Announcement

Collapse
No announcement yet.

The Retirement “Reform” Continues

Collapse
X
Collapse
First Prev Next Last
 
  • Filter
  • Time
  • Show
Clear All
new posts

  • The Retirement “Reform” Continues

    https://www.cleveland.com/open/2019/07/house-of-representatives-votes-to-shore-up-failing-multi-employer-pensions.html

    If a union pension fund is underfunded, what is the solution? Pretty simple, put more money in.

    It’s just a LOAN. Please note that and funding will be provided by the US government and the funding of any loan defaults will come from ........? Might as well consider the options. How about accelerating taxes on retirement savings? All those unused assets haven’t been taxed. Hmmm.

  • #2
    Here's to hoping it won't pass the Senate.

    Comment


    • #3
      How are these things all underfunded in setting of a huge recent bull? If they are underfunded now imagine how they're going to look after the next 30+ % drop

      Comment


      • #4
        Expenses that are considered ordinary and necessary.

        Comment


        • #5
          From the article: “We’re not asking for a bailout, just a loan...”

          Nice try. Of course this is a bailout request. If the pension can't meet its obligations now, in the midst of a long bull market, how will it pay benefits and service the loan in the future, especially when investment returns drop dramatically or go negative?

          Answer: it won't. It's a bailout.

          Americans need to wake up to the sobering reality that so many pension plans are woefully under-funded and there are only 2 paths forward: 1. cut benefits/increase contributions and/or 2. score bailouts for the politically connected.

          Comment


          • #6




            How are these things all underfunded in setting of a huge recent bull? If they are underfunded now imagine how they’re going to look after the next 30+ % drop
            Click to expand...


            https://www.omaha.com/news/education/primary-secondary/ops-s-million-pension-shortfall-a-product-of-mind-boggling/article_db5ed0cd-b43d-57d9-a014-fd70e45b44a9.html

            Here's a good example of how these things can end up woefully behind. Omaha Public Schools pension $771M shortfall, they did exactly what you shouldn't do, got out of equities during the trough, stayed out and missed the rise, putting lots of money into "alternative" investments pitched by "advisers" and all along the way paying millions in expenses.

            Comment


            • #7
              Frustrating to read these types of things because I have mixed emotions about it.  Can't really blame the workers who in good faith agreed to all of this pension stuff in exchange for worker someplace their entire career.  Are the pensions that poorly managed that they didn't see this coming?

              Comment


              • #8




                Frustrating to read these types of things because I have mixed emotions about it.  Can’t really blame the workers who in good faith agreed to all of this pension stuff in exchange for worker someplace their entire career.  Are the pensions that poorly managed that they didn’t see this coming?
                Click to expand...


                Yes, the pensions are that poorly managed because the pension boards DID see it coming and did little/nothing.

                Also, I am sympathetic to the pensioners who now find themselves short of money and are unable to fund their retirement with the needed cuts. For those in that situation, there is welfare. For the retiree that needs to take a cut in his standard of living, but will be fine financially, I am less sympathetic. It's called moral hazard. If we bail out pension funds, we set the stage for more future mismanagement as funds will know they can act irresponsibly and be bailed out by Joe taxpayer.

                 

                Comment


                • #9
                  This situation was recognized and addressed in 1974, Erisa. The PBGC was established as the safety net for failures of pension funds. Unfunded liablities were regulated so that the Union's were responsible for performing due diligence in negotiations with companies. 401k's (current funding) were adopted by most private companies to eliminate the financing risk. Some union's adopted the 401k retirement funding model as well.

                  Union "benefits" were "negotiated" with full knowledge of the issues and contracts were ratified based on workers votes. Unions were very politically active. This is the result of the "voting process" based on rhetoric rather than informed financial analysis.

                  The core problem is allowing "unfunded liabilities". What could go wrong? By the way, people make choices of employment based on compensation plus benefits. Poor choices lead to poor results. The employees are not "innocent victims".

                  Comment


                  • #10




                     

                    Also, I am sympathetic to the pensioners who now find themselves short of money and are unable to fund their retirement with the needed cuts. For those in that situation, there is welfare. For the retiree that needs to take a cut in his standard of living, but will be fine financially, I am less sympathetic. It’s called moral hazard. If we bail out pension funds, we set the stage for more future mismanagement as funds will know they can act irresponsibly and be bailed out by Joe taxpayer.

