patrick.net

What will happen to your pensions Red State Rep/Con/Teas?
You know the Right is against entitlements? Red State city govt. is a great place to start eliminating these Socialist Programs.

HEY YOU says

What will happen to your pensions Red State Rep/Con/Teas?

You know the Right is against entitlements? Red State city govt. is a great place to start eliminating these Socialist Programs.

It won't just be the red states who will eventually eliminate these programs. I am sure at some point all states will because they're just to costly.

HEY YOU says

You know the Right is against entitlements?

you put in 100 in taxes and get out 300 somehow...

if not a ponzi scheme sounds broken to me.

where did the 200 come from ?

Reminds me of the CA govt working getting something like $400K upfront
and over 100K in pension. Heck my vacation pay is capped at max like
everyone else in private industry... use it or lose it...
yet these govt workers dont cap their vacation accrual... and ring it up
based on final wage/salary rates.

thomaswong.1986 says

HEY YOU says

You know the Right is against entitlements?

you put in 100 in taxes and get out 300 somehow...

if not a ponzi scheme sounds broken to me.

where did the 200 come from ?

Reminds me of the CA govt working getting something like $400K upfront

and over 100K in pension. Heck my vacation pay is capped at max like

everyone else in private industry... use it or lose it...

yet these govt workers dont cap their vacation accrual... and ring it up

based on final wage/salary rates.

Yep. Some people who work for CA would get an entire years or more worth of income just from accumulating vacation leave and retiring. It's ridiculous.

Stockton, Detroit... Chicago is next! You think the brew-haha in Wisconsin was a big deal? It will look like a Book Club Meeting if Chicago doesn't address its fiscal irresponsibility. Start wearing the body armor, Rham!

AverageBear says

Stockton, Detroit... Chicago is next! You think the brew-haha in Wisconsin
was a big deal? It will look like a Book Club Meeting if Chicago doesn't address
its fiscal irresponsibility. Start wearing the body armor, Rham!

The lyin' sack-o chimes in with more of his BS. Does Illinois allow municipal bankruptcy?

spydah_hh says

HEY YOU says

What will happen to your pensions Red State Rep/Con/Teas?

You know the Right is against entitlements? Red State city govt. is a great place to start eliminating these Socialist Programs.

It won't just be the red states who will eventually eliminate these programs. I am sure at some point all states will because they're just to costly.

I agree.
I can see pension collapse in all states. Detroit might be the precedent. I'm just waiting to see how happy Red State retirees will be with cuts in "Big Govt." pensions since we hear all the talk about smaller govt.

Rep/Con/Teas are such easy targets.
BTW,I didn't vote Democratic.

HEY YOU says

I can see pension collapse in all states.

But, was it pension debt that led to Detroit's BK?

Look at this:

http://www.governing.com/gov-data/municipal-cities-counties-bankruptcies-and-defaults.html

Bankrupt Cities, Municipalities List and Map
729 2.8k 34 22
Share on email Many local governments across the U.S. face steep budget deficits as they struggle to pay off debts accumulated over a number of years. As a last resort, some filed for bankruptcy.

If they don't have the money what are they to do? They can't pay people with IOY's.

Either way this is a result of years of theft and mismanagement. Unions got what they had coming to them.

upisdown says

But, was it pension debt that led to Detroit's BK?

Yes, it was. Detroit has about 18 billion in debt and about $9 billion of that comes from retiree pension and health care obligations.

No way the city will be able to recovery without attacking both pension benefits.

http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/19/detroits-pension-problems-in-one-chart/

spydah_hh says

Yes, it was.

Spider/bear, whatever. But seriously, a blog?

Well, the governor of Michigan says you're full of crap.

"Now's our opportunity to stop 60 years of decline," Snyder said at a Friday news conference with Orr. "How long had this been going on and people were kicking the can down the road and not doing something? We're doing something."

Snyder has said that 38% of the city's budget is being spent on "legacy costs," such as pensions and debt service.

http://money.cnn.com/2013/07/18/news/economy/detroit-bankruptcy/index.html

FortWayne says

Either way this is a result of years of theft and mismanagement. Unions got
what they had coming to them.

You're advocating that employers steal from their employees?

