One of the biggest private pension funds in the country is almost out of money, and fresh out of options.
The Central States Pension Fund has no new plan to avoid insolvency, fund director Thomas Nyhan said this week. Without government funding, the fund will run out of money in 10 years, he said.
At that time, pension benefits for about 407,000 people could be reduced to "virtually nothing," he told workers and retirees in a letter sent Friday.
In a last-ditch effort, the Central States Pension Plan sought government approval to partially reduce the pensions of 115,000 retirees and the future benefits for 155,000 current workers. The proposed cuts were steep, as much as 60% for some, but it wasn't enough. Earlier this month, the Treasury Department rejected the plan because it found that it would not actually head off insolvency.
Failing Central States Pension Fund is out of options - May. 20, 2016
this kind of thing makes me sick. a pension is deferred salary, and should be guaranteed as such by law. if a place i used to work at goes tits up, they can't send me a letter demanding that i return some of my 2005 salary. salary in the form of a pension should be protected in the same way. once that promise is made, it should be guaranteed by law.
this kind of thing makes me sick. a pension is deferred salary, and should be guaranteed as such by law. if a place i used to work at goes tits up, they can't send me a letter demanding that i return some of my 2005 salary. salary in the form of a pension should be protected in the same way. once that promise is made, it should be guaranteed by law.
That "same way" would be to place real funds (at least anually) into each employee's self-directed retiirement account. The artcle notes that the scheme now used is to add $1 to the common fund for each $3 paid out - that madness should not be taxpayer supported.
I'm guessing the people who mismanaged the fund are fully covered for retirement.
I'm guessing the people who mismanaged the fund are fully covered for retirement.
this kind of thing makes me sick. a pension is deferred salary, and should be guaranteed as such by law. if a place i used to work at goes tits up, they can't send me a letter demanding that i return some of my 2005 salary. salary in the form of a pension should be protected in the same way. once that promise is made, it should be guaranteed by law.
here's one way to address it :
1. oversight of the promises made to workers before they're made.
2. the pension will be treated by law as the deferred salary that it is.
3. if the pension fund goes broke, it is seized and dissolved, and a public fund makes up the difference.
that would be pretty good motivation for the private funds to not do stupid things. as for the state pension funds, they need a lot more federal oversight, but the guarantee should be the same. i worked a public research job for years, and it generally paid me $10 - $15k a year less than what i should have been making. the pension was good, though. my salary in the form of pension should be protected by law, as i already earned it.
I fully agree. In fact, let me say this, I worked 33 years to accumulate my pension and it is backed by the State of Michigan. If anyone attempted to steal that from me - what is mine by promise and by law - I would treat them exactly the same way I would treat a person who came into my house and attempted to take my property that I had worked hard for and owned by law.
legislators and governors included.
We call that government provided retirement system Social Security.
this kind of thing makes me sick. a pension is deferred salary, and should be guaranteed as such by law. if a place i used to work at goes tits up, they can't send me a letter demanding that i return some of my 2005 salary. salary in the form of a pension should be protected in the same way. once that promise is made, it should be guaranteed by law.
this kind of thing makes me sick. a pension is deferred salary, and should be guaranteed as such by law. if a place i used to work at goes tits up, they can't send me a letter demanding that i return some of my 2005 salary. salary in the form of a pension should be protected in the same way. once that promise is made, it should be guaranteed by law.
It sounds like we have multiple problems to contend with here.
Right off Central States Pension Fund is a private entity, so to guarantee by law the benefits inherently means putting the tax payer on the hook for fund mismanagement. Moreover, if this line of thinking is applied to this fund then we open the door for all private pension fund plans to be guaranteed (thus benefit set by some math.) As the article points out there already is a government ran (authorized) insurance mechanism for these pension funds on the tax payer dime, but that is also about to run out of funding as the math to support that fund does not match its usage. It is also based on case to case evaluation.
Sander's "Keep Our Pension Promises Act" did not make it out of committee as it directly impacted Republican plans on dealing with this very issue mainly by ignoring it. The other problem with the proposal is no where in the document was a 1 to 1 relation on benefits matching from a failed private plan to the government insurance back up plan, it ends up being some negotiated amount. Either way, the pensioner still losses and the US tax payer picks up the tab.
What we really need to be talking about is not this one private plan doomed to fail, we should be talking about if this nation should have a properly funded insurance plan to cover any and all private pension plan promises? And if so, what is the likely impact on private companies mismanaging and under-funding their own pension plans knowing that eventually the government would pick up the difference?
We risk more system dependency and liability shift onto the US tax payer, this time purposefully.
the 1:1 guarantee should be made, IMO, and pension companies that try to milk the system and then go bankrupt should be seized and liquidated as a condition of taxpayer bailouts. similarly, the TBTF banks should have been broken up as a condition of the bailout.
I understand the sentiment, but we need to be practical. A couple of points in no particular order since we are mixing subjects...
