Yahoo...yield curve inversion...how long does Illinois have left? (Chicago: real estate market, credit rating)

[Kmanshouse]

Multiply this by thousands of workers at various ages. Also, perhaps some inflated mortality assumptions that aren't up to date either, and assuming more people quit their jobs than actually do, etc. etc. And of course, the pensioners are getting way more than $1,000.

It's not hard to see how a state can keep its head in the sand, make the regular contributions and wake up one day and say, HOW COME WE ARE BILLIONS SHORT?

What gets me then, are the government workers who think that getting a healthy annuity pension with annual cost of living increases (COLAs) is a normal proposition. It's not. Time to wake up and be real here. COLAs are virtually non-existent in the private sector - I think I've had one client in my 20+ years of practice that had one, and I'd bet that plan was frozen long ago.

[Jon998877]

Originally Posted by Kmanshouse

Multiply this by thousands of workers at various ages. Also, perhaps some inflated mortality assumptions that aren't up to date either, and assuming more people quit their jobs than actually do, etc. etc. And of course, the pensioners are getting way more than $1,000.

It's not hard to see how a state can keep its head in the sand, make the regular contributions and wake up one day and say, HOW COME WE ARE BILLIONS SHORT?

What gets me then, are the government workers who think that getting a healthy annuity pension with annual cost of living increases (COLAs) is a normal proposition. It's not. Time to wake up and be real here. COLAs are virtually non-existent in the private sector - I think I've had one client in my 20+ years of practice that had one, and I'd bet that plan was frozen long ago.

But the state hasn't made regular payments in years, rather using the pension plans as their credit card and kicking this problem down the road. What gets me as that citizens of the state knew this was happening and let it happen, happy that entitlements and other wasteful projects were being funded when they should have been cut. And now all of a sudden the mantra is "lets just screw over the teachers, law enforcement and firemen because thats the easy way out"..

Why not be responsible as a society and pay your debts?

[Liledgy]

Originally Posted by GhostOfAndrewJackson

It is not fully funded and it is a fiscal disaster like all non-cash balance defined contribution plans are. It is more than 5 billion underfunded and simply masks its issues because of the annual funding mandate.

I would say you need to educate yourself but it seems pretty clear you have an agenda that has no foundation in actuarial science, finance, or proper fiscal governance.

In the event you actually care to open your mind to a portion of the issues surrounding the IMRF the following article sheds some light on some of the issues surrounding the IMRF.

https://www.illinoispolicy.org/5-fac...-pension-fund/

This article should also be illuminating:

https://www.chicagotribune.com/subur...812-story.html

Your gonna have to find a better source the Illinois policy, lol. As of december 31st 2017 it was over 97%, probably higher now. The only problem cities are having with the imrf is that they Are having major problems finding the police and fire pensions. Cops and fireman pension is base on there last pay period (not averaged over 4 years), they also (most) get a one rank promotion there last pay period (spiking), on top of that there is no reduction in pension if there spouse dies (or they die), it keeps paying 100%. The cops and fireman are why the cities are having problems paying pensions, not the IMRF. On top of that, the citys are saving 40% on any one hired into the imrf for employment under tier two. The cities hit the lotto back in 2011 with the changes to the imrf pension (which was fully funded then too!).

[dtcbnd03]

Originally Posted by Jon998877

In Detroit the agreement was that pensions would be cut by 4.5%, which would cost the average teacher in TRS about $3K a year.. if that was the agreement here in Illinois, I would be ok with that as a teacher.. of course my first choice would be to simply have us all work longer, thus paying in longer and receiving benefits for fewer years..

New Jersey. Illinois. California. New York. Social Security. Even the PBGC which is insurance against private pension funds failing...is itself...failing. Detroit was a drop in the bucket compared to what Illinois owes. And you working longer is taking a cut in another form.

Seriously. Let's just all face the music now...negotiate a cut with pensioners...switch to 401k forever...and get this over with.

