• This is a political forum that is non-biased/non-partisan and treats every persons position on topics equally. This debate forum is not aligned to any political party. In today's politics, many ideas are split between and even within all the political parties. Often we find ourselves agreeing on one platform but some topics break our mold. We are here to discuss them in a civil political debate. If this is your first visit to our political forums, be sure to check out the RULES. Registering for debate politics is necessary before posting. Register today to participate - it's free!

Detroit's Recovery Plan Dips into Pensions to Keep City Afloat

Joined
Apr 17, 2013
Messages
88
Reaction score
45
Gender
Undisclosed
Political Leaning
Undisclosed
Detroit

Coincidence that another liberal paradise of oversized promises and good intentions is going awry? I think the solution is to *obviously* give the political class more power so they can legislate Detroit back to prosperity!

No Refuge

Union battles have played a role in three of the four biggest municipal bankruptcies filed since 2008. That year, Vallejo sought court protection after unions rejected wage cuts.
The onetime U.S. Navy town of about 120,000 on San Francisco Bay imposed new contracts on workers, cut its police force and eliminated medical benefits for retirees.
Last year, Stockton and San Bernardino in California filed bankruptcy, citing pension and other labor costs. Both cities have demanded that workers pay more toward their pensions.
“Bankruptcy has not been a panacea for labor unions,” Ron M. Oliner, a lawyer who represented the police union in Vallejo. “It is hard to fathom a circumstance where Detroit’s unions would not want to negotiate in an effort to avoid a filing if possible.”
Milewski, the firefighter, said the city should take care of those who sacrificed for it.
“For years we kept saying they can’t, they can’t, there’s no way they can cut us as retirees, and take away money these guys earned in a career,” Milewski said. “It’s so disheartening, and not just in my situation, where I lost the use of my legs in the line of duty.”
 

Fisher

DP Veteran
Joined
Sep 18, 2012
Messages
17,002
Reaction score
6,913
Gender
Male
Political Leaning
Very Liberal
Well pension plans need to be replaced with IRA's everywhere. They have proven themselves repeatedly to be the bane of our existence from the USPS down.
 

American

Bier Meister
Bartender
Supporting Member
Monthly Subscriber
DP Veteran
Joined
Mar 11, 2006
Messages
89,254
Reaction score
28,250
Location
SE Virginia
Gender
Male
Political Leaning
Conservative
Well pension plans need to be replaced with IRA's everywhere. They have proven themselves repeatedly to be the bane of our existence from the USPS down.

Except for the fact that they're already paid for by the workers.
 

Fisher

DP Veteran
Joined
Sep 18, 2012
Messages
17,002
Reaction score
6,913
Gender
Male
Political Leaning
Very Liberal
Except for the fact that they're already paid for by the workers.

No they are not--not until the person has actually retired. IRA's are paid for by the workers as they go. Pension plans require additional and unending contributions by the employer which is why they fail and end up being put in the hands of some place like State Street that pays them out based upon existing contributions, shafting people who have yet to retire.
 

Erod

DP Veteran
Joined
Aug 28, 2008
Messages
15,357
Reaction score
8,099
Location
North Texas
Gender
Undisclosed
Political Leaning
Conservative

Fishstyx

DP Veteran
Joined
Sep 13, 2011
Messages
1,527
Reaction score
765
Gender
Male
Political Leaning
Independent
Except for the fact that they're already paid for by the workers.

Detroit's pension plan allows for 0-7% contribution which is actually maintained separately from the normal retirement benefit plan. Would be interesting to see what the average employee contribution is.
 

fmw

DP Veteran
Joined
Feb 2, 2013
Messages
12,361
Reaction score
3,358
Gender
Male
Political Leaning
Libertarian
Governments simply need to stop making promises without funding them in advance. They are like a spendthrift with a wallet full of credit cards.
 

LowDown

Curmudgeon
Supporting Member
DP Veteran
Joined
Jul 19, 2012
Messages
14,185
Reaction score
8,767
Location
Houston
Gender
Male
Political Leaning
Libertarian
Except for the fact that they're already paid for by the workers.

Nope, in many cases not. They were promised a certain level of benefits, and the money they paid in often didn't even come close to covering the cost of the benefits. In other cases the company or union, whoever was managing the pension fund, screwed that up or the economy just went south and nobody could help it. In any case, those benefits were not covered by the funds available. Ipso facto, somebody ends up holding the bag, and the cities don't have the money either, nor can they expect to get it from their declining tax base. This is often exacerbated by the fact that the benefits were way too generous to begin with, often at levels that no one could reasonably expect to be able to pay.

No matter which way you cut it, defined benefit plans are often untenable. Defined contribution plans are the way to go from now on.
 
Top Bottom