It would be reasonable to have a pension insurance plan structured through the government were participating companies and organizations agreed to conditions, namely what you are saying about abuse of the system meaning a seize of assets to offset government plan losses. But, I still suspect the strain will be on the plan itself. All the evidence is there, the insurance plan as it stands today is not 1:1 relational and it is running out of cash itself. Further, just about all government ran plans and funds end up with liability deferred where present movement of income ends up in the general ledger. I see us increasing intergovernmental debt as a result of a guaranteed 1:1 government backed pension insurance plan, as more private pension plans will end up in the mix, and ultimately it will all end up ran like the Social Security Trust Fund.
The bank "bailouts" are more complicated, and I wish you had not brought that up. At the time of the financial collapse the Treasury, and the Fed, and various state agencies were appealing to various banks to buy up troubled investment firms and holders of these complex debt based investment vehicles. Only to turn around and see the Justice Department extract fees and penalties from those larger banking groups left standing. Before we even got to the idea of "too big to fail" ending up in legislation, we made a few of them too big to fail from our own government involved activities just to find an economic floor to the free fall we were experiencing. This is much bigger than the right hand not knowing what the left hand is doing.
o turn around and break up the large banks now would mean allocation of assets and liabilities onto multiple entities. Technically the government has not done this yet because no one is really sure how to do it. The Dodd–Frank Act ended up creating an adversarial condition between Fed monetary policy controls as it relates to bank health and Congressional power to deal with the same banks and worse created an adversarial condition of cost of compliance with the Act between small and regional banks vs. the big national banks. Breaking up a bank means added costs to whatever entities end up created. The whole thing is dubious as no one is certain the impact on the financial system of a bank going through that sort of structural change.
Lastly, "too big to fail" ended up aimed at more than banks. And we ended up with big problems looking at how to apply the thinking to insurance companies, investment firms, the Auto Industry, etc. It is one of those things that sounds good politically but the details leave us with little to be desired. Speaking of bankruptcy, the government has already shown a propensity to step in and negotiate unorthodox deals that in some ways also empower the very too big to fail mentality we claim the government stands against. Think how Fiat ended up owning Chrysler, Dodge and Jeep.
the problem is that there are insufficient legal recourses for the average worker by that point.
You are 100% correct in the above.Edit to my post above: Some who mismanaged the fund are dead as in murdered: Jimmy Hoffman and "Red Dorfman", to name two. After quick research I see that unfortunately for many of the people in the CSPF are screwed because of organized crime's deep involvement in the fund. That doesn't mean in any way that most of the people who are covered by the retirement fund are connected to the mob. They aren't, they had little choice in the matter and likely most had no idea that they were getting royally screwed while pension fund money went elsewhere and never came back.
that is very true. Which is why, in the end, more direct action may be the only recourse to send a strong message.
Not to get too far off-track, but while I'm glad you got on your feet personally, what did the country and society as a whole possibly lose?meh. the "direct action" i support is a resurgence of unions. if they remain in control, the Republicans in my state will almost certainly screw me out of some (hopefully not most) of my public employee pension while letting some private entity skim off of the top. that's what they do. i'm not going to do anything stupid when that happens, though. mostly, i have written it off, and whatever percentage of it that i get, i'll consider it a net gain in this current labor environment. i have a decent job in industry now, and i'm going to try to work my way up. the part that sucks is that the research we were doing was important at a fundamental level, but the sequester really tightened the NIH's belt. again, though, oh well. i landed on my feet, and thank God for that.
meh. the "direct action" i support is a resurgence of unions. if they remain in control, the Republicans in my state will almost certainly screw me out of some (hopefully not most) of my public employee pension while letting some private entity skim off of the top. that's what they do. i'm not going to do anything stupid when that happens, though. mostly, i have written it off, and whatever percentage of it that i get, i'll consider it a net gain in this current labor environment. i have a decent job in industry now, and i'm going to try to work my way up. the part that sucks is that the research we were doing was important at a fundamental level, but the sequester really tightened the NIH's belt. again, though, oh well. i landed on my feet, and thank God for that.
Not to get too far off-track, but while I'm glad you got on your feet personally, what did the country and society as a whole possibly lose?
Speaking as a technologist rather than a health scientist, pure and non-profit research is an important quantity. Many important technologies were advanced or fell out of the 'race for space' in the '60's, for instance.
If research is limited to only that applied to for-profit applications, we are sorrily limiting our potential as a nation and indeed as a civilization!
Oh - I fully agree that a resurgence of union is what is needed. All I am saying is that every politician in every legislature in America should have it imprinted on their brain that if they ever attempt to steal the pensions of people - its not going to be pretty. I worked for the legislature for three years and believe me - none outhouse guys is going risk life and limb for some cause.
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?
We use cookies and similar technologies for the following purposes:
Do you accept cookies and these technologies?