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Old 07-01-2017, 11:11 AM
 
4,080 posts, read 4,368,368 times
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It's not about jealousy by & large.....it's about the numbers. These pension benefits that are on the books are not sustainable. Government jobs have far outpaced the private sector in salary & retirement for the last several decades. There is a justifiable resentment by the greater public about this situation, who in most cases, no longer have company pensions, but pay for the pensions of city, state & federal workers.

In the end....reality will win out. There's not enough money to service these accumulated benefits even if we all wanted it to be so. A trim in benefits are coming for some, but most are going to get a haircut.
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Old 07-01-2017, 11:56 AM
 
Location: Madbury, NH
143 posts, read 195,777 times
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I get the numbers very well.....this is not the employees fault. They took a job, agreed to what was offered, then the states didn't fund(actually it was a dot com bust and housing crash/bank bailout that really helped cause the issues at hand), and no readjustment of the funds calculations. But, they paid in too......and it is resentment(jealousy by another name), you stated it. Your saying it is justifiable and I just do not understand how you justify it? I just disagree, but thats ok.....the abuses of taking advantage of what is offered is a different matter in my book though. I am interested in trying to understand your side.....so please do elaborate, as I will elaborate my view.

You are correct that reality will win out, but the reality is they agreed to "x", and "x" probably will not be provided. I do not blame them for making those agreements. It IS about the numbers.....and what they agreed to......and then the state reneging. Yes, they made bad estimates/calculations....but it isn't the fault of those expecting those benefits, and are probably counting on them.....they did give up something in most cases to receive them. Now.....if they get changed with the full knowledge of those going forward.....that is fair.

I am self employed.....pay state income tax that supposedly doesn't have one too.... I pay both halves of my social security, and have no benefits provided if anything should happen to me unless I provide them to myself. Now, do I blame everyone else that has Unemployment or Disability provided for them? Or anyone that has any kind of business provided heath care benefits? Do I get angry about anyone that gets matching funds on their 401K? No....

Anyhow.....yes, there are abuses of the system that can be curtailed. I am just surprised that living in such a state, with such a penchant for "fiscal restraint", can get into such a "hole".

To me, I should go after everyone that has matching 401K's and say.....OH, you shouldnt have received those matching benefits and we the people are going to take back 30% of that matching benefit, or whatever is going to happen.....this is a stretch, but I hope you get what I mean.

Obviously....its all going to be irrelevant if we dont get our country's fiscal house in order. Our reps and senators think we can just keep pushing eternal debt down the road......and I got news, we cannot. It will bite us in the you know what.....but I think most would agree...at least I hope so. We have to come together, and the divide just seems to be getting wider. There is this blame game going on, and it needs to stop.

Last edited by frozintime; 07-01-2017 at 12:07 PM.. Reason: made grammatical error
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Old 07-01-2017, 12:19 PM
 
4,080 posts, read 4,368,368 times
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It's really not about my side. I'm looking at the numbers & they don't add up. The state of Illinois is in fiscal collapse mainly because they cannot service their public sector debt. We are past the point of blame, or who said what or did what, it's not about who's fault it is....it's about how this mess is going to be fixed.

The only fix is that future benefits are going to be reduced. If they are not reduced, the system will collapse & there will be nothing left.

The personal feelings about this issue by the public really no longer matter.....this issue has moved far past that.
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Old 07-01-2017, 12:38 PM
 
Location: New Hampshire
448 posts, read 292,104 times
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Yeah, it doesn't matter who agreed to what, or who thought they were getting what. It's called bankruptcy, and it happens to individuals and governments all throughout human history.
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Old 07-01-2017, 01:46 PM
 
2,382 posts, read 6,079,273 times
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Ct in same boat,bloated pensions and losing population and businesses.
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Old 07-01-2017, 04:05 PM
miu
 
Location: MA/NH
16,469 posts, read 33,425,465 times
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Maybe there could be a compromise of them accepting a percentage of their pensions in exchange for a heavy discount on their NH property taxes? Or deed them some amount of NH government owned acreage? If NH can't give them cash, then give them some other NH assets instead.
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Old 07-02-2017, 02:36 PM
 
3,791 posts, read 1,725,854 times
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Quote:
It better not be through property taxes...
People with land in current use are laughing at those who subsidize their tax bills ... that's you and me. Taxes are only going to go up.
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Old 07-02-2017, 03:53 PM
 
996 posts, read 838,971 times
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Governments should be required by law to keep public pensions 100% funded at all times. That would require them to raise taxes immediately if they increase pension benefits, and voters will be immediately aware of what their elected representatives are agreeing to (and can vote them out if they disagree).

Unfortunately, the way it works now, is elected officials agree to spending decades in the future (which gets them re-elected now), secure in the knowledge they'll be long gone before the bills arrive. The people who happen to be around at the time get stuck with the bill and a reduced standard of living. And the people who worked their whole lives believing they knew what their retirement income was going to be, and making decisions all along based on that assumption, are facing the prospect of getting less than they thought.

I don't know what the short term resolution to the pension under funding will be. But to prevent this from happening again, there needs to be a requirement that public pensions are kept fully funded, or we'll do to future generations what the past generation did to us.
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Old 07-02-2017, 05:05 PM
 
2,660 posts, read 1,273,805 times
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Quote:
Originally Posted by jdhpa View Post
Governments should be required by law to keep public pensions 100% funded at all times. That would require them to raise taxes immediately if they increase pension benefits, and voters will be immediately aware of what their elected representatives are agreeing to (and can vote them out if they disagree).
You have it wrong. There are certainly lots of bad decisions around govt. retirement benefits, but much of the problem is our current low interest rate environment. There is a mathematical formula that's used to determine how much money now to pay off a future obligation, the discount rate, similar to the APR in a mortgage, but it works in reverse. In a mortgage, higher APR means higher payments. In retirement accounts, higher discount rate means lower payments now.

So a state can go from fully funded to billions behind when interest rates are low.

One of Detroit's screw ups was thinking that the good times in the dot com bubble would last forever. They raised benefits and even had special payouts. Of course the good times didn't last.
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Old 07-02-2017, 06:41 PM
 
996 posts, read 838,971 times
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Quote:
Originally Posted by bigbear99 View Post
You have it wrong. There are certainly lots of bad decisions around govt. retirement benefits, but much of the problem is our current low interest rate environment. There is a mathematical formula that's used to determine how much money now to pay off a future obligation, the discount rate, similar to the APR in a mortgage, but it works in reverse. In a mortgage, higher APR means higher payments. In retirement accounts, higher discount rate means lower payments now.

So a state can go from fully funded to billions behind when interest rates are low.

One of Detroit's screw ups was thinking that the good times in the dot com bubble would last forever. They raised benefits and even had special payouts. Of course the good times didn't last.
That is how it is set up today, and it doesn't work very well, which is why the unfunded pension problem is so large (pretty much all states). Rates of return are assumed, but they're not guaranteed, and as it is turning out the actual rates of return are less than forecast.

Instead of setting aside a smaller amount than the liability and hoping future investment growth will cover the rest, require that current assets >= liabilities. I.e., pay for the liability up front. Then, any growth in asset value can be used to decrease future state contributions to the investment fund. If investments do well future state funding goes down a lot, if investments do less well future state funding goes down less.

The current system is not good. We now have a choice between making people pay higher taxes to cover services they never received, or reducing promised pension benefits that people are relying on. That's a no win situation, we should try to do better so it doesn't happen in the future.
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