Dr.Sack Posted February 24, 2017 Share Posted February 24, 2017 What is the deal with state pensions? George Will explains... http://siouxcityjournal.com/news/opinion/columnists/will/george-will-america-faces-a-predictable-pension-crisis/article_2f30a67c-bcc4-5b0f-bd93-1f294ecc0732.html Link to comment Share on other sites More sharing options...
Chef Jim Posted February 24, 2017 Share Posted February 24, 2017 What is the deal with state pensions? Who are you Jerry Seinfeld? Link to comment Share on other sites More sharing options...
keepthefaith Posted February 24, 2017 Share Posted February 24, 2017 Low yields resulting in lower than expected returns on pension investments mean shortfalls, but the real solution is scrapping these plans and replacing them going forward with 401K or IRA programs mostly funded by the workers. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 24, 2017 Share Posted February 24, 2017 Low yields resulting in lower than expected returns on pension investments mean shortfalls, but the real solution is scrapping these plans and replacing them going forward with 401K or IRA programs mostly funded by the workers. Add the increase of life expectancy. I have a client who was the Head Librarian for a county up here. Her pension at the age of 59? $150k a year and full benes. That's why we have a problem. Link to comment Share on other sites More sharing options...
meazza Posted February 24, 2017 Share Posted February 24, 2017 Add the increase of life expectancy. I have a client who was the Head Librarian for a county up here. Her pension at the age of 59? $150k a year and full benes. That's why we have a problem. Are they hiring? Link to comment Share on other sites More sharing options...
keepthefaith Posted February 24, 2017 Share Posted February 24, 2017 Add the increase of life expectancy. I have a client who was the Head Librarian for a county up here. Her pension at the age of 59? $150k a year and full benes. That's why we have a problem. That's outrageous and implies that while she was working she was earning more than that? Link to comment Share on other sites More sharing options...
Dr.Sack Posted February 24, 2017 Author Share Posted February 24, 2017 Add the increase of life expectancy. I have a client who was the Head Librarian for a county up here. Her pension at the age of 59? $150k a year and full benes. That's why we have a problem. It's women like this whose husbands mysteriously end up missing. Next thing you know the pool boy gets a promotion to plumber. Link to comment Share on other sites More sharing options...
BillsFanNC Posted February 24, 2017 Share Posted February 24, 2017 That's outrageous and implies that while she was working she was earning more than that? It's likely that something like this is going on. Take Val Barkley, a custodial worker for the Philadelphia Department of Health who worked more overtime hours than any other city employee last year. His base pay is $27,922 annually. But overtime boosted his total earnings to $86,500 in 2013, $78,055 in 2012 and $81,218 in 2011. Link to comment Share on other sites More sharing options...
GG Posted February 24, 2017 Share Posted February 24, 2017 Low yields resulting in lower than expected returns on pension investments mean shortfalls, but the real solution is scrapping these plans and replacing them going forward with 401K or IRA programs mostly funded by the workers. Dirty secret of 401k and IRAs is that few people put aside enough to get them through retirement. Fundamental change to retirement accounts is needed, but moving everything to 401ks will be a disaster Link to comment Share on other sites More sharing options...
Chef Jim Posted February 24, 2017 Share Posted February 24, 2017 Dirty secret of 401k and IRAs is that few people put aside enough to get them through retirement. Fundamental change to retirement accounts is needed, but moving everything to 401ks will be a disaster Fundamental change? Who are you suggesting put together and lead this change? The only change that is needed is education. Start early teaching kids about investing and the power of compound growth. Hammer them with it. Link to comment Share on other sites More sharing options...
keepthefaith Posted February 24, 2017 Share Posted February 24, 2017 Dirty secret of 401k and IRAs is that few people put aside enough to get them through retirement. Fundamental change to retirement accounts is needed, but moving everything to 401ks will be a disaster A disaster for who? The way this "system" works now, me and most others who are not government employees are forced through taxation to fund comfy retirements for local, state and federal employees and can only fund our own retirements (if we can afford to) after we have funded that of the government employees. Why should government employees get a guaranteed retirement funded by others who may not be able to fund their own retirements? Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 24, 2017 Share Posted February 24, 2017 (edited) What is the deal with state pensions? George Will explains... http://siouxcityjournal.com/news/opinion/columnists/will/george-will-america-faces-a-predictable-pension-crisis/article_2f30a67c-bcc4-5b0f-bd93-1f294ecc0732.html You'll have to be more specific. Some state pensions are well run, and others are disasters waiting to happen (like the Rhode Island state pension fund). Dirty secret of 401k and IRAs is that few people put aside enough to get them through retirement. Fundamental change to retirement accounts is needed, but moving everything to 401ks will be a disaster A disaster for whom exactly? State employee pensioners who live off a largess doled out to them by tax-payers whose state governments are going broke and will have to foot the bill? Tough cookies. They should be in the same boat as everyone else. The real issue here is financial education, which should be required curriculum in every school at every grade level post basic arithmetic. Edited February 24, 2017 by TakeYouToTasker Link to comment Share on other sites More sharing options...