You MUST be a right winger.

upisdown says

spydah_hh says

Yes, it was.

Spider/bear, whatever. But seriously, a blog?

Well, the governor of Michigan says you're full of crap.

"Now's our opportunity to stop 60 years of decline," Snyder said at a Friday news conference with Orr. "How long had this been going on and people were kicking the can down the road and not doing something? We're doing something."

Snyder has said that 38% of the city's budget is being spent on "legacy costs," such as pensions and debt service.

http://money.cnn.com/2013/07/18/news/economy/detroit-bankruptcy/index.html

Right that is correct 38% is spend on pensions. But what's not counted in that 38% is the health care costs associated as well. When you combine both of them (you can even check Detroits balance sheet). The costs goes over 50%.

But even then, 38% is still a big chunk of your finances that goes towards people who don't even work for the city.

Sorry to say it's not a sustainable cost.

upisdown says

FortWayne says

Either way this is a result of years of theft and mismanagement. Unions got

what they had coming to them.

You're advocating that employers steal from their employees?

You MUST be a right winger.

Honestly, I am advocating that Unions steal from employers. Which is why most private sector jobs around the world got rid of them.

And a big reason why public sector jobs (Cities, States, and etc) who still hold onto to unions demands are tanking.

spydah_hh says

Right that is correct 38% is spend on pensions.

Can you read?

Snyder has said that 38% of the city's budget is being spent on "legacy costs," such as pensions and debt service.

FFS, your own post said that it was half ($9Billion of the $18 Billion), and then you claim it was all the debt, just how stupid are you?

spydah_hh says

And a big reason why public sector jobs (Cities, States, and etc) who still hold
onto to unions demands are tanking

Maybe you should learn a few things like:

Deferred compensation
An amount that has been earned but is not actually paid until a later date, typically through a payment plan, pension, or stock option plan.
http://financial-dictionary.thefreedictionary.com/Deferred+Compensation

And;

Definition of 'Deferred Compensation'

An amount of earned income that is payable at a later date. Most deferred-compensation plans allow the wage earner to defer tax now so that the funds can be withdrawn and taxed at some point in the future.
Investopedia explains 'Deferred Compensation'

The most common form of deferred compensation is a retirement plan. Deferring income allows the earner to use the income later in life when they have a lower tax rate. Other examples include pension plans and stock-option plans.

http://www.investopedia.com/terms/d/deferred-compensation.asp

Not to mention WHY there are constitutional protections against whacking away at public employees' pensions, because of the ability of right wingers to skip payments and underfund public pensions. Michigan has a section of their constitution to specifically address public pensions, as do many other states.

FYI, if you bothered to read the link above that I gave, it would show you why the majority of municipal bankruptcies are for failed public projects, and not for pensions(although the common theme for piss-poor public fund (mis)management coincides with underfunded pension funds).

upisdown says:
" Many local governments across the U.S. face steep budget deficits as they struggle to pay off debts accumulated over a number of years. As a last resort, some filed for bankruptcy."

It might take a forensic accountant to figure out how many public pension plans are in trouble but of course no one would hide any problems.This mess could harm many retirees.
An exciting future ahead for many.

HEY YOU says

It might take a forensic accountant to figure out how many public pension
plans are in trouble but of course no one would hide any problems.This mess
could harm many retirees.
An exciting future ahead for many.

I don't disagree with you, and am really surprised that a collective group of employees would allow things to get that far out of whack. It wasn't unrealistic earnings or the feasibility of those plans, it was the state's portion of the funding that was lacking.

Case in point, was Wisconsin's public pension fund. Contrary to most claims, it was funded at 80% although the participants paid little to nothing(1% or less or none at all), but it WAS and IS funded. Now the same participants pay 5.8% to 6.65% and the benefits never changed before or after. That won't last for long though as Walker will use that excess money as a slush-fund to make up for his budget shortfalls, just as other states have in the past, namely Illinois.

Oops, what's this?

