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Actuarial Establishment Tries to Suppress Explosive Paper on Public Pensions
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  • Gene

    I’m not so sure “reasonable accommodations made to allow the adjustment to take place in a less disruptive fashion” are necessary. This is one of those hugely important issues in 21st century life — a period in which vast numbers of people live in a world of pure, unknowing fantasy — that calls for a sharp slap across the face for the public.

    • Andrew Allison

      Gene has it right; “reasonable accommodations made to allow the adjustment to take place in a less disruptive fashion” is doublespeak for doing nothing.

      • mgoodfel

        Time is probably up anyway. I don’t think we have time for a transition period before pension payments become unaffordable to many local governments.

    • http://chicagoboyz.net/ TMLutas

      What the US Congress did with postal service pensions would qualify as “reasonable accommodations made to allow the adjustment to take place in a less disruptive fashion” and I would suggest it as a model for future reform.

  • Anthony

    I’ve linked this before but it’s still worth a look: https:www.scribed.com/doc/307464825/Hidden-Debt-Deficits-How-Pension-Promises-Are-Consuming-State-and-Local-Budgets-by-J

  • seattleoutcast

    CalPERS is deliberately misleading people. This is a dose of reality for anyone depending on the California pension to support them. Go ahead, FG and rebut this. If you depend on CalPERS, you’re on a sinking ship. There is justice after all–those greedy retirees can’t kick the can down the road for the younger members any longer.

    https://mishtalk.com/2016/08/03/calpers-pension-promises-myth-reality-whats-next/

    • FriendlyGoat

      It’s worth remembering that those “greedy retirees” mostly have children and grandchildren who are negatively impacted on inheritance and elder care if and when, as the “younger generation”, they cheer for the pension plans to go down. The same is true of the younger generation which might wish to trim Social Security and Medicare. Most of those have parents and grandparents.
      The “battle” is never as much between generations as we often hear.

      • Jim__L

        Sure, the younger generation will have to shoulder the burden directly. But it will shoulder as much of the burden as it can in each individual case. It will be able to say “I have to stop sending money now, I have other priorities” instead of having its money confiscated by the government (on pain of imprisonment). It will be able to make decisions to make more cost-effective choices, instead of (again) government imposing the cost and deciding someone else’s benefit.

        Is this a massive shift of authority and responsibility to the younger generation? Well, authority, yes. Responsibility, not so much — we’re responsible either way.

        It’s nice to have authority to go along with the responsibility. In fact, it’s a grave injustice the other way around.

        • Tall Talk

          why didnt the boomers, who voted in all these entitlements, why didnt they fund it?

          the burden is their’s not their grandchildren.

          • Jim__L

            In a just world, yes. But that’s not the world we live in.

      • seattleoutcast

        They took more than they deserved. Anybody who understands knows how members of the public union rig their retirement salary by working extra hours the last couple years of their career. The benefits are alos far greater than one would receive in the private sector. 40 to 70 thousand dollars a year in retirement salary? That’s theft.

        It is truly sad to see how our elders demand far more than what they paid in, to the point of destroying the system.

        • FriendlyGoat

          It would not bother me a bit if you can fire the supervisors who allow people to work unnecessary hours to pad a pension.

          • TGates

            No, we are talking about union rules, supported by pols, such as that outlined today in the NY Post about pensions for the NYFD. Average pension is $100K, plus free health insurance, but within that is the assumption that every retiree has lung and heart disability which pads the retirement payments and provides for tax-free income. That is why they have retired firefighters drawing disability but run marathons. NYFD pension is 55% funded.

          • FriendlyGoat

            It’s okay with me if Republicans make a point of reining in fire and police—–but, betcha don’t. You’re more likely to go after everybody BUT fire and police. Maybe, though, while Donald’s on a roll, you can get him to diss FDNY by name? Each new dumba$$ stunt from him is welcome on our side.

          • TGates

            Well that was coherent. Enjoy your $2300 a month max Pennyback payment. That is what the private sector gets due to corporate bankruptcies.

