Public pensions under pressure

Public pensions under pressure

There are 39 comments on the TwinCities.com story from Aug 12, 2009, titled Public pensions under pressure. In it, TwinCities.com reports that:

Retirement has taken a hit as the stock market has suffered. The average 401K account fell 27 percent in calendar year 2008.

Join the discussion below, or Read more at TwinCities.com.

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Outofcontrol

Findlay, OH

#1 Aug 13, 2009
Public pensions are out of control. Anything to limit the payouts and elgibility is welcome.
john a

Hoffman, MN

#2 Aug 13, 2009
i have read an analysis of the above mentioned higher payout
distortion in the teacher pension(forwarded a copy to a state senator in
district i used to live) and most basically a change was made 10 years ago or
so that in high pension earnings years an increased payout would occur but
in low or negative pension earning years a reduction in payout would not occur.
this should have been left alone but since it was not teachers themselves
(especially younger ones) have to get on board to rectify this situation for
their own pension fund security.
Catcher InTheRye

Saint Paul, MN

#3 Aug 13, 2009
Yes and the MN Teacher's retirement are going to wait until the current Governor leaves office and then ask the stupid legislature to make up the stock market losses!
Jean Francois de Kerry

Minneapolis, MN

#4 Aug 13, 2009
This is the next financial train wreck in the offing.
smith_st_guy

United States

#5 Aug 13, 2009
Public employee pensions are a timebomb ticking under the taxpayers beds. It is long past time to move these folks to self-administered retirement accounts.....you know, like the rest of the country has.
Bike Bubba

United States

#6 Aug 13, 2009
Sad that we do not have our previous Secretary of State, who revealed to the world that pension plans were all too often concluded without actually consuting an actuary to calculate its likely cost.

Reality here is that awarding benefits without calculating the cost DOES establish benefits at too high a point. While we need to honor our contracts, we also need to require that any defined benefit pension plan have annual actuarial reviews--if not to consider eliminating pensions altogether (in favor of 401Ks and such) for government employees. The ugly reality (see Social Security and Medicare) is that even the best defined and most highly analyzed plans tend to change the actuarial assumptions by their very existence. Far better to let people plan for themselves.
Not Our Plan

Minneapolis, MN

#7 Aug 13, 2009
We taxpayers have nothing like this to retire to, nothing. We just pay the bill, no thanks given to us, while the govt gets to retire at an earlier age, with our tax dollars. It's incredible but the mess that is about to unload on this system will drive all the states into the toilet for a long time to come. And that's the truth. Look at what our legislators did for teachers???? Yes they passed a bill that allows the school districts to go directly to our property taxes to TAKE our money to fund shortfalls in these retirement programs. Think I'm kidding? Nope, it is there and we didn't even get to vote on it. We are being duped and taxed to death already and you knuckleheads think we should go to nationalized healthcare? Are you kidding me, govt needs to get smaller NOT bigger.
Red Ryder

Monroe, LA

#8 Aug 13, 2009
Job Growth Lacking in the Private Sector (over the last decade)


http://www.nytimes.com/2009/08/08/business/ec...


FOR the first time since the Depression, the American economy has added virtually no jobs in the private sector over a 10-year period. The total number of jobs has grown a bit, but that is only because of government hiring.

The accompanying charts show the job performance from July 1999, when the economy was booming and companies were complaining about how hard it was to find workers, through July of this year, when the economy was mired in the deepest and longest recession since World War II. For the decade, there was a net gain of 121,000 private sector jobs, according to the survey of employers conducted each month by the Bureau of Labor Statistics. In an economy with 109 million such jobs, that indicated an annual growth rate for the 10 years of 0.01 percent.

Until the current downturn, the long-term annual growth rate for private sector jobs had not dipped below 1 percent since the early 1960s. Most often, the rate was well above that.

As can be seen from the charts, there were some areas of strength in the economy. Health care jobs continued to grow, particularly jobs that involve caring for the elderly. Home health care employment rose at an annual rate of 5 percent, a rate that indicates a total gain of more than 60 percent. On an annual basis, that was twice the overall rate for health care of 2.4 percent a year.

There were also job gains in education and in a host of service industries, including lawyers (0.7 percent a year), accountants (0.9 percent) and computer systems designers (2.4 percent). The field of management and technical consulting leaped at an annual rate of 5 percent.