Has Detroit over-inflated its pension liabilities?
http://blogs.reuters.com/muniland/2013/07/23/has-detroit-over-inflated-its-pension-liabilities/

How much does the city owe? Orr says Detroit has nearly $20 billion in debt and long-term obligations. Pension funds and bondholders have said in the past he’s inflating the numbers. Why would Orr do that? Because the more dire the city’s finances seem, the more aggressive he can be in pushing for concessions. Also, to be eligible for bankruptcy protection, the city must prove that it’s insolvent, meaning it has no way to pay its debts.

In 2004 and 2005, Detroit issued two sets of pension obligation bonds (Certificates of Participation) to fully fund the city’s pensions with an additional $1.5 billion. This is why, when I started looking at Detroit about 18 months ago, the pensions were surprisingly well-funded. Those pension bonds have now been lumped with general obligation bond debt, pension shortfalls (unfunded liabilities) and retiree health care as unsecured debt, which Orr intends to haircut.

The retiree health care value has been carried on Detroit’s books at the level that Orr cites for some time. But the unfunded pension liability has always been listed on Detroit’s financial documents as $650 million, rather than $3.5 billion that Orr claims. The pension shortfall was even listed as $650 million in February by the state’s Detroit Finance Review Team. What happened? Here is Blackrock’s Peter Hayes on the topic:

There is question as to whether the EM’s plan is inflating pension and OPEB liabilities. The unfunded pension liability was adjusted from $650 million reported in 2011 to approximately $3.5 billion—increasing more than five times over two years through unspecified changes to accounting assumptions. This $3.5 billion now represents nearly one-third of the amount Detroit owes to its unsecured creditors, and raises required pension contributions to approximately 100 percent of the city’s $1 billion forecasted budget deficit over the next five years. OPEBs, which were never funded in the past, now have the largest claim at an estimated $5.7 billion.

Or This;

Detroit’s financial criminals leave evidence the size of a hockey stadium

http://crooksandliars.com/2013/12/detroit-s-financial-criminals-leave

If future generations want to understand why the current era is sometimes referred to as a new Gilded Age, they need look no further than Detroit. The city’s financial troubles have far more to do with deindustrialization, destructive trade policies, population loss, political mismanagement and Wall Street’s shady municipal rip-off schemes than it does public pension liabilities.

Yet, as you might have heard, a judge yesterday handed down a landmark ruling allowing Michigan officials who took control of the city to violate the state’s constitution and slash the average $19,000-a-year pensions of Detroit’s municipal retirees. This ruling is already being touted as a precedent setter for places like California, where a pension-slashing ballot initiative campaign is already underway and where some cities are trying to get out of paying the pension promises they made to retirees.

In celebrating the ruling that allows him to now economically punish fixed-income pensioners, Kevyn Orr (an appointee of Michigan Governor, Rick Snyder) said:

“There’s not enough money to address the situation no matter what we do,” he said. “That is clear.” At another point, he said of the pension question, “We’re trying to be very thoughtful, measured and humane about what we have to do.”

(Emphasis mine.)

In this particular financial crime, the incriminating piece of evidence isn’t some tiny fingerprint or shred of clothing. It’s a professional hockey stadium. As CNN/Money reported back in July (but as almost no media outlet reported in their bankruptcy stories in the last 24 hours):

New $444 million hockey arena is still a go in Detroit

Detroit allegedly faces a 30-year, $3.5 billion pension funding gap (and its worth stressing the word “allegedly”). That’s about $100 million a year. At the same time, Michigan spends $6.5 billion a year on taxpayer subsidies to corporations. So when the politicians running Michigan’s state government claim there are no resources that could shore up the pension plan, that’s just not true. What is true is that there’s plenty of money for the state and city to meet the pension promises they made to public employees – but politicians in charge of spending want that money to go to corporations that disproportionately fund politicians’ election campaigns. To insist otherwise – to do what Orr is doing and pretend there’s no money around – is just shockingly dishonest.

But then, it’s not shocking in the sense that this is now the trick du jour.

At the municipal level, for example, only a few weeks before Detroit’s ugly tale began to unfold, nearby Chicago saw politicians plead poverty to justify one of the largest mass public school closings in recent history all while insisting they had plenty of money to funda $173 million taxpayer subsidy for the construction of a private college’s basketball stadium.

Oops again, (now waiting to see if this is deleted).