          • FriendlyGoat

            Pardon my incoherency. I’m just tired from being tag-teamed by you and all other conservatives. If you guys really wanted to win elections, you would have your party explaining how you are going to bring pensions back to the private sector. Yes, they are too high in some cases in the public sector, and yes they are too low or nonexistent in the private sector—-thanks to Republicans for that second part. For a large part of your voters who want to “make America great again”, you’re playing them for chumps. Where’s THEIR pension?

          • champ

            stop displaying your ignorance; private companies ceased with defined benefits because they can actually do math. The public sector runs on corrupt cronyism; elected officials promise unpayable benefits, and their union “employees” kick back to them with their campaign contributions and votes…and the rest of us suffer.

          • FriendlyGoat

            Private companies ceased with defined-benefit pension plans because a wave of conservatism in the political climate permitted them to do so—-AND—-tax cuts for the ownership of corporations actually encouraged them to do so.

            But, you have a contingent of working-class people who think that “making America great again” INCLUDES bringing them back “good” jobs with employers’ respect, job security, living wages AND those old benefits like pensions. Per the famous little book, “Who Moved My Cheese?”, they know their cheese has been moved away from them, but they don’t know who moved it, why they moved it, and that they don’t get it back by voting for the philosophy which drove the cheese to be moved away in the first place.

          • champ

            public pensions are unsustainable; enjoy your cocoon while it lasts….

          • FriendlyGoat

            I still say real working people will be better off trying to put pensions back into the private sector than being mad at those in the public sector who still have them. Yes, some of the public plans are too rich, but the private-sector people were completely cut out for no good reason and are clueless as to what actually happened in that regard.

          • champ

            not to repeat myself, but private companies ceased defined benefit plans because they can actually do math…but you wouldn’t understand that, would you..

          • FriendlyGoat

            I actually was a key player in administering a DB plan in manufacturing for 20+ years in the 70’s, 80’s and early 90’s. I happen to know that it still exists today and is more than fully funded. The idea that these plans were “impossible” for employers is just not so. The political window fell open for workers to be diminished in their status and expectations and many employers did it because they could and because lower taxes on earnings and dividends made it more attractive to Boards to do so—–not necessarily because those plans were swamping the companies.

          • champ

            You may have been involved in a private defined benefit plan 20 or 30 years ago, but you apparently didn’t have a clue as to what was coming. Any actuarial could see that defined benefit plans were unsustainable; therefor they were terminated.

          • FriendlyGoat

            Ours was not. Our founder/president had a Masters in Math and was not naïve about the actuarial calculations. He and his partner were just employee-minded and the higher tax rates of old certainly did not “hurt” the climate which existed in the 1970’s for deductible money to be spent on people (to avoid the taxes). Most folks today simply don’t understand that the lower the income taxes go on ownerships (public and private), the greater the pressure and inclination for managements to be tight with hiring, wages and benefits.

          • champ

            Whatever…again, enjoy your cocoon…

          • seattleoutcast

            Not really. If you work in a business, you’ll know how much regulations and taxes impede hiring. Of course, this doesn’t apply nearly as much to Wall Street and the larger corporations because of lobbying. And guess which party gets more money? Yep, the Democrats.

          • lhfry

            FG is right to a degree. It is possible to manage a db plan so that it can pay out what its retirees have been promised. However, in today’s world, where workers don’t stay on a job for 30 years, most private sector employers have abandoned their db plans. Usually they “freeze” them so that only the older employees who did stay on a single job for many years, receive a payout. Younger and new employees are offered a 401k or similar plan. Employees today move around and they want a portable plan.
            Many large private sector plans (airlines, steel industry, for example) faced gross underfunding too. What happened was that the administrators and/or the people who ran these companies promised employees better pension plans in lieu of increasing their salaries. Then they didn’t fund those pension promises. Many went bankrupt and the plans were taken over by the PBGC, under which the guaranteed benefit is much less than the promised pensions. The unions often colluded in this endeavor, cheating their members in the process. The multi-employer plans, many run by unions, are today also grossly underfunded and the proverbial s is about to hit the fan for those pensioners. http://www.usnews.com/news/business/articles/2015/06/17/government-paves-way-for-multiemployer-pension-plan-cuts
            Many people still haven’t gotten the message that they themselves need to save if they want to retire.