GG Posted February 24, 2017 Share Posted February 24, 2017 A disaster for who? The way this "system" works now, me and most others who are not government employees are forced through taxation to fund comfy retirements for local, state and federal employees and can only fund our own retirements (if we can afford to) after we have funded that of the government employees. Why should government employees get a guaranteed retirement funded by others who may not be able to fund their own retirements? It's not a binary solution. Don't for a second think that moving everything to a defined contribution plan will solve the problem, because all you will be doing is reducing the employers' contribution to the retirement system. Pension overhaul is needed, especially in the public sector, with lower pension payouts and later retirement eligibility. But a hybrid defined benefit/defined contribution scheme needs to be in place. Link to comment Share on other sites More sharing options...
grinreaper Posted February 24, 2017 Share Posted February 24, 2017 http://corruptauthority.com/pension-benefits-state-government-pension-reform-3203/ •Retired superintendent of New Trier Township High School District Hank Bangser, collects a $261,681 state pension, while working as a school superintendent in Southern California’s Ojai Unified School District making $170,000. His total annual compensation: $431,681. •Retired Wheaton Superintendent Gary Catalani receives a $237,195 Illinois state pension while earning another $195,000 from the Scottsdale, Arizona school district. His total annual compensation: $432,195. •Retired South Cook superintendent Eric King receives a $166,608 Illinois state pension and earns another $168,343 salary as the superintendent of the Muncie, Indiana school district, for a total of $334,951. •Retired East Maine Superintendent Kathleen Williams receives a $177,711 Illinois state pension, and earns another $156,000 in Wausau, Wisconsin. Her total compensation: $333,711. •Retired Superintendent Rebecca van der Bogert collects a $169,050 Illinois state pension, another $21,974 from Massachusetts, and currently works in Florida as the head of the Palm Beach Day Academy. •Retired superintendent of the Oak Park and River Forest Districts Attila Weniger, receives an Illinois state pension of $180,302 while earning another $149,500 as the superintendent of the Stevens Point Area Public Schools District in Wisconsin, for a total of $329,802. Link to comment Share on other sites More sharing options...
Pine Barrens Mafia Posted February 24, 2017 Share Posted February 24, 2017 Fundamental change? Who are you suggesting put together and lead this change? The only change that is needed is education. Start early teaching kids about investing and the power of compound growth. Hammer them with it. Education, huh? In the world of an evaporating middle class, we'll need more than education. With real incomes adjusted for inflation stagnant over the past 30 years, saving is less an option than ever. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 24, 2017 Share Posted February 24, 2017 Education, huh? In the world of an evaporating middle class, we'll need more than education. With real incomes adjusted for inflation stagnant over the past 30 years, saving is less an option than ever. People spend well above their means, and could easily save more with different, more responsible priorities. Education isn't a silver bullet, but it's damn close. Link to comment Share on other sites More sharing options...
meazza Posted February 24, 2017 Share Posted February 24, 2017 (edited) People spend well above their means, and could easily save more with different, more responsible priorities. Education isn't a silver bullet, but it's damn close. Won't happen when the unions block it: http://www.680news.com/2017/02/12/quebec-high-school-finance-course-concocted-by-the-banks-according-to-unions/ Education Minister Sebastien Proulx wants the personal finance course to be mandatory in high schools across the province, starting September, while unions are demanding he suspend the rollout.“Certainly the introduction of a class like this is not in line with our philosophy of education,” said Sebastien Joly, president of the Quebec Provincial Association of Teachers. “It’s coming from the financial groups, bankers, and what not…We have more of a liberal view. You’re supposed to acquire knowledge that would open your horizons and help you from a critical standpoint.” Sylvain Mallette, head of a separate teachers union, is less diplomatic. “This class was concocted by the banks,” he said in various interviews. “How do we know the material that is being imposed won’t include marketing for the banks’ financial products?” Edited February 24, 2017 by meazza Link to comment Share on other sites More sharing options...
