Posted on 12/15/2012 4:14:14 PM PST by Libloather
Teachers’ Pensions Are a Half-Trillion Short
By Kevin D. Williamson
December 14, 2012 11:15 A.M.
The habitual overpromising and underfunding of government-employee pensions is a fiscal powder keg in an economy full of sparks — and a new report estimates that teachers’ pensions alone are underfunded by nearly a half-trillion dollars.
**SNIP**
Note that the savings per teacher derived from the reform of eligibility rules runs $450,000, or more than two and a half times the average net worth of a retirement-age U.S. household. The real value of the average teacher’s retirement benefits in low-cost Wyoming is pushing the $1 million mark. The value of the average teacher’s retirement in Illinois is estimated at $2.4 million — and they were on strike over compensation not too long ago. Illinois has been issuing debt to meet its pension obligations, an unsustainable strategy.
The economics of the pension situation is of course worrisome (terrifying), but the political lesson is depressing, too: Government simply cannot be trusted to keep honest accounts.
(Excerpt) Read more at nationalreview.com ...
-— Government pensions will not be paid as expected. ——
And there will be much pissing and moaning. Then the walking dead will go after taxpayers with a vengeance.
How much have these unions dumped into political campaigns? How much in WI to recall the gov? I’ve thought for a long time that these unions have done a terrible disservice to their members by funding politicians. I can’t imagine any member would choose to have their retirement spent like that.
The more they get from government, the more they contribute to socialist politics.
My wife has been paying 8.9% out of her monthly paycheck for over 20 years; her state teacher pension all comes from her own contributions. Every state is different. Here in Alaska, they have changed the pension formula three times over the last 30 years. I have a hunting buddy who retired after 36 years, (he had been a Marine Captain for 8 years and was able to put those years toward teacher pension), anyway he taught for 32 years. He got $4400/month from his retirement when he did retire. I hear all the stories & huge pension amounts but honestly I don’t think they are all that high. Every state is different.
This is why they’re going to take your 401(k).
You did everything right.
Now you get to pay for those who didn’t. :)
It’s called “fairness”.
It’s not fair for you, but that’s beside the point. :)
This shortage can easily be taken care of by a moderate stimulus package. Not hard at all to print that much loot.
When Texas got the lottery, the teachers’ retirement was raided. They were promised the money would be returned. You get one guess if it ever was.
Should be a requirement that math teachers be conversant in basic economics, accounting, etc. Pure math is great, but not what most students need.
Same with Illinois. The Lottery was to go into the education fund. But, what they do each year, is reduce the education fund by the amount they project the lottery will bring in, and later sell bonds to cover their “miscalculations”.
They always over estimate what the lottery will bring in, thus reducing the education fund. What they take from the education fund, goes into the general fund, where it is lost.
In any event, I am owed a good sum of money by my state for work done over the years. I cannot be paid. I am out equipment and labor costs. I cannot foreclose on the equipment (like a contractors lien) because the state says so. I will not get paid, as our debt increases daily. I am at the bottom of the list.
The top of the list in Illinois? Pensions. Next is legal work. My attorney says I should never expect to be paid. He doesn’t expect to ever get paid for the work he has done, and I’m well below him in priority to the state.
But, crooked contractors (road construction) goes on all over the state because it is fed money. And those contractors are very very well connected to the dems. Little shops like mine got shafted hard.
Oh and btw, on a further note, as the years went on, our state passed laws that we had to pay a “living wage” to our employees. We paid a good amount above union scale, but had a 401k that they could contribute to and we would match up to what was allowable over the years. Well, as time went on, more and more cities refused our bids, citing that our 401k did not meet “the living wage” and only a pension could qualify. Which meant, you had to be union. Even though our 401k had a better pay out for the investment, it was still considered not a “living wage”. I could go on and on about it, but that’s enough I reckon.
Attention all teachers - you want taxes to make up for this and so do we - all teachers’ taxes will triple until we get this pension deficit under control. That is all - over and out.
