Chicago Fed Thinks It Knows How To Tax Illinoisans Fleeing Pension Liabilities (Union: contractors, salary)

[Bitey]

Originally Posted by Maintainschaos

Many of these you can find directly from the BGA analysis.

Where?

[Liledgy]

Originally Posted by MSchemist80

At least they are paying it. Also the percentage doesn't matter. They pension funds are guarantying COL increases and an unrealistic rates of return not to mention all the hi-jinks involved in calculating the salary basis. I was manager for 1 day before I retired therefore my pension is based on my manager's salary.

Everything I ever read said it was based on the last 4 years salary, not one day. On top of that anybody hired in the he last 8 years or so is averaged over there final 8 years of salary not 4. No “hijinked involved, but keep spewing lies just like your republican leader. Sounds like your retirement is to generous.

[MSchemist80]

https://www.washingtontimes.com/news...eing-illinois/

It seems that over the last 30 years, state pension benefits have increased at a compound rate of 8.8 percent, “six times more than total state revenue growth, eight times more than median household income growth and ten times more than inflation.” Only New Jersey’s public employee unions extracted more from their state’s politicians and New Jersey, like Illinois, is an economic basket case. A few years ago, a footnote in the Illinois state budget explained that ultimately the federal government would cover the shortfall, but that hope has vanished and no one seems to know what to do.

Had state politicians and union leaders held the rate of growth over the last few years to 5.4 percent, the system would be fully funded, Illinois would be fiscally sound and people wouldn’t be fleeing, but that would have required Illinois politicians and union leaders to have both common sense and an understanding that, as the University of Chicago’s Nobel prize-winning economist Milton Friedman once pointed out, “There ain’t no such thing as a free lunch.”

[dtcbnd03]

Originally Posted by Liledgy

It’s not a solution if they don’t fund it, just like a pension, social security, etc.

It is a solution because it eliminates the crushing debt that will not be paid back and will eliminate sky high taxes due to the ponzi scheme effect. Using Illinois as a hypothetical, if a 401k doesn't get funded the public workers will only have $300 for retirement. They'll look at their 401k balance and get angry sooner and demand funding from politicians earlier in the process. If not...too bad they're outta luck and taxpayers aren't on the hook.

If a pension doesn't get funded...the public workers will likely still get the same $300 but they believe they'll get $1,000 because Madigan and the democrats lied to them with promises for decades. They'll check their pension balance statements from Bernie Madoff...I mean Mike Madigan...and see $1,000 but in reality there's only $300 backing it up. Due to that ponzi scheme lie, the democrats will then try to fleece taxpayers for the $700 difference. Taxpayers are now on the hook for balloon payments trying to catch up, junk debt ratings, high taxes, people fleeing the state etc. Whereas with a 401k what you see is what you get...see the difference?

[Mathguy]

Originally Posted by Liledgy

If the unions are so strong, why can’t that get the deal that “right to work indiana” gives its state employees? They don’t even contribute to their pension, plus the state contributes to social security. Maybe it’s not a union thing!

What you are missing is *timing*.

What is crushing Illinois isn't today, it's 40+ years ago when they promised massive pensions and healthcare benefits in retirement in order to reward their loyalists.

You don't have to accrue a liability for public pensions so it didn't show up in the budget.

So now here we are and I have at least 3 relatives drawing from the teachers pension. (there are other public pensions just as bad) So I fully understand the issue. I'm not anti-union but in this case, I think there is strong cause to understand that <public unions> + <government control> + <rich pensions with no accountancy impact> = <disaster decades later>

Basically, there is no "fix" other than reduced services and higher taxes.

I'm not trying to be mean. IL is where I grew up, most of my family lives there and several are either current pensioners or projected ones from the IL government.

It's a GIANT poo-sandwich and I'll stay far away from it as the government tries to now force current residents to pay for past promises.

[Bitey]

Originally Posted by Mathguy

What you are missing is *timing*.

What is crushing Illinois isn't today, it's 40+ years ago when they promised massive pensions and healthcare benefits in retirement in order to reward their loyalists.

You don't have to accrue a liability for public pensions so it didn't show up in the budget.

So now here we are and I have at least 3 relatives drawing from the teachers pension. (there are other public pensions just as bad) So I fully understand the issue. I'm not anti-union but in this case, I think there is strong cause to understand that <public unions> + <government control> + <rich pensions with no accountancy impact> = <disaster decades later>

Basically, there is no "fix" other than reduced services and higher taxes.