dpberr Posted February 24, 2017 Share Posted February 24, 2017 (edited) I think pensions are THE collection of hairs that will snap the backs of many states. It's about as close as you get to a financial "extinction event" for a town, school district or state because it's so big. It was a crisis in 2000. Today it's like looking at a Category 5 hurricane on collision course with your town. I'm involved in the pension issues in Pennsylvania and insofar as PA goes, much of the state's pension issues are due to self inflicted wounds, very unfavorable demographic trends and a pension agency and legislature that steadfastly refuses to reform. During the 90s, legislators voted in very generous increases in benefits and the required employer contributions to the system were near zero because "times were so good" I agree with Will in that their actuarial calculations are based on voodoo/wildly crazy projections - still expecting a 7.5% return when it's more like 3-4% and that's being optimistic in my opinion. The candid truth is that Pennsylvania is running out of taxpayers and has a 3 billion dollar state deficit to boot at a time when there is this big surge of retirements putting strain on the system. Calculations by the state's independent fiscal office project a retraction in working age population in PA absent a very optimistic surge of international migration. When taxpayers reach retirement age, they check out to FL, AZ, TX en masse. The age groups backfilling that loss aren't on the tax rolls at all or are making substantially less in income. So in short, there's a lot of people taking from the system and fewer feeding into it. Edited February 24, 2017 by dpberr Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 24, 2017 Share Posted February 24, 2017 Won't happen when the unions block it: http://www.680news.com/2017/02/12/quebec-high-school-finance-course-concocted-by-the-banks-according-to-unions/ Then fight that fight with the unions. It's not a battle they can win. Link to comment Share on other sites More sharing options...
meazza Posted February 24, 2017 Share Posted February 24, 2017 Then fight that fight with the unions. It's not a battle they can win. In Quebec? You might end up in the trunk of a car with two holes in your head. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 24, 2017 Share Posted February 24, 2017 It's not a binary solution. Don't for a second think that moving everything to a defined contribution plan will solve the problem, because all you will be doing is reducing the employers' contribution to the retirement system. Pension overhaul is needed, especially in the public sector, with lower pension payouts and later retirement eligibility. But a hybrid defined benefit/defined contribution scheme needs to be in place. It already is for a vast majority of Americans. Link to comment Share on other sites More sharing options...
GG Posted February 24, 2017 Share Posted February 24, 2017 It already is for a vast majority of Americans. It is and should stay that way. I was responding to commentary that all plans should move to defined contribution, which in my opinion will lead to a far worse outcome. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 24, 2017 Share Posted February 24, 2017 It is and should stay that way. I was responding to commentary that all plans should move to defined contribution, which in my opinion will lead to a far worse outcome. Not sure if you were aware the I was referring to Social Security as a "defined benefit" program. I think all public sector employees need the exact same situation. No more tax payer funded pensions. Phase them out over time. They should be on Social Security and the difference needs to be up to them. The problem with the current pension system is the public sector employees have access to their pensions way too early. My librarian example earlier is a perfect example. She's going to be on the public dime for 30 years or more. Using just a minimum COLA of 2% her income will be nearly a quarter of a million dollars when she's 80. That's absurd. Education is first and foremost here. Link to comment Share on other sites More sharing options...
GG Posted February 24, 2017 Share Posted February 24, 2017 Not sure if you were aware the I was referring to Social Security as a "defined benefit" program. I think all public sector employees need the exact same situation. No more tax payer funded pensions. Phase them out over time. They should be on Social Security and the difference needs to be up to them. The problem with the current pension system is the public sector employees have access to their pensions way too early. My librarian example earlier is a perfect example. She's going to be on the public dime for 30 years or more. Using just a minimum COLA of 2% her income will be nearly a quarter of a million dollars when she's 80. That's absurd. Education is first and foremost here. SS needs to be revamped, but that won't be enough. As I said, public pension schemes need to be revamped to increase qualification for full pensions and raise the retirement. Private companies realized more than a decade ago that they can't afford pensions that were less generous than public pensions. But again, you can't go all defined contribution. Link to comment Share on other sites More sharing options...