Where can I buy a mattress that doubles as a safe?
Seems the only way to ensure savings of any kind. And, these days, the interest is even better than most financial institutions
At least this article got to the problem of educators retirements...the way the government handles them. And, I work for a school...so I am doubly concerned (believe me...my overall retirement will never get near $1 million...not even in my dreams...not even in your dreams)
Here in Florida, the state pension system was one of the best funded and solvent in the nation. Very much in the black, and, would have funded retirements for a loooong time. But, the state has raided the pension fund to fund the general state expenditures...and now Gov Rick Scott has pretty much put the first state income tax in Florida on anyone in the retirement system...as their 3% supposedly to go into the pension fund is being used for the general fund (hence it is an income tax).
Now, there is a lawsuit to either give that money back, or, move into the pension. Which means the state taxpayers are on the hook for about $1.5 billion....because the state will lose the lawsuit as the Florida Constitution specifically outlaws a state income tax.
I would prefer to use my own money to fund my own retirement...and not rely on the government...or have the government force me to use their retirement. Most would want so also
Everyone should pay attention to their spending and retirement funding/financing in their state and local areas. There is a upcoming disaster brewing with these pensions...even in states that seem to be solvent. Florida was once quite solvent...but not anymore.
My wife has been paying 8.9% out of her monthly paycheck for over 20 years; her state teacher pension all comes from her own contributions. Every state is different. Here in Alaska, they have changed the pension formula three times over the last 30 years. I have a hunting buddy who retired after 36 years, (he had been a Marine Captain for 8 years and was able to put those years toward teacher pension), anyway he taught for 32 years. He got $4400/month from his retirement when he did retire. I hear all the stories & huge pension amounts but honestly I don’t think they are all that high. Every state is different.
Every state is different
The state of Florida specifically funded the pensions for many years until 2011...when the state required everyone to contribute 3% per paycheck to the fund....however that money is going into the general fund...and the state contribution to the pension is much less. Sad part is that Florida would not have pension fund issues if it was not for government overspending by both parties (DNC and GOP)
I will never see $4400 per month in retirement...and thank God I am using other means to fund retirement. I would rather just fund my retirement, wholly, on my own
Shaking head...
My brother, a retired Chicago teacher, was recently notified he has been receiving too much money from his pension. From now on he will not get a cost of living raise. But I doubt that will help much with Illinois pension crisis.
http://www.chicagonow.com/state-of-your-state/2012/11/illinois-pension-crisis-now-unfixable/
Tagline match!
Keeping the money you stole depends on what caste you are in. If you rob from the ruling class (Democratic politically correct) your profits are confiscated. If you are a member of the ruling class and get caught stealing tax dollars you get to keep it all including your pension. Because it’s for the greater good and the children.
“SEE ME”
If he collected for 20 yrs that’s over 1 million guaranteed. Other people that need to have their retirement earn money while their collecting are screwed because of the low interest rates.
Maybe that's already begun, with many long-term unemployed cashing out their 401K's to pay for necessities...and getting hit with standard tax +10% penalty in the process.
Seriously though, nowadays most teachers pay all of their own retirement contributions.
Here's the reason why teacher's pension plans are broke. Back in the 80's, our good Repub legislators up here in Alaska had some NYC financial consulting firm do a study and come to the conclusion that the stock market would go up forever and under the original teacher pension plan the state did make contributions; but they haven't for almost 20 years now. Well, the NYC firm said there's was no reason for the state to continue contributing and they stopped. The state teachers said no way, part of the contract and there would be future problems. All these years later the original teacher pension plan is now under funded, just like the teachers warned. It will never go broke, cause all the new teachers pay their own pensions and Alaska has future mineral wealth. When Palin was our good Governor and she was a great Governor; she wanted to send pension system a billion from one of our state oil money funds to make it right. Reason was she said when the Alaskan People found out that our Repubs were responsible, they'd lose the election, ha ha. She was right too. So, I figure most of this pension under funding has to do with corruption anyway. True story.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.