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Companies started ending defined benefit plans over a decade ago.
They moved people to defined contribution plans and 401K.
They saw what was happening and they acted.
The chickens are coming home to roost for public employees.
And the PBGC won't be there to help them either.
The federal government moved to a defined (mostly) benefit plan 30 years ago. Some states never even required pension contributions up until recently. NY State keep telling us we are in relatively great shape, meanwhile we have had to fund very significant shortfalls to over 3 years.
The federal government moved to a defined (mostly) benefit plan 30 years ago. Some states never even required pension contributions up until recently. NY State keep telling us we are in relatively great shape, meanwhile we have had to fund very significant shortfalls to over 3 years.
NYS isn't looking too bad with 2011 figures.
Illiniois though...43% funded
Illinois currently has about 7000 governments and all employees are public with pensions. We are talking county, municipal, township, school districts and special district governments. The redundancy is obvious to the most casual observer.
In the 1940's there were almost 16,000 governments within the state, ironically created to avoid big government.
Illinois had the distinction of having its two most recent former governors in prison at the same time. One was Republican ( Ryan) and the other a Democrat ( Blagojevich). I believe Illinois has had more governors in prison than any other state, over time. Party does not seem to matter.
The current governor has withheld the paychecks of state lawmakers because they failed to reach a deal on state pension plans. The lawmakers are now suing the state.
Only in Illinois....
Wasn't it the case that in Illinois county governments and municipalities signed an agreement with the state to turn over pension funding to the state? However, the control of the pension policy stayed in local hands. When the localities didn't have the responsibility of funding their employees pensions, the pensions became more generous through policy changes, leaving the state holding the bag.
I heard this story third hand, so take it with a grain of salt.
Tax reform involving raising taxes on the upper class and wealthy corporations, getting rid of flat/regressive tax rates, and working together as a nation will solve our fiscal problems, not the me-first, screw everyone else mentality of the Republican Party. The right is trying to destroy the lives of public employees in the same manner as they attack the poor. Domestic enemies.
Funny didn't Detroit do that? how did that turn out?
If it is such a great idea how about you lead by example? and you pay out of your own pocket?
Have a fair tax of 5%, let the be the nation tax code, the people of this nation must live within their means, why shouldn't the government?
Working together as a nation will solve this problem or that problem in the end we end up with less money and less freedom, we are no long buying this load of crap.
"me first, screw everyone else mentality" You mean taking care of ones self, not relying on others, helping everyone else and then hoping their is someone around to hopefully help you, and then living in poverty when no one does.
We are not destroy the lives of public employees, we are not the ones who made promise that could never be delivered upon, we are not the ones who constructed this massive Ponzi scheme in exchange for the back of votes for a certain party (the Democrats) Why should all have to pay because a bunch of people feel for a bunch of lies and bad math? why should we have to bail them out? who is greedy now?
Domestic enemies?
We are not the ones flooding this nation with the 3rd worlders and their failed ideologies.
We are not the ones creating massive public union Ponzi scheme.
We are not the ones mandating you buy a product.
We are not the ones force kids to go to failing schools when they could go to a great school of their choice.
We are not the ones try to steal the wealth of Americans under the lie of the public good.
We are not the ones disarming the America people.
but then again you will never confront these facts, you will deflect them and change the subject.
Companies started ending defined benefit plans over a decade ago.
They moved people to defined contribution plans and 401K.
They saw what was happening and they acted.
The chickens are coming home to roost for public employees.
And the PBGC won't be there to help them either.
I have a 401 and a 457 plan with the state and a defined benefit plan as well.
The state stopped matched funding to the 401 several years ago and both of my 401 and 457 plan dropped 41% in 2008-2009. That's about a 4 year set-back in growth. Last year was when it got back to pre-recession levels. I'm just glad I wasn't on the verge of retirement then.
I am shocked at the state's contribution level ( I should say "promise") to my pension, and I wonder if the funding can be sustained.
A lot of public service employees are going to get a rude awakening when they go to retire. These states need to do what Florida did, require employee contributions to the state pension plan.
Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole.
A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement.
The FRS has always been in good shape - even without employee contributions.
The reason they are underfunded is that the people who promised them did not make contributions required over the years that were required to keep those promises. They reneged. They failed in their responsibility as public officials. That is what I meant.
If they were required then they would have had to been made. Face it ;pensions are just another bondholder standing in line. All bondholders were told they would be paid .That is the reality
A lot of public service employees are going to get a rude awakening when they go to retire. These states need to do what Florida did, require employee contributions to the state pension plan.
Across the nation, cities and states are watching Detroit's largest-ever municipal bankruptcy filing with great trepidation. Years of underfunded retirement promises to public sector workers, which helped lay Detroit low, could plunge them into a similar and terrifying financial hole.
A CNBC.com analysis of more than 120 of the nation's largest state and local pension plans finds they face a wide range of burdens as their aging workforces near retirement.
Thanks for posting this.
Whats amusing is some will never see this until it hits their backyard. SW Florida and real estate in many retirement areas is tanking again. SC in some areas looks like a wasteland.
Myopia seems to be a talent of those who sell real estate. The domino effect of economics must seem too complex, or they didnt pass Macroec 101.
Tax reform involving raising taxes on the upper class and wealthy corporations, getting rid of flat/regressive tax rates, and working together as a nation will solve our fiscal problems, not the me-first, screw everyone else mentality of the Republican Party. The right is trying to destroy the lives of public employees in the same manner as they attack the poor. Domestic enemies.
Nope. I live in NJ and we're the textbook example of how giving even more and more money to the political apparatus and their cronies solves absolutely nothing fiscally speaking.
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