But they are being paid. If there is a shorfall in the future they will deal with it. You act like they are not being paid.....but they are. And they have also changed the system for new people coming in.
Relax chicken little....the sky is not falling
What do you mean I am acting like they are not being paid? Do you understand anything about how the funded status of pensions is calculated or what it means? I'm guessing not, based on this post.
You have some real cognitive deficits if you see nothing wrong with the pension systems in states like Illinois and New Jersey.
No mechanism exists to divert federal discretionary spending to state and municipal pensions. Federal outlays are not how money goes into pension funds. ?
How do you enforce this act of "getting rid of special tax subsidies" across states and cities?
federal pensions are public pensions.. don't you know. and they depend on federal funding and what federal expenditures are
State pensions.. depend on state funding and state expenditures
The same with municipal funding. (though municipal funding can depend on state funds as well).
sorry.. but its hard for me to have tremendous sympathy for a state.. that cries about how terrible its pension system is NOW.. When the state and its taxpayers were perfectly happy for more than a decade.. skimming off the profits from its pension system (promising 8% to the pensioners and actually getting 17% in earned money) .. and using it to fund all sorts of things, from special tax breaks to midnight basketball for inner city youth.
then.. when the economy changed and suddenly they are earning 6%.. and but having to pay 8%.. they start screaming about how terrible those state employees are
with their "greed and entitled" view..
Good job. And since the topic of the thread focused on state and municipal pensions, again, cutting defense spending doesn't create a solution for pensions.
.
Theoretically the federal government could create money to "fix" any financial problem. The federal government doesn't even need to cut defense spending to have the means to theoretically put any amount of money into state and local pension funds that it wants. But do you understand why, even though this is theoretically possible, that it shouldn't be done in some cases? One of the biggest reasons is the moral hazard it creates. It distorts people's sense of risk, encourages irresponsible financial management, and undermines fiduciary duty when the federal government signals it will create fiat currency to bail out bad decisions and bad financial management. The idea that federal expenditures should be relied on to fully fund benefits on behalf of horribly managed pensions is a way of actively and directly encouraging states to underfund their pensions.
Please try for honesty. The state and its taxpayers did not "skim off the profits from its pension system to fund special tax breaks." You would have to prove that money was literally withdrawn from the pension funds for comments like this to be honest. What actually happened in most cases was simply that they didn't put enough money into the pensions. Employees and taxpayers jointly.
No one is saying that. No one is saying the employees are terrible. Again, honesty.
Originally Posted by neomalthusian
They want the system to be set up to fail as long as they can get their hands on as much as possible of what's left in the pension fund before it's gone.
Originally Posted by neomalthusian
Current pension beneficiaries are raiding the funds knowing that it will screw future beneficiaries, and taxpayers as a whole, and economies as a whole. They do not care. It is quintessential greed mixed with inability to understand the fatal flaws of pensions.
I would only accuse individuals of greed entitlement if they fully understood the economic devastation the pension system was having on their state and don't care at all if future pensioners are decimated as long as current pensioners are completely untouched. If someone clearly doesn't understand the basics, it's more ignorance than greed or entitlement
I receive two of those state pensions. I will admit that some pensions are a sweetheart deal made between politicians and public unions to gain their support. The politicians didn't care because they would be long gone themselves when the pensions came due. But not everyone gets the same sweet deal at retirement . most of the formulas put the lion's share of the pension money in a relatively few pockets. I admit I'm probably getting more than I deserve because I was highly paid over a period of two decades. I could afford a 20% reduction if it would save the pension system. All of those at the top could afford a modest cut, and that's all that needs to be done to fix most of these pensions.
That would be an example of pension reform involving certain benefit cuts. Which is what I'm talking about.
I probably referenced a couple I know who worked as elementary school music teachers from 1978 to 1998 and have been retired with full pension and health benefits since then. They are 62 years old and have been retired for twenty years. They could live another 40 years and will have spent 60 years collecting a full pension and health benefits in exchange for doing 20 years of work... as elementary school music teachers. Just think about that for a minute. It's insane.
Now, I have nothing particularly against elementary school music teachers, but 20 years of that work, or any work, but especially not something as mickey mouse as elementary school music, simply cannot result in full pension and health benefits for potentially a half century or more. The contributions would have to be practically the entire compensation. I.e. like if you worked for no wages whatsoever for 20 years, with every dime instead going into a pension fund, then maybe those 20-and-out rules would have worked. It's just so insane.
And yet if you try to say those things in their presence, they will hop onto their soap box and pontificate about the wage sacrifices they made and the contributions they paid in and how they "were promised!" "YOU PROMISED!!!," they will exclaim. It doesn't matter who they think made whatever promise. The deal they got out of this situation is a major culprit in the bankrupting of the entire pension fund. It was a crooked deal.
The only, and I mean only, profession where working for 20 years maybe should result in that kind of lifelong benefits is active duty military deployed to war zones multiple times, because that comes with a very significant risk of death and long-term disability. Almost nothing else I can think of rises to that level.
I won't actually disagree with you except to say teaching music to elementary students can be excruciating work. You can take my case for example, and make some judgements based on that; I worked in a public school system for just over 30 years, age 56, retired on 80% of my salary, which began immediately. Went to work at a public college and taught there until age 67, and collected an additional pension from that. All the while I was teaching I had a construction company, Have a ROTH IRA and additional SS from that. (Only taught 15hrs per week as a professor). My wife collects one private pension and one public pension, both good, and SS. But to be fair, getting a rather generous pension at a rather young age (eligible at 55) probably isn't fair to the taxpayer. And nothing prohibits you from going to work for another public institution and then collecting a pension from them. It doesn't result in any reduction in either pension, unlike SS work rules. It's called double-dipping, and is quite common.
For the sake of not undermining my broader arguments, I won't fixate on placing value judgments against elementary music teaching. The bigger point is that the existence and size of unfunded pension liabilities inherently demonstrates that the required contributions during pensioners' working years, both in terms of deductions from the worker's wages as well as the employer match (former taxpayers) were too low, which indicates the calculations that supported the contribution requirements back then had underlying assumptions that were too optimistic. This means that former workers and former taxpayers jointly did not pay enough back then.
Beyond that, the fact that current law requires pensions be paid in full continuously and without modification, no matter how poor the financial health of the pension fund, until the money is practically gone, this creates a policy situation that, by design, overwhelmingly favors current retirees no matter how detrimental we know it will eventually be for current and future taxpayers and other public sector workers.
Ultimately state and local pensions are going to force us to decide between two unconscionable options:
1) Bail them out with federal dollars, which would create the biggest governmental accounting moral hazard in history, because it would mean that those states which managed their pensions worst get the greatest relative benefit and those that managed them best get nothing but a big share of the cost of other states' irresponsibility. If this ever comes to pass, it should go hand-in-hand with federal abolition of state and local defined benefit pensions (i.e. roll all pension funds into SS and abolish state departments of retirement and benefits). This would be an imperative if we were to federally bail out pensions, because if states know the feds ultimately backstop pensions anyway, then managing pension funds prudently becomes stupid, and managing them stupidly becomes smart.
2) Let states go quasi-bankrupt (even though they legally can't), and force them to decide how much they are going to slash benefits vs. slash government services and payrolls vs. spike taxes. This would basically be a decision to intentionally end up in a state of chaos and statewide economic collapse for nothing but the short-term benefit of today's retirees. The economic devastation associated with these scenarios ruins countless lives. And for what? To "honor the promises that were made" by a dead politician 40 years ago that went underfunded because of actuarial miscalculations.