Posted on 06/29/2022 9:36:26 AM PDT by RomanSoldier19
They write one of these articles monthly it seems. Just softening the public for the big bill that will land on our kitchen table to bail out this fuzzy math that never could work.
the solution is simple:
Convert the defined benefit pensions to a 401(k) or 457 style account where the employee and the employer can contribute to the account and the employee only gets out of it what they put into it.
And government MUST be barred from ‘borrowing’ from these accounts.
It looks like a circle of Mormons praising a Jello mold!
People planning on retirement plan a 3-4% return. Public pensioners are getting the equivalent of 20%, simply not mathematically sustainable. The principal is running out. The politicians and union heads knew this was kicking the can down the road for votes and power.
“Pensioners agreed to work being given specific pension terms & conditions.”
The taxpayers have Amendment V rights. If pension recipients were promised more than fair total compensation by general societal standards it is the pension recipients that need to adjust.
In this mudpuddle of a city where I live the former mayor raised property taxes so high that there was no place from Key West to Kansas City that had higher property tax rates.
When people complained he said “If you don’t like it you can leave”.
Then for two decades the county adjacent to the city was the fastest growing metropolitan area in the country.
The next time you read about a lifeguard in CA earning $510K in his final year before retirement - you will understand what the problem is. Many states have shorted the contribution to the pension fund that would be necessary to pay current and future obligations. Kentucky is the worst on a % basis, CA is hugely underfunded on a $ basis. Illinois manages to achieve both at something near 50% of the funds needed to pay future obligations. Other states are nearly fully funded, and a few are slightly overfunded. The states that are responsible will end up subsidizing those that are not. Some states are allowed to reduce benefits to retirees, others (see Illinois) are not and are locked in to raising taxes to supply the shortfall.
Always keep your eye on the ball and watch the federal distributions to states, especially in times of a crisis like COVID. Biden rewarded IL and other states with a slush fund, and IL used it to make a $2.5B payment to their pension fund earlier this year.
If states really are laboratories of democracy, they need to be responsible for their own virtuous or not so virtuous behavior when it comes to running their state public employee pension funds. No cross subsidization from the Federal government!
LOL. Public pensions may indeed be in bad shape but it is certainly not due to a six month downturn from all time highs in the market. Pension funds have to be managed as long term investments.
“Governments that over-promised and mismanaged funds are the culprit.”
I think mismanagement has been quite limited. New Jersey and San Diego are the only examples I can think of.
Illinois has many pension problems.
Also get rid of public employee unions or at least ban them and public employees from making campaign contributions!
As it stands now there is no restraint on public employees demanding benefits. They can get right around any prudent effort to manage said employees by enlisting politicians who get their donations.
If you listen to public employee & teacher union reps any attempts to restrain them puts the public employee in Blair Mountain territory.
“in his final year before retirement”
New York City and Illinois are known for final year pension system abuses.
If you invest in a company’s stock, you are a limited liability owner. Once the company is bankrupt, you are not responsible for their debts
That’s not true for government. Once it is insolvent, everyone is responsible for its debts. Society and the taxpayer (you) will be forced to pay double, triple, whatever, via direct taxes or massive inflation - to fulfill its obligations.
Underfunded Liabilities are the problem to the answer of COVID-19 and Vaccines.
I think Republicans can win elective office in majority blue states by promising to send to the state legislatures a federal constitutional amendment limiting property taxes.
Roll them into the ss system. Public workers should match the general public’s benefit level
Trying to avoid public pension reforms by causing real property prices to soar has caused a lot of harm to a lot of people.
Agreed
Yes, but other people will be forced to bail them out.
There will come a point when if forced to pay ( a yet determined amount of my income) that I’ll retire early (as will many others) and let the system sink.
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