Posted on 06/26/2017 7:17:46 AM PDT by Lorianne
A recent report from Moody’s states that “US public pensions funds’ adjusted net pension liabilities (ANPLs) surpassed $4 trillion nationwide in 2016”. The report also indicated that this increase in Unfunded pension liabilities was a result of “poor investments” and “declining discount rates”. Three different investment return scenarios are offered in the report- base, upside and downside- to project pension liability debt levels in 2020. According to the report, the downside scenario places public pension debt at dangerous new levels with a expected 59% increase in total liabilities.
In order to stave off this possible forecast, pension would have stabilized their funds through sound investment allocation. Unfortunately, even in the upside best case scenario, pension liabilities will not decline. Furthermore, the sample of 56 pension plans used in the study provides a dismal picture for the future. According to the sample, investments in the pension plans achieved 1% returns on average within the last year. Their investment targets were an assumed 7.5%. This portends a dire situation if pension investments continue to perform poorly.
SNIP
That's a Ponzi scheme.
no one willing to lend them money to keep the charade going. It’s all going to end very badly.
This stuns me. Why in the heck would they be borrowing money to pay pensions in the first place?
Pensions are supposed to be funded on an ongoing basis, with money deposited into a completely separate fund from which pensioners are paid benefits. And the amounts deposited on a regular basis are supposed to be enough to pay liabilities into the future, taking into account investment earnings on the funds.
It’s a giant red flag is any government entity or business, finds itself borrowing to fund pension obligations.
I know what I just said is a captain obvious comment and may attract the derision given to such comments. But it’s true isn’t it? Some here may not understand how pensions are funded and how they are supposed to work.
Collective Bargaining between public employee unions and elected public officials is BRIBARY.
Allowing the public employee unions to make campaign contributions to the very people the are negotiating with is BRIBARY, they are buying the politicians.
Make this illegal and you solve the “pension” dilemma.
I mean, hey, we're always hearing from the left that the Constitution is a living breathing document.../sarc>
These must be public sector pensions.
L
“This stuns me. Why in the heck would they be borrowing money to pay pensions in the first place?”
Allow me to elucidate. You see, these are public sector workers. The politicians promise them extravagant pensions in return for the support of their unions. But instead of actually being responsible about things and socking money away these same politicians spend the money they promised these public sector suckers on some other vote buying scheme.
That’s what happened here in Illinois. And since it’s the Legislature doing the b**** f****** there are no penalties attached to what would be seriously criminal behaviors in the private sector. Nobody who lied gets fined. Nobody who failed to fund these pensions is ever even criminally charged.
They can’t be. They’re the damned Legislature.
So eventually after, oh say 25 or 30 years of this insanity, the numbers catch up with the politicians. Math has a way of doing that. The entity in question isn’t bringing in enough from the “investments” they made so they issue Municipal or State bonds. The. Buyers are told that these bonds are a “safe” investment.
That’s how they borrow money.
Best,
L
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