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"And now, their fears are being realized: cities throughout the state, wealthy towns such as Southampton and East Hampton, counties like Nassau and Suffolk, and other public employers like the Westchester Medical Center and the New York Public Library are all managing their rising pension bills by borrowing from the very same $140 billion pension fund to which they owe money...."
"And now, their fears are being realized: cities throughout the state, wealthy towns such as Southampton and East Hampton, counties like Nassau and Suffolk, and other public employers like the Westchester Medical Center and the New York Public Library are all managing their rising pension bills by borrowing from the very same $140 billion pension fund to which they owe money...."
That is what happens when pension funs are not independently mangaged as most state funds are. Government is greedy and there are only a few entities that have money for them to grab and pension funds are one of them in some cases.
That is what happens when pension funs are not independently mangaged as most state funds are. Government is greedy and there are only a few entities that have money for them to grab and pension funds are one of them in some cases.
Yeah but what if the "good times" don't come around too soon and the "lending fund" (i.e. pension fund that is being borrowed from) is left holding the bag??
But the federal government has been doing that to Social Security Fund for years. The 'surplus' in SS is in US Gov bonds. 15T in debt, so the Federal gov will need to cut services, raise taxes and/or cut benefits, as the SS fund start cashing in its bonds.
Yeah but what if the "good times" don't come around too soon and the "lending fund" (i.e. pension fund that is being borrowed from) is left holding the bag??
Since most government employees are unionized and their pension benefits were established throught collective bargaining agreements with government at point of hire, regardless of default and shortages at point of retirement, they are guaranteed those pension benefits. Therefore shortages would have to be made up by government even if they had to come from general revenues.
Courts have established that it's a contractual matter/guarantee regarding retirement benefits that cannot be abrogated for retirees even by bankruptcy. Changes can only be made forward for future employees. Existing emplopyees can, however, be required to increase their share of funding if agreed upon through collective bargaining.
Yeah but what if the "good times" don't come around too soon and the "lending fund" (i.e. pension fund that is being borrowed from) is left holding the bag??
That is why pensioners need to look at the funding level of pensions in their state and be prepared for a percentage reduction in their payment that reflects the shortcoming.
That is why pensioners need to look at the funding level of pensions in their state and be prepared for a percentage reduction in their payment that reflects the shortcoming.
Not for most. Benefit contracts established by collective barghaining in effect at time of hire are absolute.
Last edited by Curmudgeon; 02-28-2012 at 10:29 AM..
Not for most. Benefit contracts established by collective barghaining in effect at time of hire are absolute.
Not if the tax dollars aren't there to support it and all the wealthy people have fled the state it is called the kettle is empty. I am prepared for a 20% cut and looking at returns over the last decade and the policies of the Fed and the current administration these are not good times for pension funds and their fixed income component. Sorta like Greece do we if things get bad have an orderly pension fund crisis or a disorderly one where we give the money out at agreed upon rates until one day it is all gone and folks have a 95% reduction with only current worker contributions available. I know a 75% sales tax rete and we tax the poor 80% and we raise property taxes 10 fold. How is the property tax thing working for Jersey? Hopefully they are secure but it is up to the individual to decide how prepared they want to be for a worse case scneario.
...it means Greece Part II. Sad for those retirees that will be left with dust.
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Cities borrowing from their own pension funds, where is this leading
