If someone promises you something 40 years in the future and it doesn’t happen, they did not necessarily lie to you. No one has a crystal ball to see that far ahead.
Especially when those promises are not based on reality. The company I work for has a fully funded pension, at least they tell us it is, that is based on reality. It’s not a six figure retirement like we see in the public pensions.
Correct. But the courts don't see it that way. In Illinois, a judge simply ruled that the state had to not only pay every penny of pensions earned by retirees, but it also had to pay every future pension of workers.
Illinois Supreme Court rules landmark pension law unconstitutional
I have a relative who is a retired police officer. His pension is a very healthy six figures.
In many high tax states, the retired teachers and administrators qualify for their pensions......and then run screaming for the hills to another state so that they don't have to pay the high property and other taxes of the state that is funding their generous pensions.
Should be a Federal Law that requires states to budget for each year to a locked down individual account similiar to the 401K provisions. Some of these contracts are ridiculous. I saw some Rep Congressman on TV saying in his hometown, where average home prices are about 75K, the Supt of Education got 400K and 300K a year in pension. Isn’t it funny how states want their rights and then come for National taxpayers to bail them out.
Perhaps - but when the promise is constantly renewed over them 40 years, whether by actual renewal or by not removing the promise from the “rules book”, it takes on a different tone - especially with a State, which doesn’t just go away like many businesses...many businesses will, “retool/rebrand” to change enough so they no longer have to honor their 20 year or even lifetime warranties...States can’t do that.
Back in 1970 in high school, some of my friends asked, “whaat if I buy these savings bonds but when they mature the government won’t honor them.” I told them that if we lived in such a world, that would be the least of your problems.
I still feel that way about the fedgov. But this state stuff is different. States can’t print money and there are all sorts of things they can do to harm citizens, depending on how much they control their citizens’ lives.
If your life savings is in Social Security and Precious Metals hidden in your mattress, there is not much they can do to you other than create massive price inflation, don’t raise SS in response, and confiscate your pm’s at a set price. They did the latter almost a century ago, so they’ll have a hard time doing it again, but I fully expect the price inflation. They can’t just hand out money like it’s free breath mints and not expect prices to rise in response.
But when the state controls your savings, watch out. You may be set for a very bumpy future.
Back in 1970 in high school, some of my friends asked, “whaat if I buy these savings bonds but when they mature the government won’t honor them.” I told them that if we lived in such a world, that would be the least of your problems.
I still feel that way about the fedgov. But this state stuff is different. States can’t print money and there are all sorts of things they can do to harm citizens, depending on how much they control their citizens’ lives.
If your life savings is in Social Security and Precious Metals hidden in your mattress, there is not much they can do to you other than create massive price inflation, don’t raise SS in response, and confiscate your pm’s at a set price. They did the latter almost a century ago, so they’ll have a hard time doing it again, but I fully expect the price inflation. They can’t just hand out money like it’s free breath mints and not expect prices to rise in response.
But when the state controls your savings, watch out. You may be set for a very bumpy future.
If someone promises you something 40 years in the future and it doesn’t happen, they did not necessarily lie to you. No one has a crystal ball to see that far ahead.
The states in actual rather than actual jeprody should reduce cash payouts by 50% with a voucher for the balance. The voucher would amount to a 15 or 20 year bond that can be sold to a bank.
In 1999 California Governor Gray Davis signed into law the largest pension increase in state history, allowing retirements to those as young as 50 at 90% of their final year salaries, for the rest of their lives. He relied on ‘economists’ who predicted an absurd increase in the Dow Jones index to 28,000,000 by the year 2099. The pension fund would be swimming in so much money that the actual pensions would cost California peanuts.
Of course we all know this was a fantasy. A destructive fantasy.
http://pensionpulse.blogspot.com/2010/05/calpers-dreaming-of-dow-28000000.html
I would cut the pensions to under 100,000
In Calif the retirees are starting to get 100k pensions and can double dip with thousands more in the near future. In Chicago they already have thousands making 100k salaries and can double and triple dip.