Shades Of Things To Come: The Check Is Not In The Mail

Discussion in 'Economy' started by Madeline, Aug 10, 2010.

  1. Madeline
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    Madeline BANNED

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  2. Pepe
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    Pepe Senior Member

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    Good post.

    Most knowledgeable folks have understood that State and Local Pension Fund Managers have been grossly overestimating "returns on investments" and underestimating "liabilities."

    Hence the calls by SEIU and the others for "Guarantees" by the State(s) of these Obligations.

    In the current financial climate, I can't fathom any State or Local Gov't foregoing all Fiduciary Responsibilities save pay its Pensions.

    Not going to happen.

    I have often stated the worst is yet to come.

    What the average Sheeple is witnessing is the tip of the financial iceberg.
     
  3. Barb
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    Barb Carpe Scrotum

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    That's simply shameful, to get the lawyers to weasel up an out. :evil:
     
  4. topspin
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    topspin BANNED

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    I agree and even corp managers can over estimate returns etc.
    Which is why I'm likely to take a lumb sum vs letting them manage my pension money.
     
  5. The Rabbi
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    The Rabbi Diamond Member

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    Which is what they get paid for.

    There is a move afoot in CA to make pension obligations enforceable even when the municipality files bankruptcy. That would be an unprecedented move on property rights and the rule of law.
     
  6. goldcatt
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    goldcatt Catch me if you can! Supporting Member

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    This has been coming for a long time. On one hand, if there's no money there's no money. Can't get blood from a stone. But on the other hand, these are benefits the employees worked for, earned and reasonably planned their retirement around. Reducing them will leave a lot of people high and dry who had every right to count on them. There's no easy answer.
     
  7. The Rabbi
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    The Rabbi Diamond Member

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    Nothing is risk free. Life isn't risk free. Pensions are certainly not risk free. It sucks, but tell that to the people who worked for Enron and lost all their retirement money when that fell apart.
     
  8. Baruch Menachem
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    Baruch Menachem '

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    California can't change the bankruptcy rules on the pensions. Bankruptcy is totally a federal matter.

    What can the Illinois state workers do? In GM's case, the pensioners were first in line at the bankruptcy, and after the reorganization the pension plan got the lions share of the equity. What assets does Illinois have that the pensioners can attach? The jails?
     
  9. goldcatt
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    goldcatt Catch me if you can! Supporting Member

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    That's certainly one argument. But on the other hand people who work for State and Local government (usually anyway) take anywhere from 20 - 40% less pay, depending on where they work and the job they're doing, than those doing comparable work in the private sector. In a few positions the disparity can be even greater, such as a public defender vs. a defense attorney in private practice.

    Oh, I know there are the exceptions and horror stories, but for the most part those benefits are to make up for the lower salaries. Who would take some of these positions without some sort of equalizer? Competent professionals? And more to the point, is it their fault the States misjudged their returns?

    I'm not completely unsympathetic, but there are two sides to the story here.
     
  10. Madeline
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    Madeline BANNED

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    But the gap is so ginormous, goldcatt. Illinois' annual revenues are projected to run around $20 Billion. The shortfall in funding its pension is estimated at $200 Billion. See the problem?

    Virtually every state and local pension is in the same boat. Personally, I think these pension funds should be converted to individual accounts, like 401(k)'s, and people paid whatever there is to pay....which in the case of Illinios appears to be almost nothing.

    I also think some people need to go to prison. Someone has been signing off on these funding levels as adequate. Time for the signatures they've been so richly paid for to matter, and legal liability to arise.
     

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