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Thread: Michigan AG to defend Public Pensions in bankruptcy

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by haymarket View Post
    A very wise post. The reality is that in 1950, southeast Michigan had 4.5 million people. Today, the same area still has 4.5 million people. However, Detroit which had 1.8 million is now down to just over 700,000. Those 1.1 million people and their taxes went to surrounding suburbs. Short term gain for them turned into long term problem for the city and now the state.
    One thing the city of Detroit could do would be to require that anyone working FOR the city LIVE in the city. That's the way it is in Chicago. If it weren't, Chicago would be in the same flight condition that Detroit finds itself in.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by haymarket View Post
    And what information do you have Maggie to show that this is an outright lie?
    85% of current active participants in Michigan's pension plan have their pensions figured as below:

    Annual pension benefit formula (in general):

    Hires before July 1, 2010:
    Final average 3 years’ compensation[§§] x 1.5 percent x years of service

    Hires on or after July 1, 2010:
    Final average 5 years’[***] compensation x 1.5 percent x years of service

    Comparing Michigan Private-Sector Pensions to MPSERS

    Do the math. Figure a 3-year average just before retirement at $50,000 X 3 (first example) = $150,000 X 1.5% = $2,250 X 30 Years = $67,500.
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by MaggieD View Post
    85% of current active participants in Michigan's pension plan have their pensions figured as below:

    Annual pension benefit formula (in general):

    Hires before July 1, 2010:
    Final average 3 years’ compensation[§§] x 1.5 percent x years of service

    Hires on or after July 1, 2010:
    Final average 5 years’[***] compensation x 1.5 percent x years of service

    Comparing Michigan Private-Sector Pensions to MPSERS

    Do the math. Figure a 3-year average just before retirement at $50,000 X 3 (first example) = $150,000 X 1.5% = $2,250 X 30 Years = $67,500.

    A three year average doesn't mean (using $50K) = (50,000 + 50,000 + 50,0000) * 1.5 = 150,000 * 1.5 = 2,250


    A three year average would mean (using $50K) = ((50,000 + 50,000 + 50,0000/3) * 1.5 = 50,000 * 1.5 = 750


    Meaning the calculation would be = ((50,000 + 50,000 + 50,000)/3) * 1.5 * 30 = 50,000 * 1.5 * 30 = 750 * 30 = $22,500






    Average means sum the values of the elements in the set and then divide by the number of elements in the set. It doesn't mean sum the elements and stop.


    >>>>

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by WorldWatcher View Post
    A three year average doesn't mean (using $50K) = (50,000 + 50,000 + 50,0000) * 1.5 = 150,000 * 1.5 = 2,250


    A three year average would mean (using $50K) = ((50,000 + 50,000 + 50,0000/3) * 1.5 = 50,000 * 1.5 = 750


    Meaning the calculation would be = ((50,000 + 50,000 + 50,000)/3) * 1.5 * 30 = 50,000 * 1.5 * 30 = 750 * 30 = $22,500






    Average means sum the values of the elements in the set and then divide by the number of elements in the set. It doesn't mean sum the elements and stop.


    >>>>
    Jesus Christ, Maggie!!!!!!!!!!!! More coffee!!!!!!!!!!!!!!!! Thanks for straightening me out, WorldWatcher. And, considering the magnitude of mistake, I'd say you were quite polite about it.

    It loses quite a lot of punch when I point out that it's STILL $22,500 compared to the oft-used $19,000 figure, doesn't it??
    The devil whispered in my ear, "You cannot withstand the storm." I whispered back, "I am ​the storm."

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by MaggieD View Post
    Jesus Christ, Maggie!!!!!!!!!!!! More coffee!!!!!!!!!!!!!!!! Thanks for straightening me out, WorldWatcher. And, considering the magnitude of mistake, I'd say you were quite polite about it.

    It loses quite a lot of punch when I point out that it's STILL $22,500 compared to the oft-used $19,000 figure, doesn't it??

    No prob.

    Actually this thread made me look up my own retirement projection last night. I'm under VRS (Virginia Retirement System) and make about $60,000 a year and my projected retirement is $2,100 a month ($25,200) and there is no medical insurance after Medicare qualification age.

    My system as 2725 Full Time (i.e. can be part of the retirement system) and of those 2112 make below the $50,000 mark and lots of those (bus attendants, bus drivers, secretaries, instructional assistants, etc.) make less than $25,000 per year. Using the previous formula that would be less that $11,000 per year in retirement.


    Disclaimer: I'm kind of an oddball because I didn't start under VRS until I was about 40 and have a defined benefit retirement from my military career.
    Last edited by WorldWatcher; 07-28-13 at 10:22 AM.

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    The average will be pulled down by the number of late starters and part timers, who get a pro rata pension.
    Don't work out, work in.

    Never eat anything that's served in a bucket.

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by Manc Skipper View Post
    The average will be pulled down by the number of late starters and part timers, who get a pro rata pension.

    I'm not sure about MI, but in Virginia there is no "pro rated" pension for part timers, you have to be full time for employment time to qualify for participation in our states retirement.


    Can part timers participate in retirement in MI?



    >>>>

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    Quote Originally Posted by haymarket View Post
    Do you operate under the impression that the City of Detroit has to pay the entire bill for pensions at one time and their current shortfall between income and expenses will prevent them for ever honoring their incurred contractual obligations which are backed by the Michigan Constitution?
    No, I am aware how pension plans are supposed to work. What I am saying is that the city entered into bankruptcy because current revenues are unable to maintain current city services and pension plan payments; nor meet city deficits and debt balances. Something has to suffer.

    Trying to meet pensions, existing deficits, and debt paymens in bankruptcy means cutting already reduced city services to the bone and beyond. How can the city continue to function if the bulk of revenue is going to go everywhere but where it is truly needed?
    If I stop responding it doesn't mean I've conceded the point or agree with you. It only means I've made my point and I don't mind you having the last word. Please wait a few minutes before "quoting" me. I often correct errors for a minute or two after I post before the final product is ready.

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    Re: Michigan AG to defend Public Pensions in bankruptcy

    I really hate it when they leave out the actual law in what they are reporting.
    It speaks to me of dishonesty and subterfuge.


    § 24 Public pension plans and retirement systems, obligation.
    Sec. 24. The accrued financial benefits of each pension plan and retirement system of the state and its
    political subdivisions shall be a contractual obligation thereof which shall not be diminished or impaired thereby.

    http://www.legislature.mi.gov/%28S%2.../mcl-chap1.pdf


    Apparently the AG is going to have to argue the intent of the law and not the actual law.

    While contractual obligations can be renegotiated, under bankruptcies, they can be invalidated.

    It will be interesting to see how this plays out in Court, especially since this filing was a Federal, not state filing.
    Last edited by Excon; 07-28-13 at 12:22 PM.
    “The law is reason, free from passion.”
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    Re: Michigan AG to defend Public Pensions in bankruptcy

    the pensions are probably screwed, and that really bothers me. a pension is deferred salary; you take a ****tier wage in exchange for retirement money. then when it comes time to collect, all of the sudden the money isn't there, and you're screwed. it's a lousy setup, and the middle class gets hammered again and again by both public and private pensions going bust. a manufacturing company in my area just screwed its workers in this exact same way.

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