(Excerpt) Read more at nytimes.com ...

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This should come as no surprise. The government and many citizens think the private sector is ‘evil’. Greedy, selfish and whatever. The problem is the private sector creates new businesses, creates new jobs, and pays taxes. The government creates nothing. It is a parasite and lives off the private sectors profits. The very sector it is, along with many envious and jealous citizens, trying its very best to destroy. And when it does, all but those few in power and control, will live in misery. That should make everyone happy. Especially the politicians.


Despite budget cuts and layoff warnings, California still hiring and workforce still growing

http://www.sacbee.com/politics/story/2094403....
tww

Minneapolis, MN

#9 Aug 13, 2009
Sounds like they should sue the plan administrators for negliegence. Why should the tax payer pick-up the bill for this? No one is covering my 401k losses.
Bike Bubba

United States

#10 Aug 13, 2009
The plan administrators are public employees, too. So the taxpayer takes it in the shorts either way. Better just to phase out public pensions over time.

Since: Mar 09

Location hidden

#13 Aug 13, 2009
here is the next bail-out. this time at the state level. time to open those Swiss bank accounts.
Red Ryder

Minneapolis, MN

#14 Aug 13, 2009
Bike Bubba wrote:
The plan administrators are public employees, too. So the taxpayer takes it in the shorts either way. Better just to phase out public pensions over time.
LA Times: Amid Cost Cutting, Los Angeles
City Pensions Continue to Soar

http://www.fundmymutualfund.com/2009/08/la-ti...

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See links to this and previous newsclips at www.PensionTsunami.com
----------
FACT is the Fullerton Association of Concerned Taxpayers. FACT's
primary focus is on California's public employee pension crisis, but
we are also attempting to monitor developments in all three pension
spheres -- public employees, corporations and social security -- since
it is taxpayers who will ultimately be responsible for making up
deficits incurred by any of them. We also try to monitor international
trends. New subscribers are welcome. To subscribe, simply send a blank
message to PensionWatch-Subscribe@Pension Tsunami.com . TO UNSUBSCRIBE,
send a blank message to PensionWatch-Unsubscribe@Pensi onTsunami.com .
----------
http://moneywatch.bnet.com/retirement-plannin...

CBS MoneyWatch
July 21, 2009

Public Pension Rip Off: Will It Hurt You?

By Charlie Farrell

The Wall Street Journal ran a great article yesterday on what I
would consider a major problem for public pensions, and it's called
spiking. Spiking occurs when a public employee substantially
increases his or her pay in the year or two prior to retirement

http://online.wsj.com/article/SB1248040478280...
for the
purpose of locking in a higher pension payment. If you're a public
employee, particularly a younger employee, this practice may
jeopardize the security of your pension.

How does spiking work?

* Let's say you're a public employee, you make $125,000 a year, and
you intend to retire in two years.

* Essentially, you work through various loopholes in the
compensation system to bump your pay to say $175,000 in your final
year.

* Then you use that $175,000 as a basis for your pension
calculation, which has the effect of substantially increasing your
lifetime pension payments.

Sounds like a great deal. I mean who wouldn't want to do that? The
problem is that it undermines the funding legitimacy of the entire
system and puts the pensions of other hard working public employees
at risk.

Why? Because when someone spikes their benefit, the pension system
most likely has not received enough contributions during that
person's working career to support that benefit.
More Info

Ashburn, VA

#15 Aug 13, 2009
"A healthy Minnesota depends on a healthy public retirement system. Those pensioners worked hard for their benefits and the systems must remain secure. The benefits are not over-generous and they are taxable."

1. Correction "A healthy Minnesota depends on a healthy PRIVATE sector retirement system." Without a private sector, there is no public sector revenue.