                     
                    Click to expand...


                    I'm sorry, to which programs exactly are you referring?

                    Not weighing in on the pension issue at all, just genuinely curious which gov't programs you think kick in if a pension were to suddenly fail. There is medicare and SS, am I missing something else? Maybe EBT?

                    Comment


                    • #11
                      Not sure what Portlandia is referring to, but the Pension Benefit Guarantee Corporation is specifically meant to address the risk of individual pensions failing.

                      Comment


                      • #12




                        Frustrating to read these types of things because I have mixed emotions about it.  Can’t really blame the workers who in good faith agreed to all of this pension stuff in exchange for worker someplace their entire career.  Are the pensions that poorly managed that they didn’t see this coming?
                        Click to expand...


                        My emotions aren't mixed because I don't think I (the taxpayer) should be on the hook for a promise from a company to an employee. I have that same feeling for government pensions.

                        Comment


                        • #13







                           

                          Also, I am sympathetic to the pensioners who now find themselves short of money and are unable to fund their retirement with the needed cuts. For those in that situation, there is welfare. For the retiree that needs to take a cut in his standard of living, but will be fine financially, I am less sympathetic. It’s called moral hazard. If we bail out pension funds, we set the stage for more future mismanagement as funds will know they can act irresponsibly and be bailed out by Joe taxpayer.

                           
                          Click to expand…


                          I’m sorry, to which programs exactly are you referring?

                          Not weighing in on the pension issue at all, just genuinely curious which gov’t programs you think kick in if a pension were to suddenly fail. There is medicare and SS, am I missing something else? Maybe EBT?
                          Click to expand...


                          Medicaid, SNAP, public housing, etc.

                          https://www.seniorliving.org/research/government-aid/

                          Comment


                          • #14










                             

                            Also, I am sympathetic to the pensioners who now find themselves short of money and are unable to fund their retirement with the needed cuts. For those in that situation, there is welfare. For the retiree that needs to take a cut in his standard of living, but will be fine financially, I am less sympathetic. It’s called moral hazard. If we bail out pension funds, we set the stage for more future mismanagement as funds will know they can act irresponsibly and be bailed out by Joe taxpayer.

                             
                            Click to expand…


                            I’m sorry, to which programs exactly are you referring?

                            Not weighing in on the pension issue at all, just genuinely curious which gov’t programs you think kick in if a pension were to suddenly fail. There is medicare and SS, am I missing something else? Maybe EBT?
                            Click to expand…


                            Medicaid, SNAP, public housing, etc.

                            https://www.seniorliving.org/research/government-aid/
                            Click to expand...


                            Ha. Dude people who worked hard at blue collar jobs for their entire career and then are told to go try to find public housing and get food stamps when their pensions fail are not just going to shrug and take it with an understanding grin.

                             

                             

                            Comment


                            • #15













                               

                              Also, I am sympathetic to the pensioners who now find themselves short of money and are unable to fund their retirement with the needed cuts. For those in that situation, there is welfare. For the retiree that needs to take a cut in his standard of living, but will be fine financially, I am less sympathetic. It’s called moral hazard. If we bail out pension funds, we set the stage for more future mismanagement as funds will know they can act irresponsibly and be bailed out by Joe taxpayer.

                               
                              Click to expand…


                              I’m sorry, to which programs exactly are you referring?

                              Not weighing in on the pension issue at all, just genuinely curious which gov’t programs you think kick in if a pension were to suddenly fail. There is medicare and SS, am I missing something else? Maybe EBT?
                              Click to expand…


                              Medicaid, SNAP, public housing, etc.

                              https://www.seniorliving.org/research/government-aid/
                              Click to expand…


                              Ha. Dude people who worked hard at blue collar jobs for their entire career and then are told to go try to find public housing and get food stamps when their pensions fail are not just going to shrug and take it with an understanding grin.

                               

                               
                              Click to expand...


                              No one is suggesting that solving the pension problem will be painless. The question is who should bear that pain. Should it be the innocent taxpayer? You talk about the hard working blue collar pensioner, and that is fine, but what about the currently employed, hard working and barely-making-ends-meet, blue collar employee? Is it fair that he should have to pay for this pension short fall through a tax payer bailout? If you are not suggesting pensioners take cuts, what is your solution to the crisis?

                               

                              Comment

                              Working...
                              X