Posted on 03/29/2009 5:49:14 AM PDT by engrpat
The national economic collapse is battering municipal and state pension plans, and that means taxpayers will likely dig deeper into their pockets to pay retirees.
"It's a ticking time bomb," said Trumbull Finance Director Lynn Heim. "Unless the market takes off, we will just be holding our head
above water."
Before the recession took hold, and before the stock market took a nose dive, towns and cities across the region were already allocating more money each year to pay retirees, who can earn as much as 70 percent of their pay.
But experts say the 2008 stock market crash is a potent warning that the defined benefit retirement plans towns and cities have relied on for decades could become budget-busting expenses.
As the stock market tanked, pension funds across the region, state and nation suffered
huge losses.
Fairfield's pension fund, for instance, lost nearly $100 million, or 28 percent of its value. Bridgeport lost $70 million in one fund, or about 30 percent of value. Milford's pension fund dropped $158 million, while the state's pension funds dropped about 25 percent on average.
Faced with a market that as of Friday was down 35 percent over the last year, it's unlikely those losses will be recovered any time soon.
Stratford is projecting its yearly pension costs could top $35 million by 2029. Bridgeport's contribution has doubled since 2005, and even wealthy towns like Easton are putting in twice as much
next year.
(Excerpt) Read more at connpost.com ...
As the world turns so does the demise of the USA we knew.
Government workers need a good economic enema...
Of course, the congressional pension funds will be protected.
Uh....we're paying for these govt workers...We get scr**** twice!!
“The national economic collapse is battering municipal and state pension plans, and that means taxpayers will likely dig deeper into their pockets to pay retirees.”
Not on their freaking life.
Wisconsin state retirees lost over 2% in their benefits recently, if they were invested in the *core* fund. Retirees who chose the *variable* option lost over 42%.
Just a few months before this cut, the retirees received letters from the state telling them that while the pension funds were *fine*, if they ever were not, there would be cuts.
Don’t forget the NEA pensions covered by the taxpayers. This is a huge pot of money that has taken a real hit lately.
I'm glad I'm not a gov't employee in CA depending on a retirement fund---theirs has been underfunded before any of this financial mess became evident.
It does seem that way. This might be the hole we can't climb out of...
Get ready for it folks, the only possibility of saving our standard of living is massive automation and we can depend on our wizards in Washington to place every possible barrier in the way of that.
Some years ago I watched a discussion concerning the future of retirement in this country. Several well known economic thinkers put forth their thinking on the proper mix of assets etc. etc. The last speaker was a young man who looked out of place, he could have been at a father and son banquet except he was the only son among all the fathers. This young man began to instruct his elders on what they were overlooking, it was the same thing I had thought but he said it far better than I could. The gist of it was this, imagine yourself the only person left on the planet, you would own it all but no servant would bring you breakfast in bed, if you wanted fresh meat you would have to kill it, skin it, butcher it and cook it. By extension one can see that retirement depends on having enough people working to provide for the needs of retirees in addition to their own needs. All the retirement plans in the world will not change this. The only thing that could change it is automation on the order of the world of the “Jetsons”. Social security and retirement plans have given many people the illusion that they are never going to have to depend on the younger generation to support them in retirement but it is only an illusion.
Even Bill Gates would have to cook his own meal if he were the only able bodied person left.
The truly frightening part is that, far from being like Grandpa Walton, surrounded by three generations of descendants who are glad to help in your final days, many Americans have children and grandchildren who are a burden on them rather than a blessing in old age.
Why?
In the miid 80s (starting in late 83 or early 84 the Alaskan economy tanked. 30K people moved out of Anchorage alone. Houses sat empty, all but a couple of banks failed because of bad real estate loans (starting to sound fmilier?) Even as late as 1991, things were pretty tight.
But the muni, and to a lesser extent, the State reduced their expenses (got smaller) and things started to turn around.
NO FedGov bailouts, no massive stimulus pork bills. I will have to admit the 3 to 4 billion Exxon dropped for the spill cleanup likely saved the southcentral area from becoming a ghost town.
I don't remember the details of the article but the message was that nationwide, gov't employee --state, county, and municipal--benefits and retirement funds are in worse shape than Social Security.
If the employees only got 70% retirement our problems would be less. In CA 100% is more the norm. Plus we have politicians joining the pool..late in life at enormous salaries. Police and fire....using overtime and one year promotions to raise retirement pay.
Their contracts will stay in force unless there is bankruptcy..so the taxpayers are on the hook.
Oh..in CA the health care for retirees has no reserve investment..just pay as you go. Billions in liability.
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