Wednesday, Nov 20, 2013 10:00 AM CST
How Wall Street — not pensioners — wrecked Detroit
While clueless elites continue to blame "reckless public pensions," a new report tells a very different story

http://www.salon.com/2013/11/20/how_wall_street_not_pensioners_wrecked_detroit/

It is a similar story in Detroit, even though you probably haven’t heard about it. What you’ve probably heard is that the city’s “legacy expenses” jumped by $62.8 million between 2008 and 2013 — and you’ve probably heard pundits recklessly assume that “legacy expenses” are the same as retirement benefits. But such an assumption hides what’s really going on.

As Turbeville shows, in the five years leading up to today’s crisis, the city’s pension contribution expenses were essentially flat. Yes, its healthcare contribution expenses increased, but they rose by less than the nationwide annual increase in healthcare expenses, meaning Detroit experienced nothing out of the ordinary on that score. So if benefits didn’t drive the legacy cost increases, what did? As Turbeville documents, it was fees, financing costs and payments incurred by Wall Street’s swap scheme. Those expenses constitute more than 61 percent of the total legacy-cost jump.

In his report, Turbeville notes that “the banks are now demanding upwards of $250-350 million in swap termination payments” in order to let Detroit out of the apocalyptic swap scheme. In an actual bankruptcy, creditors might have to forgo some of those fees — or in the industry lingo, they might have to “take a haircut.” But in the era of bailouts, ordinary Americans have to take haircuts, but Wall Streeters almost never do. Thus, the banks’ demand for termination payments has been turned into yet another opportunity for the financial industry to swindle Detroit taxpayers. Specifically, Detroit’s Republican-appointed emergency manager is pushing the city council to take on an additional $350 million in debt from a new loan with Barclays.

Bloomberg News notes that Barclays’ infusion of capital won’t go to supporting city services nor to preventing cuts to the city’s average $19,000-a-year pensions. Instead, officials are pushing draconian pension cuts, while the lion’s share of the Barclays loan — $230 million — would go to pay Bank of America’s termination fees in the old swap deal. As if deliberately underscoring how all of these machinations serve to enrich Wall Street rather than to support the city, Detroit officials have tried to keep the fees associated with the new loan secret. As the Detroit Free Press reports, Barclays attorney admitted that “revealing the fees could invite competitors to offer financing to Detroit at a better rate.”

In other words, the bank aimed to keep the terms secret in order to keep bank profit margins as high as possible.

Your story adds nothing to the fact that a ponzi scheme of "guaranteed" returns WILL fail unless you adjust payouts to what you have actually taken in - that's a mathematical truth. Oh, bankstas are scumsucking assholes who rape you with fees wherever they can?? Thanks for the newsflash! Go complain to Obama about it who has done exactly.... nothing, no wait, he rewarded them with zero prosecutions and bailouts. That makes it even worse for the city officials to make deals with such scum, where are the handcuffs? As for the people, well they kept voting them in. That's what you get for more of the same. Oh we fucked up although we should have known that returns cannot be "guaranteed", so let's rape the coming generations to make up for that. Fuck that.

FortWayne says

If they don't have the money what are they to do? They can't pay people with IOY's.

Either way this is a result of years of theft and mismanagement. Unions got what they had coming to them.

I'm confused, governments fail to fund the plans as they are required to do or actually steal what employees have paid in and it's the union employees fault? How exactly does that work in your world? Don't let reality impinge on your beliefs.

Time and time again people voted in the politicians who sold out to the public employees unions (thank you JFK for allowing public employees to unionize, dumb move). People always vote in the best liar hoping that what they promise is true. Everyone is to blame. Look in the mirror.

upisdown says

FortWayne says

Either way this is a result of years of theft and mismanagement. Unions got

what they had coming to them.

You're advocating that employers steal from their employees?

You MUST be a right winger.

Unions mismanaged, unions stolen the money and made promises they knew they could not fulfill. That has nothing to do with private sector, this is all public sector and their bullshit entitlement mentality.

bob2356 says

I'm confused, governments fail to fund the plans as they are required to do or actually steal what employees have paid in and it's the union employees fault? How exactly does that work in your world? Don't let reality impinge on your beliefs.