          • Tall Talk

            pensions should not be brought back at all. db plans are ponzi schemes and should be illegal

          • FriendlyGoat

            Most ordinary people in private-sector employment now wish that someone cared enough about them to arrange pensions which cannot be outlived. You are implying that pensions hurt the people—-which just isn’t the case.

        • Simpatica

          The elderly are a collection of the greedy. They will take the cloths off the backs of their grandchildren to keep their benefits.

        • lea723
          • seattleoutcast

            Thanks. That’s awesome.

      • LA_Bob

        I think it’s over the top for seattleoutcast to refer to “greedy retirees” — people come to work given certain understandings regarding compensation and benefits. They build their lives on the assumption those present and future benefits will be paid. I believe institutions — governments and businesses, especially large corporations — have encouraged this belief, and blaming people for believing is a bit cruel.

        Still, that belief is the problem, and it doesn’t matter that someone has children and grandchildren or other needs. If the putative payor is unable to meet the implied obligation, well, it ain’t gonna be met, and we needed to stop encouraging this kind of dependency a long time ago.

        It’s nice that FriendlyGoat’s former employer has a fully funded pension to provide to past and present employees. It’s even nicer the firm makes such good profit and cash flow that it can keep funding that pension. I hope Friendly isn’t under the impression that all business in the country are so blessed, especially the smaller ones for which so many people work.

        • FriendlyGoat

          No, I’m not suffering from the delusion that all businesses, especially the smallest ones, can afford pension plans. But I do know that 401K was a legislative accident never intended to induce employers which can afford pension arrangements to abandon them. Net, net, I am more concerned about “broke” individuals than I am about either “broke” companies or “broke” governments.

          There is something wrong with the picture that decades of high-end tax cuts have coincided with stagnating wages, abandoned benefits, diminished job security and most productivity gains accruing to the top one percent. This is not coincidence. It is cause and effect.

          Most people don’t seem to know it and of those who do, most are unable to admit the problem due to their various allegiances and alliances. Warren Buffett, for one, is rich enough and independent enough to at least beat around the bush with respect to what’s gone wrong. He could “use” new tax cuts and yet knows they are not the right prescription. We need more people with the independence and courage to tell that truth.

      • Tall Talk

        many older people are getting too much and hoarding wealth that could help younger family members. the u.s.a. is hostage to baby boomers who voted themselves benefits that are funded by future generations. old ripping off young. end of story.

        • FriendlyGoat

          I always remind “end of story” people on this subject that all the pensioners (Social Security and other pensions) have children and grandchildren who are darn glad that Mom and Dad or Grandma and Grandpa aren’t broke, will be receiving support as long as they live and (as a result) will leave something to that “younger generation” in the immediate family.

  • Kevin

    Remove the immunity from litigation of public officials for misconduct. If politicians or their advisors on Wall Street say the plans are fully funded make them liabl for the difference if it turns out they were wrong.

    • Fat_Man

      Litigation is never the solution to any problem other than lawyer unemployment.

  • Fat_Man

    We can only hope that the dissidents leave a copy of the paper on the TMZ web site.

  • Andrew Allison

    Well, since the actuaries (who, like the rating agencies, will obviously do anything for a price) signed off on the nonsensical rates of return, it’s hardly surprising that they want to cover it up.

  • Frank Natoli

    Why should states switch from “defined benefit” to “defined contribution”? I don’t think the author understands that the taxpayers of any state exist to keep all public “servants” in the manner in which they are accustomed until death. The public “servants” get salaries, benefits and pensions that would bankrupt any private company, the public “servants” kick back tons of cash to re-elect Democrats who will continue the “defined benefit” in perpetuity. It’s a kind of perpetual motion machine until, as Thatcher et al observed, the state runs out of everybody else’s money.

  • Josephbleau

    Pitty the fool that thinks that their government Pension will resolve into an income stream. The Union Bigs must jive til the bitter or the dues tank.

  • Boston_Patriot

    The destruction of individual rights, liberty, freedom and private property always ends in disaster, eventually. Always.

  • oblomov

    Let’s let the Dems take over everything.

    They can own the runaway debt, the public pension time bomb, the coming O-care catastrophe when IPAB is triggered.

    I’ll delete my Facebook account so they can’t find me to force me into the fields to work.

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