I'm not trying to be mean. IL is where I grew up, most of my family lives there and several are either current pensioners or projected ones from the IL government.

It's a GIANT poo-sandwich and I'll stay far away from it as the government tries to now force current residents to pay for past promises.

Same here, I have an immediate relative who is retired with a TRS pension. If he reaches his life expectancy he'll end up collecting more from his pension than he earned during his entire teaching tenure -- and that's in real, inflation-adjusted figures thanks to the automatic COL adjustments.

And he had the nerve to pack up and leave because his taxes were too high. "Gee, how come my property taxes are 9 grand on a 3 bedroom single-story house?"

[dtcbnd03]

Originally Posted by Bitey

Same here, I have an immediate relative who is retired with a TRS pension. If he reaches his life expectancy he'll end up collecting more from his pension than he earned during his entire teaching tenure -- and that's in real, inflation-adjusted figures thanks to the automatic COL adjustments.

And he had the nerve to pack up and leave because his taxes were too high. "Gee, how come my property taxes are 9 grand on a 3 bedroom single-story house?"

You'll have the last laugh cause your relative will not be collecting that entire pension. Will likely only collect 50-60% of promised benefit once we start taxing public pensions, pass amendment, or declare bankruptcy...which we'll reach when we literally don't have the cash to pay. Luckily other states will run outta pension money first so we can follow their lead on how to fix the mess.

[Liledgy]

Originally Posted by dtcbnd03

It is a solution because it eliminates the crushing debt that will not be paid back and will eliminate sky high taxes due to the ponzi scheme effect. Using Illinois as a hypothetical, if a 401k doesn't get funded the public workers will only have $300 for retirement. They'll look at their 401k balance and get angry sooner and demand funding from politicians earlier in the process. If not...too bad they're outta luck and taxpayers aren't on the hook.

If a pension doesn't get funded...the public workers will likely still get the same $300 but they believe they'll get $1,000 because Madigan and the democrats lied to them with promises for decades. They'll check their pension balance statements from Bernie Madoff...I mean Mike Madigan...and see $1,000 but in reality there's only $300 backing it up. Due to that ponzi scheme lie, the democrats will then try to fleece taxpayers for the $700 difference. Taxpayers are now on the hook for balloon payments trying to catch up, junk debt ratings, high taxes, people fleeing the state etc. Whereas with a 401k what you see is what you get...see the difference?

Really? I didn’t know it was that simple, all they have to do is “get angry and demand” and presto, the money for retirement is there. What’s the match on the 401k Einstein? I’m trying to figure out how the state will spend less than the 8.2% they are supposed to match now.

[Liledgy]

Originally Posted by Mathguy

What you are missing is *timing*.

What is crushing Illinois isn't today, it's 40+ years ago when they promised massive pensions and healthcare benefits in retirement in order to reward their loyalists.

You don't have to accrue a liability for public pensions so it didn't show up in the budget.

So now here we are and I have at least 3 relatives drawing from the teachers pension. (there are other public pensions just as bad) So I fully understand the issue. I'm not anti-union but in this case, I think there is strong cause to understand that <public unions> + <government control> + <rich pensions with no accountancy impact> = <disaster decades later>

Basically, there is no "fix" other than reduced services and higher taxes.

I'm not trying to be mean. IL is where I grew up, most of my family lives there and several are either current pensioners or projected ones from the IL government.

It's a GIANT poo-sandwich and I'll stay far away from it as the government tries to now force current residents to pay for past promises.

Mathjack, I respect the heck out of you so no offense taken. But, how is the state being generous with an 8.2% contribution to the teachers pension? They don’t get social security which would be 6.2%, so are you saying a 2% increase from the what they would have to contribute to SS is generous? Indiana is “right to work” and they contribute 5.2% (or 5.5%), plus social security. Why can’t these supposedly “powerful unions” get that deal?

[MSchemist80]

Even 8.2% won't be enough. Everyone agrees that the expected ROI on the pension funds are overly optimistic and the pensions are guaranteeing absolute returns (unlike 401k's) plus COL increases that likely won't pan out. John Bogle is predicting 4% average returns on the stock market for the next decade. Not to mention possible increases in life expectancy in the future.

https://www.cnbc.com/2017/11/20/jack...nd-beyond.html