2. Whether "benefits are are not over-generous" is debatable.

3. Public sector retirement incomes, like private sector retirement incomes, are not taxable by the state of Minnesota if the retiree moves out of Minnesota and becomes a resident of another state.
Peter

Houston, TX

#16 Aug 13, 2009
This a giant scandal. Early retirements and guarantees for life. And with the market off so much and everyone's retirement security impaired, the unions are jamming it to us again driving tax increases to keep their retirement security from being touched. How about this: You get paid for your job. If you're looking to be adopted for life, government's no longer in that business. Taxpayers are on their own, it's high time that government employees do the same.
TaxTaxTax

Anoka, MN

#17 Aug 13, 2009
Under pressure? Good! Couldn't have happened to a lazier bunch of union thugs!
gbloom

Laporte, MN

#18 Aug 14, 2009
Government does nothing? next time you need emergency medical care, take care of it yourself, don't call the fire department, police department or fire department ambulance. Next time someone forces their way into your house to rob you and terrorize your family- take care of it yourself, don't call the Police. Next time there is a blizzard or ice storm creating snow plugged or icy roads- take care of it yourself, don't expect your city, county or state highway department to plow or salt the roads. Lastly, make certain that you teach your own children how to read, write, use complex mathematical formulas etc. don't depend upon the public education system.

Lastly , to the person who is upset that they do not have a pension like public employees. Tough, you chose to take higher pay and work in the private sector . It is not our fault that you were suckered into believing that you should fund most of your own retirement pension by investing on the stock market, ignoring what has happened over and over in the past history of the market.
We have a pension-it is not huge but we earned it.
Red Ryder

Minneapolis, MN

#19 Aug 14, 2009
gbloom wrote:
Government does nothing? next time you need emergency medical care, take care of it yourself, don't call the fire department, police department or fire department ambulance. Next time someone forces their way into your house to rob you and terrorize your family- take care of it yourself, don't call the Police. Next time there is a blizzard or ice storm creating snow plugged or icy roads- take care of it yourself, don't expect your city, county or state highway department to plow or salt the roads. Lastly, make certain that you teach your own children how to read, write, use complex mathematical formulas etc. don't depend upon the public education system.
Lastly , to the person who is upset that they do not have a pension like public employees. Tough, you chose to take higher pay and work in the private sector . It is not our fault that you were suckered into believing that you should fund most of your own retirement pension by investing on the stock market, ignoring what has happened over and over in the past history of the market.
We have a pension-it is not huge but we earned it.
try again...

Detroit: The Triumph of Progressive Public Policy

http://www.mackinac.org/article.aspx...

Imagine a city where all the major economic planks of the statist or "progressive" platform have been enacted:

* A "living wage" ordinance, far above the federal minimum wage, for all public employees and private contractors.

* A school system that spends significantly more per pupil than the national average.

* A powerful school employee union that militantly defends the exceptional pay, benefits and job security it has won for its members.

* A powerful government employee union that does the same for its members.

* A tax system that aggressively redistributes income from businesses and the wealthy to the poor and to government bureaucracies.

Would this be a shining city on a hill, exciting the admiration of all? We don't have to guess, because there is such a city right here in our state: Detroit

Detroit has been dubbed "the most liberal city in America" and each of these "progressive" policies are alive and well there. How have they worked out?

In 1950, Detroit was the wealthiest city in America on a per capita income basis. Today, the Census Bureau reports that it is the nation's 2nd poorest major city, just "edging out" Cleveland.

Could it be pure coincidence that the decline occurred over the same period in which union power, the city government bureaucracy, taxes and business regulations all multiplied? While correlation is not causation, it is striking that the decline in per capita income is exactly what classical economists predict would occur when wage controls are imposed and taxes are increased.
stacy

Bayside, NY

#20 Aug 14, 2009
Public pensions have become PONZI schemes with the taxpayer (who is not necessarily a public pensioner) footing the bill.

When does the average taxpayer get to join in on this Ponzi scheme?
Not Funny

Newark, NJ

#21 Aug 14, 2009
You better leave this state soon ... rumors abound of a new law ... charging each family that leaves a proportionate share of the enormous pension and healthcare shortfall .... before you can legally go !
URFunny

Circle Pines, MN

#22 Aug 14, 2009
I wonder what would happen if you pulled 2 Billion dollars out of the State economy right about now. Public pension pump that amount each year into our state economy.

I've seen both sides of the coin. Private and Public. From what I can tell not many of you can say that. Ask your employer why he/she pulled your pension plan. Mine did to save money. Funny!

Next you clowns will want Social Security privatized.

I also laugh at the retire early part. If you want to live off a couple hundred a month....be my guest. Unless you are a cop. Hear a story or two from one of those guys and you'd understand early retirement. Those guys earn every penny.

A couple of cents out of every dollar goes to funding a public pension. If you knew where the rest went you'd be twice as pissed.

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