Chef Jim Posted February 24, 2017 Share Posted February 24, 2017 SS needs to be revamped, but that won't be enough. As I said, public pension schemes need to be revamped to increase qualification for full pensions and raise the retirement. Private companies realized more than a decade ago that they can't afford pensions that were less generous than public pensions. But again, you can't go all defined contribution. SS will be revamped at some time. It's a tough topic for the pols to talk about. They likely will do away with the the ability to draw at 62 and FRA needs to be bumped to 70 ASAP. The longer they delay these the harder it's going to be. They've got a very large segment of the population (millennial) that need their SS changed while their still young. Millennials who are now entering the work force if they take SS at 62 will have no challenge getting checks for 50 years. Link to comment Share on other sites More sharing options...
Greg F Posted February 24, 2017 Share Posted February 24, 2017 SS will be revamped at some time. Since the Federal government prints the currency, the solution will be the age old one of inflating away the real value while simultaneously rigging the CPI. The states OTOH don't have that luxury. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 24, 2017 Share Posted February 24, 2017 SS needs to be revamped, but that won't be enough. As I said, public pension schemes need to be revamped to increase qualification for full pensions and raise the retirement. Private companies realized more than a decade ago that they can't afford pensions that were less generous than public pensions. But again, you can't go all defined contribution. You absolutely can and should go 100% defined contribution. Education surrounding the importance of saving and investing for retirement and other financial goals need to be a staple of our education system. Couple that with financially incentivizing employers to increase their participation on their employees behalf via the tax code, and you'll solve the problem. Defined benefits plans aren't financially viable to offer anymore, which is why they are rapidly disappearing from the private sector. Link to comment Share on other sites More sharing options...
Joe Miner Posted February 25, 2017 Share Posted February 25, 2017 You absolutely can and should go 100% defined contribution. Education surrounding the importance of saving and investing for retirement and other financial goals need to be a staple of our education system. Couple that with financially incentivizing employers to increase their participation on their employees behalf via the tax code, and you'll solve the problem. Defined benefits plans aren't financially viable to offer anymore, which is why they are rapidly disappearing from the private sector. You have to realize that you won't be able to educate all the retards that work in the public sector no matter how much you try. They attend work in the public sector for a reason. But I will say I'm awful tired of paying the money that supports these idiots flush retirements. Link to comment Share on other sites More sharing options...
Nanker Posted February 25, 2017 Share Posted February 25, 2017 SS will be revamped at some time. It's a tough topic for the pols to talk about. They likely will do away with the the ability to draw at 62 and FRA needs to be bumped to 70 ASAP. The longer they delay these the harder it's going to be. They've got a very large segment of the population (millennial) that need their SS changed while their still young. Millennials who are now entering the work force if they take SS at 62 will have no challenge getting checks for 50 years. A few other things should be stopped as well. Have any incremental push for waiting past 70 should be capped at two years. Currently you can gain more by waiting till age 70 to "max out" your benefit. That's a five year 4% push per year on your benefit. Disability should be really a lot harder to get SS for. You should need more than a doctor's note to prove you're incapable of doing any work. There are tens of thousands of people who gave up looking for work and when their 99 weeks of unemployment ran out - applied for and got SS because they were "disable". There are other aspects of the program that need to be trimmed too. Senator Moynihan was the last real Senator IMO and he had the courage and intellect to tackle revamping SS. It needs to be done again. Link to comment Share on other sites More sharing options...
keepthefaith Posted February 25, 2017 Share Posted February 25, 2017 She's going to be on the public dime for 30 years or more. Using just a minimum COLA of 2% her income will be nearly a quarter of a million dollars when she's 80. That's absurd. Yes it is absurd and here in Illinois we have about the worst examples of this and the worst pension situation in the country. We have a governor willing to make the tough call to revise state gov pensions going forward but the dems in state government won't even consider it even with the awful numbers under their noses. Shameful, but I'm !@#$ing out of Illinois in a few years so I don't give a ****. Link to comment Share on other sites More sharing options...
TakeYouToTasker Posted February 26, 2017 Share Posted February 26, 2017 You have to realize that you won't be able to educate all the retards that work in the public sector no matter how much you try. They attend work in the public sector for a reason. But I will say I'm awful tired of paying the money that supports these idiots flush retirements. I'm not talking about educating public sector employees. I'm talking about mandating basic finance and household budgeting classes at every grade level post-arithmetic. Link to comment Share on other sites More sharing options...
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