[GhostOfAndrewJackson]

Originally Posted by Liledgy

Your gonna have to find a better source the Illinois policy, lol. As of december 31st 2017 it was over 97%, probably higher now. The only problem cities are having with the imrf is that they Are having major problems finding the police and fire pensions. Cops and fireman pension is base on there last pay period (not averaged over 4 years), they also (most) get a one rank promotion there last pay period (spiking), on top of that there is no reduction in pension if there spouse dies (or they die), it keeps paying 100%. The cops and fireman are why the cities are having problems paying pensions, not the IMRF. On top of that, the citys are saving 40% on any one hired into the imrf for employment under tier two. The cities hit the lotto back in 2011 with the changes to the imrf pension (which was fully funded then too!).

As I clearly stated, you obviously have a political agenda and beliefs that are not founded in financial acumen or on actuarial science as you persist in your mythos despite the facts this is evidenced by, among other things, your use of the term "fully funded". They are not fully funded, they are actuarially funded, as repeatedly explained that is a very different and offers no assurance that there will be adequate funds available for the retirees. All it means is, at this point in time, if the plan earns its assumed rate of return, and if the life actual lifespans of the retirees do not exceed the assumed lifespan of the participants (fyi, the government is revising its tables) then the plan can meet its obligations.

The fact there was a funding fluctuation between 80 some percent and 90 some percent in a handful of years illustrates the point.

Once again, there are no sound defined benefit plans except cash balance plans - period. That is an absolute. This does not mean a pension plan cannot be an outlier, it does not mean a pension cannot periodically outperform or underperform, what it does mean is there is no way to guarantee the money will actually be there. It all speculation based on historical precedents set before their was globalization, before there was an aging workface, before knowledge jobs became virtual, before the advent of AI, and before the current age of life expanding gene therapies.

Stated differently a pension is based on anything other than here is a lump of money, you may have this lump of money plus whatever interest it earns after being invested in GICs, CDs, or U.S. treasuries Is not sound, it is speculative.

[My Kind Of Town]

http://www.forbes.com/sites/debtwire...-backyard/amp/

[Jon998877]

Originally Posted by dtcbnd03

New Jersey. Illinois. California. New York. Social Security. Even the PBGC which is insurance against private pension funds failing...is itself...failing. Detroit was a drop in the bucket compared to what Illinois owes. And you working longer is taking a cut in another form.

Seriously. Let's just all face the music now...negotiate a cut with pensioners...switch to 401k forever...and get this over with.

Sure, I will be willing to negotiate a 5% cut in my pension if the state will approve 2% income tax increase, all of it being guaranteed to be put into the pension funds.

[westender]

Originally Posted by dtcbnd03

New Jersey. Illinois. California. New York. Social Security. Even the PBGC which is insurance against private pension funds failing...is itself...failing. Detroit was a drop in the bucket compared to what Illinois owes. And you working longer is taking a cut in another form.

Seriously. Let's just all face the music now...negotiate a cut with pensioners...switch to 401k forever...and get this over with.

The problem is with the low levels of the pension funds, the state doesn't have the money to even provide 50% of the promised pensions. Maybe 30%, but little more.

I don't see how you persuade the pensioneers to accept 30 cents on the dollar.

[Sunbiz1]

Originally Posted by Jon998877

Sure, I will be willing to negotiate a 5% cut in my pension if the state will approve 2% income tax increase, all of it being guaranteed to be put into the pension funds.

Many of these pensions can be obtained after 20 years of employment.
The remainder of taxpayers working 40 years should not be asked to foot the bill for early retirements.

[Jon998877]

Originally Posted by Sunbiz1

Many of these pensions can be obtained after 20 years of employment.
The remainder of taxpayers working 40 years should not be asked to foot the bill for early retirements.

I guess I do not see a problem with someone getting a 44% pension after working 20 years, as someone that made a career change at age 40 thats what I will be looking at..