Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
That should be the case. Pensioners are not the same as bond holders. Not even close. One is a deferred salary, the other was an investment with a known risk. While I can understand allowing pension cuts in extreme cases, it should only be after creditors get nothing.
Far less discussed is the fact that the City of Eureka is currently seeking to sell some $8.2 million in bonds next year in order to fund its pension obligation to employees. Such bonds are not being put to a vote of the city’s residents, as state law requires of most municipal bond issues. Instead, the city is seeking a court decision that would validate its legal position: Since pension contributions are also required by law, the City Council may issue such bonds without the customary 2/3 vote of the citizenry.
That should be the case. Pensioners are not the same as bond holders. Not even close. One is a deferred salary, the other was an investment with a known risk. While I can understand allowing pension cuts in extreme cases, it should only be after creditors get nothing.
That's stock, not bonds.
In bankruptcy bondholders get preference.
Bondholders loaned their money to the municipality to be paid back with interest.
And if the bonds were insured there should be no risk.
Still work to be done there but progress has been made. Nearby Wisconsin with Republican Governor Scott Walker you ask?
Fully funded and oh yeah this is cute!
Not the only state that has wanted to tap their employees state pension fund to help fund government beyond their normal bond purchases. Maryland has wanted to do the same
yep state and certainly federal pension are subject to change by legislation. But then according to testimony I the State of the States hearings last year to congress most are not in trouble. In fact pension are in less trouble even than healthcare liabilities going forward. Some of most well funded as far as state controlled are Municipal Retirement State Systems governed by state laws. State legislatures tend not to allow them to be so under funded. It identified Illinois as the state pension in worse shape noting that it has not paid into pension in last two years and had actually sold bonds to cover state revenue shortfall rather than projects.
A big problem, is that pensions were established back when Detroit had twice the population today. Pensions are kind of a Ponzzi Scheme as they rely on people paying into the pension plan, and other taxes as needed. Also a lot of major manufacturing plants left the city, and other types of business left the city. The need for city employees paying into the system declined as they laid off city employees.
Pensions were designed, to have so much income available. Interest on the pension investments are way down. As people left, and companies, left, and as other businesses left, and they laid off city employees, the number of people paying into the system declined so drastically there is no money to pay the pensions. Tax revenue is way down.
A big problem, is that pensions were established back when Detroit had twice the population today. Pensions are kind of a Ponzzi Scheme as they rely on people paying into the pension plan, and other taxes as needed. Also a lot of major manufacturing plants left the city, and other types of business left the city. The need for city employees paying into the system declined as they laid off city employees.
Pensions were designed, to have so much income available. Interest on the pension investments are way down. As people left, and companies, left, and as other businesses left, and they laid off city employees, the number of people paying into the system declined so drastically there is no money to pay the pensions. Tax revenue is way down.
Interest on pensions are back up over average as investment returns are running well above average. The unknown for pensions is the same as for all of us. What will returns look like over the next 30 year period. That is the crux of most of the issues, not all but most funds especially at the state level. Most funds have assumptions of about 8 percent built in.
I wonder how many have considered that the push to defined contribution pensions from defined benefit pensions is!
A precursor to making SS a defined contribution plan instead of a defined benefit. Wait isn't that called Privatization being pushed by many of the same people?
I wonder how many have considered that the push to defined contribution pensions from defined benefit pensions is!
A precursor to making SS a defined contribution plan instead of a defined benefit. Wait isn't that called Privatization being pushed by many of the same people?
Be careful what you wish for as you may get it!
I think it's more likely that social security benefits will continue but with a reduction.
This entire situation with Detroit is HUGE. Yesterday, the Detroit Free Press had an editorial stating that the taxpayers of the state should fund Detroit's pension because of the alleged protections conferred on government pensions. Are the state taxpayers going to agree with that? (Does the term "moral hazard" sound familiar?) If not, can the state amend its constitution and eliminate the "protection" afforded state employee pensions? And if there is an amendment, will it apply to all pensions, both current and future? I don't have the answer to the latter, but I can see where this is all going and it's not pretty.
Which brings us to California. Do the California taxpayers have the wherewithal to bail out not only the state pension funds but the "bankrupt" cities, as well? And would they be willing to do so? What a mess.
Can pensioners who spiked their pension pre-retirement be ordered to pay back the government entity, with interest? I read yesterday that New York state has announced they intend to audit every government pension in the state - and look for incidences of spiked pensions in addition to examining each entity's pension solvency.
And then of course, I've looked at not only Maryland but Baltimore County (my county of residence), as well. Baltimore County recently issued Pension Obligation Bonds to the tune of $250 million. Hopefully I won't be around if the s*** later hits the fan.
I think it's more likely that social security benefits will continue but with a reduction.
This entire situation with Detroit is HUGE. Yesterday, the Detroit Free Press had an editorial stating that the taxpayers of the state should fund Detroit's pension because of the alleged protections conferred on government pensions. Are the state taxpayers going to agree with that? (Does the term "moral hazard" sound familiar?) If not, can the state amend its constitution and eliminate the "protection" afforded state employee pensions? And if there is an amendment, will it apply to all pensions, both current and future? I don't have the answer to the latter, but I can see where this is all going and it's not pretty.
Which brings us to California. Do the California taxpayers have the wherewithal to bail out not only the state pension funds but the "bankrupt" cities, as well? And would they be willing to do so? What a mess.
Can pensioners who spiked their pension pre-retirement be ordered to pay back the government entity, with interest? I read yesterday that New York state has announced they intend to audit every government pension in the state - and look for incidences of spiked pensions in addition to examining each entity's pension solvency.
And then of course, I've looked at not only Maryland but Baltimore County (my county of residence), as well. Baltimore County recently issued Pension Obligation Bonds to the tune of $250 million. Hopefully I won't be around if the s*** later hits the fan.
Most others wont follow this. You are aware of the local pension issues in Calif with some cities being unable to make their pension contribution share to the state and saying they can't afford to pay the penalty if they pull out. The move by Maryland to require the local governments ( counties and B town) to contribute to the pension is a possible problem. To have them start borrowing to make the contribution is to create issues down the road. The wealth in parts of the state can only be taxed so much. Ghostly this is in large part why I think trying to incorporate Detroit with the county would be a disaster.
A regional approach to pension resolution seems to be the most logical approach, assuming they have done something about ensuring that future defined payment pension benefits are in line with something that is supportable.
A regional approach to pension resolution seems to be the most logical approach, assuming they have done something about ensuring that future defined payment pension benefits are in line with something that is supportable.
That's the problem, what is supportable by the counties isn't by the city so tax revenues are already heavily redistributed. Regionalize it and folks along with jobs will just move farther from city center and out of the current region it is a long time discussion here there and everywhere. Should the political decision making be made by the folks paying the bills? Maryland has a secessionist movement and has recently had one Republican governor.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
