstances, the employer owes the deferred compensation and benefits for which the employee contracted at the time he/she performed the work.

Free markets require contracts to operate efficiently. To say a firm or government agency can simply say “tough luck” to employees who have performed work in exchange for compensation that has not been paid is no different than an individual contracting a five year car loan with a bank, paying the loan for two years, and then telling the bank “tough luck” for the other three years. Any court in the land would consider such action breach of contract and the failure of the car purchaser to surrender the car would be consider theft.

Citizens of communities with underfunded pension plans elected representatives who chose not to fund the plans in the past through taxes or spending cuts. The voters who elected these representatives are ultimately accountable for the actions of the representatives, including the failure to set aside funds. The work was performed by employees resulting in an obligation for the employer to fulfill its contract to pay compensation according to the terms agreed to by both parties when the employee performed the work. The voters are obligated pay for the decisions they made in the past, and benefited from, by fulfilling the pension contracts and either pay higher taxes or accept a lower level of government services. To do otherwise would say contracts have no meaning, theft is permissible, and there is no free market.


8 posted on 08/07/2014 1:15:56 PM PDT by Soul of the South (Yesterday is gone. Today will be what we make of it.)
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To: MichCapCon

The “servants” get all the money and do none of the work. Insanity brought to you by 75 years of democrat rule.


9 posted on 08/07/2014 1:23:00 PM PDT by DManA
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To: 2banana

Ban public employee unions. This is when the problem started. That’s how it can end.


10 posted on 08/07/2014 1:25:22 PM PDT by bboop (does not suffer fools gladly)
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To: Soul of the South

This is not a free labor market. It is a government mandated market. The beneficiary of this mandate drives the decision making. The promises were given to themselves by themselves.


11 posted on 08/07/2014 1:25:37 PM PDT by DManA
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To: Soul of the South
To do otherwise would say contracts have no meaning, theft is permissible, and there is no free market.

That describes the state of the US in 2014 - See what the Federal Government did to the Delphi pensioners and GM bond holders.

12 posted on 08/07/2014 1:28:00 PM PDT by DManA
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To: Soul of the South

The difference is the public sector is using taxpayer money. And no private company sets up benefit defined pensions and if a big one does it is highly regulated by government.

I don’t believe public sector employees should be treated better and get large, lifetime pensions more and more in fraudulant ways like padding their final years with untaken sick time, etc. (the private sector normally doesn’t carry sick time over from year to year) and then double dipping with a job in another agency.

Frankly, the voters aren’t very aware of how much of their taxes go to this stuff and the government sure doesn’t tell them. It’s not the free market when public employees are involved. It’s a legislative matter and as we saw in Wisconsin they throw a hissy fit when you try and reform this outrageous waste of tax money.

For the private sector I fully agree with you. The public sector, except for maybe cops, firefighters, and emergency workers can go pound sand as far as I’m concerned.


13 posted on 08/07/2014 1:28:10 PM PDT by Fledermaus (Conservatives are all that's left to defend the Constitution. Dems hate it, and Repubs don't care.)
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To: E. Pluribus Unum

ding ding ding


14 posted on 08/07/2014 1:28:41 PM PDT by MrB (The difference between a Humanist and a Satanist - the latter admits whom he's working for)
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To: Soul of the South

I disagree with your comparison to the private sector. First off there is virtually no private sector union. Secondly very few of us in the private sector have a contract.

My benefits (medical and retirement) have been changed multiple times in my lifetime with little to no compensation in return. For instance my pension was changed to a 401k, it was simply rolled over and the pension was eliminated. My healthcare plan went from 0$ contribution to thousand $ a year with reductions in coverage. Again no compensation for the change.

Furthermore I did not campaign, fund or elect by boss who controls my benefits and pay.

Please stop comparing the private sector to the public. There is no comparison. The public sector is organized crime which requires the private sector to pay protection money or face consequences.


15 posted on 08/07/2014 1:29:23 PM PDT by outpostinmass2
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To: Soul of the South

You forgot to mention that the public employee campaigned funded and elected the very people who control their pay and benefits. I would call this putting the fox in charge of the henhouse. So in the end the public employee squandered their own pension by electing these patsies. Tough luck.


16 posted on 08/07/2014 1:36:11 PM PDT by outpostinmass2
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To: Soul of the South

All defined pension plans, private and public, are promises to pay. I think both should be treated equally under the Pension Benefit Guarantee Act. All entities that make such promise should be required to pay into the fund that under rights the act. When an entity, private or public, is judged to be insolvent the benefits are reduced and capped. Public entities should not be exempt because governments can theoretically always raise tax levels to pay benefits. They should be allowed to file for bankruptcy and have their financial condition assessed at then current tax rates.


17 posted on 08/07/2014 1:46:36 PM PDT by Old North State
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To: Soul of the South
You really opened up a can of worms with this one. Your average fiscal “conservative” would side with the democrats and republicans, and wipe their ass with contract law, if it meant that they could get out of their obligation to uphold their end of the contract. Private employee, public employee, it doesn't matter. All it amounts to is politicians and crony businesses weaseling their way out from under an obligation they made in bad faith. See GM bondholders, and delphi pensioners as an example. Expect these scumbags to start confiscating IRA’s and 401k’s next. Your retirement is only safe in the national bank of mattress, and even then you'll be robbed by inflation.
18 posted on 08/07/2014 1:48:35 PM PDT by factoryrat (We are the producers, the creators. Grow it, mine it, build it.)
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To: MichCapCon

I assume the missing percentage went for graft, trips to anywhere. Buying votes etc.


19 posted on 08/07/2014 2:28:31 PM PDT by minnesota_bound
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To: MichCapCon

It will be called, a special tax. We should call it “a pandering politician tax” for the pols who kicked the problem down the road to appease unions for votes.


20 posted on 08/07/2014 2:30:04 PM PDT by 1Old Pro
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