Time and time again people voted in the politicians who sold out to the public employees unions (thank you JFK for allowing public employees to unionize, dumb move). People always vote in the best liar hoping that what they promise is true. Everyone is to blame. Look in the mirror.

I don't follow what you are saying. But I believe it is all union fault. They spent the money they didn't have and mismanaged their own expectations. Time for them to reap what they sowed.

Anyone catch the, Reuters article about how Stockton cancelled it's health care obligations to retiree's, saving x million. Turned out to be 500,000 per employee pension saved. Hmmm..

A big part of the problem is, when did this shit all of a sudden cost to much. It's a country wide issue that is still accelerating.

Sadly, all this big pension money mostly goes to people, many who worked lower middle class jobs, but also others who earned higher salaries of today, which I insist is a problem that was not built into pensions bargained for when salaries were much lower. Yet these payouts go to the harbingers of the economic machine. Google happiness machines.

And all of our own creation!

http://www.pensiontsunami.com/

yeah, pensions are a pretty big deal going forward, a real cock-up of representative government (it's easy for any system to make promises 30 years out, since the promise makers are going to be long gone when the promises come due).

The best solution is to just tax the evil "Bankstas" to pay off the promises; win-win for everyone apparently.

FortWayne says

I don't follow what you are saying. But I believe it is all union fault. They spent the money they didn't have and mismanaged their own expectations. Time for them to reap what they sowed.

You don't know what you are talking about. Public employee unions don't manage their members pension funds, the government agency that employs the workers does. The reason these plans are in so much trouble is the governments have failed to fund the plans, even when legally obligated to do so. So again, how is it the unions fault these plans are underfunded?

bob2356 says

So again, how is it the unions fault these plans are underfunded?

Unlike IRA/401k, If your underfunded, your expectations on growth of the fund
NAV based on final payout requirements was unrealistic. Way way too high!

so now what.. more taxes on the public due to inflated salaries on the back end.

It just doesnt work ... regardless of who has to fund it...

bob2356 says

You don't know what you are talking about. Public employee unions don't
manage their members pension funds, the government agency that employs the
workers does. The reason these plans are in so much trouble is the governments
have failed to fund the plans, even when legally obligated to do so. So again,
how is it the unions fault these plans are underfunded?

LOL, you nailed it. That's why Mush is so stupid, he doesn't even bother to learn enough about those pensions to even have a legitimate reason to despise them.

mell says

Your story adds nothing to the fact that a ponzi scheme of "guaranteed" returns
WILL fail unless you adjust payouts to what you have actually taken in - that's
a mathematical truth.

Enlighten us Sir John Templeton. Tell everybody exactly how
and why your BS assertion has any value.

upisdown says

mell says

Your story adds nothing to the fact that a ponzi scheme of "guaranteed" returns

WILL fail unless you adjust payouts to what you have actually taken in - that's

a mathematical truth.

Enlighten us Sir John Templeton. Tell everybody exactly how

and why your BS assertion has any value.

1) You "guarantee" X % annualized returns

2) For various reasons the fund does not get funded appropriately and/or money is diverted and/or the "projected" returns fail to materialize

3) You end up having less money in your fund to distribute

Option A) You adjust the payout = Balanced system

Option B) You pay out all the monies you "promised" to everyone by taking on new debt and/or increasing the payout for future employees and/or finding more to pay in if you can and "project" that doing the same thing over and over again will yield different results = Ponzi scheme

mell says

1) You "guarantee" X % annualized returns

2) For various reasons the fund does not get funded appropriately and/or
money is diverted and/or the "projected" returns fail to materialize

3) You end up having less money in your fund to distribute

Option A) You adjust the payout = Balanced system

Option B) You pay out all the monies you "promised" to everyone by taking on
new debt and/or increasing the payout for future employees and/or finding more
to pay in if you can and "project" that doing the same thing over and over again
will yield different results = Ponzi scheme

LOL, baffle 'em with bullshit, huh. Your usual incoherent rambling won't work, and you're actually dumber than what I originally thought that you were.

Go back to your mom's basement.

anonymous says

"What if 3 percent is the new 8 percent? Institutional investors such as
pension funds have typically built in return assumptions of 8 percent a year—a
rate some of them have not achieved for more than a decade."

