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Same old stuff giving Unions a bad name.
This just broke today.
Although I dont agree with your tactics. I fully support your cause because its the only checks and balances we got left and I actually think you guys do a pretty good job.
You guys gotta flatten it out though.Teachers too.
No qualified man or woman is worth 3 times another and the golden parachutes gotta stop.
The argument is exhausting but not going away as long as this stupidity continues.
Sorry, but there's no "guaranteed rate of return of 8%" to the patrons of the NYS retirement system. The 8% (and now 7.5%) is a target return used by NY and virtually every other state in the country as one piece of the process to determine pension funding requirements. (And over several decades, it has been a fairly accurate assumption of investment returns.) In addition to investment returns, other factors include: member contributions; number of active members in the system; number of retirees in the system; retiree longevity, etc. The target rate of return has varied throughout the years as economic conditions dictate.
I think we've discussed this in another thread. For all intents and purposes the target rate is guaranteed. When someone says "if you don't receive this return, then the taxpayers will make up the difference" that is a guarantee. I do agree with your earlier posts, that the municipalities have gotten off easy because in good years the fund over-performs and their monetary responsibility is diminished.
The target rate of return fluctuates very little, or it would have been -2%, because that was the return of the S&P over the past decade. The idea that the citizens of NYS should dig deeper into their pockets to fund the ridiculous "target" rate of return while their own retirements aren't performing anywhere close to that level illustrates how detached the public employment system is from reality.
Wow, I wrote the OP and walked away to come back to this discussion. After reading all the comments, my opinion is that Cuomo will not follow Walker’s lead, although my Tea Party friend thinks he will (I don’t know why). I find it interesting that my TP friend fell in love with Cuomo – strange.
Anyhow, Walker is all about busting the unions. The evidence is in the prank phone call from his (imposter) puppet master Koch brother. And if that isn’t enough, the fact that they added NO BID contracts to sell off their aged energy facility speaks volumes. Yes, selling them off has been the talk for years (from both parties), but why no bid? A state in fiscal need would want to get the most for these assets, right?
One poster hit the nail on the head regarding this political chess game. If we had campaign reform, the GOP wouldn’t be beholden to large corporations and billionaires, and the Dems wouldn’t be beholden to the unions. The non-unionized middle class are the ones suffering with their layoffs and pay freezes. We are being pitted against them due to our own poor conditions. It’s a sad state to be in, especially when the REAL reason for our economic state is due to deregulation and greed from Wall St. They blew it and the unions are the scapegoats. Yes, here on LI, the teachers have it made and something needs to be done.
While the past few years have a rate of return of less than 8%, there were many years in the recent past when the return was more than 20% -- and the target figure was still 8%. According to an August, 2010 Bloomberg report while the last 10 years may have only brought a 3% annual return, the last 20 year return exceeded 8% annually. In fact, the median annual return for state plans in the 25 years ending with 2009 was 9.25 percent, according to the National Association of State Retirement Administrators. Those assumption numbers do fluctuate according to market conditions. The rate was as high as 8.75 percent in 1989 through 1997, and was as low as 4.87 percent in the years before 1975.
The shortfalls in the system have more to do with the State not requiring municipal contributions during the good years than they do with a target rate of return. Had they required the payments, there wouldn't be the need to bill municipalities such large sums this year and next.
Going back to the 1980's to 90's you could have invested in CD for close to 10% and they 1990-2000 was one of the largest run ups in the stock market, the last 10 years were below par.
I agree that they should have increased donations but they also should have made adjutments along the way if they were investing more heavily in the stock market. I don't understand why they stopped donations for those with over 10 years of emplyment, is too much money in the pension fund a bad thing?
Even the current model of 7.5% is to low, where can you get that rate of return and if the return is less municipalities will be asked to cover the shortfall.
I think we've discussed this in another thread. For all intents and purposes the target rate is guaranteed. When someone says "if you don't receive this return, then the taxpayers will make up the difference" that is a guarantee.
Oh, like how banks who engaged in predatory lending on the theory that a certain percentage of loans and credit lines would go "bad" then get to write off the bad debt and get a tax break for it?
You hit upon something that made me think - union bosses and campaign donations. If we had some real campaign reform, this part of the problem would go away. To me, there is no reason Goldman Sachs, the UAW or any group needs to be able to contribute to campaigns. Remove the big money and PACs and now you have elected officals looking out for the public well being across the table from the unions, not 2 teams that are both on the same side.
Tell that to the Supreme Court, which ruled that corporations are "individuals" in terms of campaign finance. Which is b.s., and just further advancement of the plutocracy, but there it is.
Oh, like how banks who engaged in predatory lending on the theory that a certain percentage of loans and credit lines would go "bad" then get to write off the bad debt and get a tax break for it?
Nice hypocrisy.
What's insane is that it was actually worse then that during the run-up... On top of everything, they could hedge that the loans would go bad through swaps - making more money that way. In essence, prop trades covering the defaults they knew would happen because the quality of the debt was so poor.
It's mind boggling that these top tier investment banks have trading records that are near perfect year after year through the crisis. I mean seriously, how obvious can you be? It's not a "market" when there's nobody to take the other side of the transaction and lose (except the little guy and the tax payers). They're covered in so many directions, including the ultimate TBTF bailout option when all else fails.
Forget just criminal - it's really insulting on so many levels that they're allowed to get away with it.
Oh, like how banks who engaged in predatory lending on the theory that a certain percentage of loans and credit lines would go "bad" then get to write off the bad debt and get a tax break for it?
Nice hypocrisy.
Yep, that sounds a lot worse if you don't understand that all businesses calculate a defective rate for all their products. It's something better understood with an MBA, but suffice to say that everyone from Coco Puffs to Bank of America understands that a certain rate of their products fail, and they calculate this risk into their business model. Little off topic, but figured I'd add it in here.
The rest of your post is worthless because it's myopic. "I went to Germany for a week so I know." Yeah, okay.
So, you read a newspaper article on their weather and you would know better?
Stop the presses, she read an article about German weather. I guess that makes you a specialist on German business and meteorology. At this rate we're not going to need newspapers anymore, we can just ask you about everything.
Arguments with ignorant people, it's my biggest weakness.
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