Pensions may be cut to 'virtually nothing' for 407,000 people

[haymarket]

you could be right. however, i think that they'll successfully pare down the pensions of a significant percentage of workers; all the while billing the promises of deferred income as "unrealistic" or "unsustainable." hope that you're able to collect yours before the **** hits the fan.

Thank you for that kind thought. I started collecting eleven years ago when I retired from teaching and the Michigan pension system is in good shape and is backed by the State. So I lose little sleep over negative possibilities.

I sincerely hope every retiree gets what what promised to them since you are correct - its merely deferred pay that has already been earned.

 

[David_N]

Government should step in. Problem solved.

 

[cpwill]

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.

If they don't have the money, they don't have the money. Getting mad at reality didn't change anything. As I recall, there is a government reinsurance program that will backstop some of this.

This is why 401(k) options are better. You own them, they are yours, they travel with you, and if the company goes belly up, you're still fine.

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[cpwill]

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

?

Haven't you just created moral hazard, though, by having any private pension backed by government guarantee? What's to stop me from having a pending find that makes ridiculous promises, knowing it will go broke, and then the government will pick up the tab?

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[David_N]

If they don't have the money, they don't have the money. Getting mad at reality didn't change anything. As I recall, there is a government reinsurance program that will backstop some of this.

This is why 401(k) options are better. You own them, they are yours, they travel with you, and if the company goes belly up, you're still find.

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Unless the government simply provides the money.
401k's aren't 100% safe either.

 

[cpwill]

How would one manage a fund that has made promises to 115,000 currently retired folks and has only 155,000 current workers? It is very hard to manage having each retiree supported by the contributions of only 1.3 current workers.

Gosh that sounds familiar. Thank goodness no large, significant, government pension program is facing similar math...

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[David_N]

?

Haven't you just created moral hazard, though, by having any private pension backed by government guarantee? What's to stop me from having a pending find that makes ridiculous promises, knowing it will go broke, and then the government will pick up the tab?

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Hell, might as well argue against the FDIC.

 

[Helix]

If they don't have the money, they don't have the money. Getting mad at reality didn't change anything. As I recall, there is a government reinsurance program that will backstop some of this.

This is why 401(k) options are better. You own them, they are yours, they travel with you, and if the company goes belly up, you're still find.

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too bad. deferred salary is still salary, and the promises made should be guaranteed

 

[David_N]

Gosh that sounds familiar. Thank goodness no large, significant, government pension program is facing similar math...

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The government is a currency issuer. The only actual issue is real resources.

 

[Helix]

?

Haven't you just created moral hazard, though, by having any private pension backed by government guarantee? What's to stop me from having a pending find that makes ridiculous promises, knowing it will go broke, and then the government will pick up the tab?

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risking being seized and liquidated sounds good to me.

 

[cpwill]

Hell, might as well argue against the FDIC.

To get FDIC a bank has to submit to government control, and only deposits under certain amounts are protected. So not quite the same thing.

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[cpwill]

Unless the government simply provides the money.
401k's aren't 100% safe either.

Nothing is 100% safe. That being said, 401(k)s remain the superior option for the reasons listed.

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[cpwill]

risking being seized and liquidated sounds good to me.

Okedoke - take the fund. I can set up funds easy. And I'll continue to attract talent with awesome pensions, knowing that I will never have to pay for them - good old Uncle Sams' taxpayers will.

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[reinoe]

The PBGC is another example of government waste.

 

[ludin]

too bad. deferred salary is still salary, and the promises made should be guaranteed

by the company not the taxpayer. your beef is with a private entity. go complain to them.
no way should taxpayers be required to bail out failed promises by errant and fraudulently ran
pension funds.

 

[ludin]

To get FDIC a bank has to submit to government control, and only deposits under certain amounts are protected. So not quite the same thing.

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FDIC only covers you up to 250k.

 

[ludin]

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.

what law? it is a private company that made the promise. if they can't pay then they can't pay.
they should have managed their pension funds better.

that should not be on the taxpayers to bailout.

 

[cpwill]

FDIC only covers you up to 250k.

Yup. Which is why, as I stated, the moral hazards for truly large sums of money remains less of an issue with FDIC. Nor do savings accounts promise high rates of return based off of market performance.

 

[Southern Dad]

This is why it is important to consider what the pension obligations are doing to a company. When you work decades for a company, simply getting yours and screw the employer sometimes has its consequences. This is likely to happen to many government pensions and private pensions as we go forward. Those high salaries and sweet pension obligations are only good if the government entity or the corporation stay solvent.

 

[David_N]

This is why it is important to consider what the pension obligations are doing to a company. When you work decades for a company, simply getting yours and screw the employer sometimes has its consequences. This is likely to happen to many government pensions and private pensions as we go forward. Those high salaries and sweet pension obligations are only good if the government entity or the corporation stay solvent.

The US government will always be solvent.

 

[Helix]

by the company not the taxpayer. your beef is with a private entity. go complain to them.
no way should taxpayers be required to bail out failed promises by errant and fraudulently ran
pension funds.

with the proper level of regulation, there will be fewer of those by attrition. either way, salary is salary. the alternative is that they could choose to pay their workers more now instead of kicking the can down the road.

 

[Zyphlin]

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.

Agreed. Though such a law can not feasibly be retroactive and tax payers absolutely should not foot the bill.

I frankly have planned my retirement and have gone forward with a mindset that my federal pension is simply not going to be there when I retire. If it is, great; it'll be a bonus. But I fully expect it to not be paid at this point

 

[RetiredNSmilin]

Your retirement years should be of peace, enjoyment, relaxation, and doing crap you have always wanted to do but were limited by work and funds.

Taking up a musical instrument, travelling, starting a herb garden, or just watching the grass grow and knowing you can go out to eat that night without it devastating the budget.

That is what RETIREMENT is supposed to be like.

Those that steal this away from them should be hanged.

 

[Helix]

Agreed. Though such a law can not feasibly be retroactive and tax payers absolutely should not foot the bill.

I frankly have planned my retirement and have gone forward with a mindset that my federal pension is simply not going to be there when I retire. If it is, great; it'll be a bonus. But I fully expect it to not be paid at this point

yeah, i'm approaching that attitude with my state pension, unfortunately. i'm in a public employees retirement fund with the teachers, and public schools are not very popular inside our statehouse.

 

[ludin]

with the proper level of regulation, there will be fewer of those by attrition. either way, salary is salary. the alternative is that they could choose to pay their workers more now instead of kicking the can down the road.

which has nothing to do with taxpayers bailing them out.
again your complaint is with a private company that couldn't make the promises
that they made. the fund was corrupted and abused and now it can't pay.

I don't see how this is a taxpayer problem nor should it be.

the company if still around needs to liquidate then and the holders of the pensions need to file
for higher status in the bankruptcy court. this isn't a taxpayer issue.