[JayCT]

Originally Posted by BobNJ1960

There is no long-term risk to the state as an employer. It is a defined contribution plan, not a defined income stream plan, for the employer.

The employee draws from it from value it has, but no more, at retirement.

The employer would not have a problem with pension funding if they properly funded it in the first place. But greedy corporate executives and weak political leaders did not do that and after decades of game playing, it caught up to them. Jay

[BobNJ1960]

Originally Posted by JayCT

The employer would not have a problem with pension funding if they properly funded it in the first place. But greedy corporate executives and weak political leaders did not do that and after decades of game playing, it caught up to them. Jay

Not totally true, JayCT. Live expectancy played a big role, as its improvement exceeded reasonable expectations of a few decades ago, and pension requirements and life expectancy projections go hand in hand.

Current employees are costly enough that no corp nor gov't should be incurring expenses for prior employees concurrently.

401ks are great for both employer an employee. Each can and should plan, and the corp knows precisely what its expense for 401k matches will be.

That allows US corps to compete in the global marketplace.

[NUHuskies01]

Originally Posted by BobNJ1960

Not totally true, JayCT. Each can and should plan, and the corp knows precisely what its expense for 401k matches will be.

That allows US corps to compete in the global marketplace.

Companies compete because they have products or services that are wanted in a global or local marketplace. Not because they have 401k over pension plans.

[East of the River]

Originally Posted by BobNJ1960

Ct let state unions crush them, just like Il and NJ.

Had we substituted 401ks for gov't staff instead of pensions, and private sector employee share of Health Care vs the state emps golden plans, we would have lower taxes, more growth, and fiscal solvency.

Oddly enough from the data I can dig up on CT"s current pension plan we would be #6 for highest annual payout per year for our pensions. But if you adjust for percentage of wage. As in how large a percentage of your salary will your pension will be were in the bottom half. Some states with higher payout percentages then us.
Alabama
Arizona
Arkansas
California
Idaho
Kentucky
Montana
Nevada
North Carolina
North Dakota
Oklahoma
Oregon
Pennsylvania
South Dakota
Tennesse
Texas
Utah
West Virginia
Wisconsin

This seems to be based on 2014 data thou and given pay freezes with our state since then we may actual look a bit better as a dollar amount as well.

[GeoffD]

Originally Posted by BobNJ1960

Ct let state unions crush them, just like Il and NJ.

Had we substituted 401ks for gov't staff instead of pensions, and private sector employee share of Health Care vs the state emps golden plans, we would have lower taxes, more growth, and fiscal solvency.

Like I said, look at the actual budget instead of just repeating the rhetoric. Medicaid and Education bailing out the poor school districts are the big ticket items. You could default on all the pensions & lay off all the state workers and you'd still have an enormous budget. The majority of the money goes to propping up poor people in one way or another. It's the same math in Massachusetts, Rhode Island, New York, New Jersey, Delaware, ..... If you want to cut taxes, you adopt Mississippi public policy for the safety net. That's where all the money goes.

[BPt111]

Originally Posted by GeoffD

Like I said, look at the actual budget instead of just repeating the rhetoric. Medicaid and Education bailing out the poor school districts are the big ticket items. You could default on all the pensions & lay off all the state workers and you'd still have an enormous budget. The majority of the money goes to propping up poor people in one way or another. It's the same math in Massachusetts, Rhode Island, New York, New Jersey, Delaware, ..... If you want to cut taxes, you adopt Mississippi public policy for the safety net. That's where all the money goes.

Should Connecticut adopt Nebraska pension plans it is among best in the states

https://www.omaha.com/opinion/editor...b51219d70.html

Is Nebraska's Cash Balance Pension a Model? | The Pew Charitable Trusts

[Lincolnian]

Originally Posted by BobNJ1960

There is no long-term risk to the state as an employer. It is a defined contribution plan, not a defined income stream plan, for the employer.

The employee draws from it from value it has, but no more, at retirement.

It's a macro issue. If everyone were in the 401k there would be too much money chasing a small universe of investment options. You can throw all the money you want at a good company but that does not mean they can proportionately expand the company. Demand is not inelastic and we have seen that many companies start to pursue risky investments outside their core expertise often to the detriment of the company. Connecticut's risk is that the retiree's 401k return does not provide an adequate cash flow to support themselves resulting in a downgrading of spending and an increase in the need for support services. Another unintended consequence is accelerating the exodus of residents.

Some will say that this is good because it will bring down the cost of living in Connecticut but in order for that to happen homeowners will have to take the brunt of the pain. Since many are still in a negative equity position, and sales of homes are not robust to begin with, downward standards of living for retirees will continue to pressure our economic recovery.

I remember when the 401k was introduced to employees in the early 80s at a major corporation I was working at. Fidelity was managing the program and said clearly that 401k are not sufficient nor designed to be retirement plans. They are supplemental plans working with your primary source of income in retirement, a pension and Social Security. This message was repeated until the 1990s when some major companies started to jump ship on their pension plans to appease Wall Street. However, many leading economists and investment analysts are now starting to raise concern about the massive inflows over the past decade into 401k plans resulting in passive automatic purchases of the same group of stocks.

Micro issues of individual corporations and organizations can have a short-term comparative advantage but in the long run macro economic issues need to be addressed or it has systemic impact that adversely affects the entire economy (aka financial crisis).

[beerbeer]

Originally Posted by Lincolnian

If everyone were in the 401k there would be too much money chasing a small universe of investment options.

What?!?!

[beerbeer]

This is a good idea. Should have been done 50 years ago.


Connecticut Maps Out Five-Year Plan For Ports, Economic Development - Hartford Courant

[cttransplant85]

CTs economy continues to be dragged along by Fairfield county and the national economy. If things go south nationally CT is in big big trouble.