To Pay New York Pension Fund, Cities Borrow From It First

New York Times ^ | 27 May 2012 | Dany Hakim

[Lorianne]

Across New York, state and local governments are borrowing $750 million this year to finance their contributions to the state pension system, and are likely to borrow at least $1 billion more over the next year. The number of municipalities and public institutions using this new borrowing mechanism to pay off their annual pension bills has tripled in a year.

The eagerness to borrow demonstrates that many major municipalities are struggling to meet their pension obligations, which have risen partly because of generous retirement packages for public employees, and partly because turbulence in the stock market has slowed the pension fund’s growth.

The state’s borrowing plan allows public employers to reduce their pension contributions in the short term in exchange for higher payments over the long term. Public pension funds around the country assume a certain rate of return every year and, despite the market gains over the last few years, are still straining to make up for steep investment losses incurred in the 2008 financial crisis, requiring governments to contribute more to keep pension systems afloat.

Supporters argue that the borrowing plan makes it possible for governments in New York to “smooth” their annual pension contributions to get through this prolonged period of market volatility.

Critics say it is a budgetary sleight-of-hand that simply kicks pension costs down the road.

[Lorianne]

Beiderman’s Daily Edge ... Delay and Pray

http://www.youtube.com/watch?feature=player_embedded&v=Hewp50fHOvU

[Lorianne]

Beiderman’s Daily Edge ... Delay and Pray

http://www.youtube.com/watch?feature=player_embedded&v=Hewp50fHOvU

[Sir Napsalot]

Let’s see how this works.

If you are starving but don’t have means to get food, start eating your own flesh. The nutrient you gained will re-grow the wound later?

[ken in texas]

Yep... like the in-debt couple that says “Well, we canceled the around the world cruise this year so let’s buy a new Mercedes with the money we saved”.

[EGPWS]

Just waiting until interest rates skyrocket and costs skyrocket with them.

Prepare for the worst when government workers who have always got everything they wanted handed to them suddenly have it taken away out of necessity.

Riots will be just part of the issues.

[E. Pluribus Unum]

If I still had a mortgage, I’d want to pay it this way... just keep borrowing more every year until I croaked.

[sergeantdave]

The knuckle-dragging New York Times editors are getting more stupid and stuck in a comma in the first sentence where it doesn’t belong. So much for the Time’s legendary editing prowess.

That’s a good sign - the syphilitic spirochetes are at work.

Southerners may have no teeth, but New Yorkers have no brains.

New York Times females put on make-up with an edging shovel. (Look it up, sluts.)

[1010RD]

The Feds and my home state of Illinois have mastered this.