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Another One Bites The Dust

The Virginia retirement system, one of the few systems in the country to be in reasonably good shape just a few years ago, is in trouble, says the Washington Examiner.  The reason: poor returns in the markets and cretinous, cowardly decisions by the legislature to cut the state contributions to the fund in order to pay urgent bills. The gap is now estimated at $20 billion.

Note to legislators and people of Virginia: hope is not a plan.  The question is who are the political panderers in the legislator lying to: voters or state workers?  They are lying to someone — they are making promises that they know cannot be kept.  Are they planning to raise taxes and cut services at a later date to honor their retirement promises to employees, or are they planning to stiff retirees in a few years when the money is gone?

Maybe they are hoping that fairies from Neverland will sprinkle Virginia with magic pixie dust that causes golden toadstools to grow on state property, thereby funding the pension obligations in future years.  But unless something like that happens, Virginia is sleep walking toward disaster.

Apparently, neither voters nor state employees care that the state government is walking off a cliff.  Some day, they will.

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  • Kenny

    1. Under no circumstances should taxes be raised to cover pension costs. Instead, the obscene benefits should be cut.

    2. And please, don’t not use the term ‘government workers.’ Given the slow pace at which they move, ‘government employees’ is more appropriate.

  • Walter Sobchak

    The one who accepts promises in lieu of cash is the one who will suffer:

    “Otter: Flounder, you can’t spend your whole life worrying about your mistakes! You f[oul]ed up… you trusted us! Hey, make the best of it! Maybe we can help.”

  • Mahon

    Fairies from Neverland aside, what they are hoping is that the S&P500 will be 30% higher 2-3 years from now and go up 6% pa from there, which would make things look a lot better. It has happened before, but it’s hard to see why it should happen now unless we really change direction in this country (and elsewhere.)

  • LarryD

    I’ll bet that defined contribution plans will start to look pretty good, after enough pensioners get stiffed.

    At least you know your pension is being funded, and you aren’t being deluded that you have no risk.

  • Brian Klem

    Governments shouldn’t be spending money for such purposes in the first place, it undermine societal cohesion.

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