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This makes sense. What is the other alternative? City govts. cannot make pension promises that they can't keep and then expect others from outside the city to cover their lies/foolishness/deceit/greed. Lots of others in the private sector have lost their pensions. Why should govt. employees be exempt.
Many lost pensions as companies went bankrupt and out of business and ceased to operate and provide that service anymore. So will city bankruptcies result in the inability to attract workers and the cities shutting down and folding? Who will provide the services at lower salaries and benefits than competing neighbors?
I hope people take note of the fact that his ruling applies to municipal, public-sector pensions only. It does not apply to state or federal plans as neither can file bankruptcy. Counties may be a whole other can of worms.
Too many in various threads are predicting the demise of public sector pensions altogether and jumping up and down with glee at the prospect. Pension envy is really ugly and getting worse. They're clearly oblivious to or simply ignore the fact that there are limits to what various courts can change.
Also one entities funding problems aren't everyone's. Many conservative states pride themselves on how well funded their pension funds are.
This makes sense. What is the other alternative? City govts. cannot make pension promises that they can't keep and then expect others from outside the city to cover their lies/foolishness/deceit/greed. Lots of others in the private sector have lost their pensions. Why should govt. employees be exempt.
Well, the pension is payment for work that the employees already did years ago. They agreed to take pension benefits in lieu of higher salaries or other benefits, so the city is now trying to take away the pay they already agreed to. If they want to do that, how about just giving them in cash right now the salary they agreed not to demand because they were getting a pension?
With 150 BILLION dollars in unfunded pensions something's gotta give.
No it doesn't as there are trust funds with investments to earn the money needed. What is important is how well funded each individual pension fund is as they are independent of each other. It is up to each of us to know our individual locales funding level and adjust are thinking accordingly. Yours is not mine and mine is not yours. So obviously our views will vary.
While I appreciate the logic of the article/ruling, I wonder if pensions should be lumped into the same category as other goods and services, when it comes to public bankruptcy. IMO, the problems of underfunded pensions are far too often the result of corruption, greed and malfeasance (at both the municipal and federal level; of course, the Feds can simply print more money to cover its deficits!).
Workers who invest a significant part of their adult lives working towards pensions, 'should NOT simply have to 'shoulder the risk' that someone down the road may essentially 'steal their money'. This is why pension funds all the way from the local/municipal to the Social Security level should be held in untouchable escrow accounts.
Of course, now that the situations are upon us, it is almost impossible to 'get the worms back in the can.' Unfortunately there no longer seems to be a 'public trust' or sense of integrity and doing what is right ... at any level of society. (BTW, I do not personally have a pension and do believe that many of the public sector pensions are far to liberal, due to the lack of a profit motive).
Both private and public sector pensions should be as inviolate as public sector pensions 'after the fact'. The time to deal with under/unfunded pension issues is no less than 20-years before one is eligible to retire on a pension.
Lenora I read the article and under current rules the pension is at 91% of funding. You can not go back and question how they arrived at the funding. If that was the case do States like NJ have to go back and make up 23 years of missed contributions prior to claiming that the pensions there are underfunded?
While I appreciate the logic of the article/ruling, I wonder if pensions should be lumped into the same category as other goods and services, when it comes to public bankruptcy. IMO, the problems of underfunded pensions are far too often the result of corruption, greed and malfeasance (at both the municipal and federal level; of course, the Feds can simply print more money to cover its deficits!).
Workers who invest a significant part of their adult lives working towards pensions, 'should NOT simply have to 'shoulder the risk' that someone down the road may essentially 'steal their money'. This is why pension funds all the way from the local/municipal to the Social Security level should be held in untouchable escrow accounts.
Of course, now that the situations are upon us, it is almost impossible to 'get the worms back in the can.' Unfortunately there no longer seems to be a 'public trust' or sense of integrity and doing what is right ... at any level of society. (BTW, I do not personally have a pension and do believe that many of the public sector pensions are far to liberal, due to the lack of a profit motive).
Both private and public sector pensions should be as inviolate as public sector pensions 'after the fact'. The time to deal with under/unfunded pension issues is no less than 20-years before one is eligible to retire on a pension.
You do realize that pension are invested in risk investments. its not just Detroit who are bondholders this case and in same boat ;other pension funds have investment in their bonds.It depends on the structure of the fund in now invested. often public funds investments are controlled by state law. If held in escrow as cash the they would be make no interest on deposits. The main difference in most pension from 410ks is that its invested as a group to individually and has directors who manage the fund. Ours being non-profit; all interest goes to accounts and anything over guaranteed amount in interest means extra check for retirees at end of year. State laws are much stricter than federal laws on public pensions as far as funding.
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