Article: Facing new reality, funds assume lower returns

http://www.cnbc.com/id/101271874

Typically? So, in other words you have not even the slightest idea what the actuarialist used to figure for funding %ages, and then you linked some benign and vague anit-pension story.

I guess(????) that's better than what the other moron burped out?

bob2356 says

You don't know what you are talking about. Public employee unions don't manage their members pension funds, the government agency that employs the workers does. The reason these plans are in so much trouble is the governments have failed to fund the plans, even when legally obligated to do so. So again, how is it the unions fault these plans are underfunded?

It's their plans, they had plenty of say about how they should be ran and managed. They didn't care to price for risk did they? Where is their safety net? Maybe an average union worker is clueless about it, but union managers and lawyers all knew. The top made out like bankers out there, leaving table scraps to workers.

So yeah it is their fault. And if there was an ounce of justice, this government would claw back all the crony stolen capital from there. Instead of okeing the theft and just backing the losses with taxpayer dollars.

Being irresponsible shouldn't be insured by taxpayers. It puts a burden of someones personal irresponsibility onto others, and that is not justice.

FortWayne says

It's their plans, they had plenty of say about how they should be ran and managed. They didn't care to price for risk did they?

You are 100% incorrect. The employer handles everything. The union has no say in it.

The company (or government) negotiates the details of the pension plan with the union--after that it's up to the company (or government) to ensure that there is money available to fulfill their obligations just like they ensure they have money available to meet payroll or pay their suppliers.

FortWayne says

It's their plans, they had plenty of say about how they should be ran and managed.

You don't let facts interfere with your ideology do you? Here I'll try to save you from further embarressing yourself. Here is wiki on calpers

"The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families"

That executive branch stuff means the state government not the public employees unions. Honest it's true, you can look it up. It's the same for the rest of the states also.

bob2356 says

FortWayne says

It's their plans, they had plenty of say about how they should be ran and managed.

You don't let facts interfere with your ideology do you? Here I'll try to save you from further embarressing yourself. Here is wiki on calpers

"The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families"

That executive branch stuff means the state government not the public employees unions. Honest it's true, you can look it up. It's the same for the rest of the states also.

Actually unions do have a say. They don't manage the funds no, but they do have some power to change how it's operated. Back in 19991 Pete Wilson wanted to use some of the pension funds to reduce the CA deficit however, the union and employees were not happy about that so they help push for Prop. 192. Of course it was voted upon by the public but the Unions were at the forefront of the message.

With that said CALPERS/STRS runs and operates the pensions. However, when things go bad such as when California receives less tax income or can't fund its operations due to the lack of selling bonds they have to make cuts. Unfortunately California is unable to cut pensions (thanks to prop 192). So it's still obligated to pay pensioners what they're promised even if California doesn't have the funds to do so due to a downturn in the economy. Or better yet when Calpers/strs investments go bad, they're still on the hook for the promises that were made, which makes it unsustainable.

Can't Prop 192 be repealed?

APOCALYPSEFUCKisShostikovitch says

The Chinese will buy Detroit at the auction and take the surviving population as slaves, and replace them with pioneering settlers from the Western provinces, who will prepare America for final foreclosure and colonization.

That's a pretty racist statement considering Detroit is 90% black, and is run almost exclusively by black people. Also why do you think the Chinese would want them for slaves? Given Asian attitudes toward people with dark skin, I'd bet first on a new Great Wall of Detroit to keep non Chinese out.

bob2356 says

You don't let facts interfere with your ideology do you? Here I'll try to save you from further embarressing yourself. Here is wiki on calpers

"The California Public Employees' Retirement System (CalPERS) is an agency in the California executive branch that "manages pension and health benefits for more than 1.6 million California public employees, retirees, and their families"

That executive branch stuff means the state government not the public employees unions. Honest it's true, you can look it up. It's the same for the rest of the states also.

And who elected Grey Davis to spike the hell out of pensions? Unions paid significant amounts of money there to screw the public. It's why the state is out of money these days. We are still paying for what that crook and his union thugs did before the recall.

Unions in CA are killing the golden goose just like other unions did in Detroit.