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If the PBGC runs out of money, the taxpayer will be hung for the bill. In the case of the mineworkers, they can go after Peabody Coal and other operators, who shed the fiscal responsibility by spinning off and selling corporations with all the debt. Thanks to the supreme court Citizen United decision, the corporate shell is no longer absolute, so the feds can go after the personal fortunes of the people who pulled the tricky bookkeeping. The next couple decades should be interesting in the history of wealth redistribution.
Many of us will not live to see the fallout, but it's interesting to speculate.
This post needs to be moved to the "Economics" forum. That is the place for one gloom and doom prediction after another. Mathjak's list does not even come close to covering all the gloom and doom scenarios. The theories abound: too much debt, stock prices about to drop to zero, high unemployment (because the government fakes the data), all sorts of conspiracy theories, a looming dementia care crisis, poor old people dragging down society, poor young people dragging down society, oligarchs and rich people stealing all the money, robots taking all the jobs, GMOs poisoning all of us, low interest rates, bubbles everywhere......
A few pension funds falling short pales by comparison.
There's never a shortage of things to worry about in life.
You know, maybe fretting about money, pensions, and your financial future is a good thing. Because if your primary concerns are those issues, that means you're not worried about your health. And if that's the case, take a second and count yourself fortunate.
Let's not be so quick to let the bankers and Wall Street off the hook. Pension funds have financial advisers that make predictions about rates of return based on market projections. While they may not be 100% accurate they should be relatively close. Assuming the market behaves normally (including ups and downs).
When you have the serious and criminal market manipulations practiced by banks and Wall Street over the past decade, both private investors (the little guys) and pension funds suffer greatly. The deficits experienced by many pension funds today are a direct result of the sub prime mortgage debacle of 2008.
Yes, many municipalities were unable to meet pension obligations due to poor returns.
It seems obvious to any honest person that the banks and Wall Street should be responsible for these deficits since tax dollars bailed their crooked butts out and they engaged in criminal activity.
Instead of holding the crooks responsible the decision is to punish the workers who never did anything wrong and made their required contributions.
Is that what they mean by making America great again?
The state pensions will go to the taxpayers to make up the difference when they lower their investment assumptions. The trigger could be the aftermath of the next recession when the Fed is too slow to climb out of negative deposit rates. I don't believe they've ever asked their members to pay more. It's always the taxpayer. The crisis won't cause the next recession. The next recession may cause further deterioration in pension funds and states' finances.
The state pensions will go to the taxpayers to make up the difference when they lower their investment assumptions. The trigger could be the aftermath of the next recession when the Fed is too slow to climb out of negative deposit rates. I don't believe they've ever asked their members to pay more. It's always the taxpayer. The crisis won't cause the next recession. The next recession may cause further deterioration in pension funds and states' finances.
Completely false. When I initially enrolled in the pension the formula was 3.2% or so from the employee (depending on age at enrollment) and 6.8% from the employer. At that ratio our pension was considered over 105% funded.
It went to 5% for the employee to 5.5% and is now at 7.5%. The employer portion is now less than 3%. The issue is the employer needs to make up 22+ years of missed payments plus the investment returns on those contributions.
And some companies are already scrambling to get out of their pension obligations. A family member worked for Alcatel Lucent and retired. He was recently advised by mail that his former employer could no longer guarantee that they could send a monthly pension check on a regular basis. There was a lump sump offer and he took it.
I took a lump sum pension years ago when I retired early. No problems to date. Many of my coworkers decided to stay on and work at least until 65 or older to build up their benefits. It turned out that when many of these folks got close to 65 they were laid off and forced back into the job market into competition with much younger job seekers.
Completely false. When I initially enrolled in the pension the formula was 3.2% or so from the employee (depending on age at enrollment) and 6.8% from the employer. At that ratio our pension was considered over 105% funded.
It went to 5% for the employee to 5.5% and is now at 7.5%. The employer portion is now less than 3%. The issue is the employer needs to make up 22+ years of missed payments plus the investment returns on those contributions.
I said a state pension fund. I'm aware of the cases where Virginia and Texas recently upped the contribution from the government in lieu of having the employee contribute more.
In California, they're talking about overturning prop 13 or raising other taxes to make up for the pension fund problems.
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