Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-12-2011, 07:42 PM   #21
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,260
Quote:
Originally Posted by donheff View Post
Apologies for my ranting. ....
IMO, no apology needed. These are issues where injustices are going to get us worked up. And it's not really a 'rant' since you are providing references, not just bellyaching (assuming the ref is credible, which I don't know for certain, but will take at face value for now).

But I was starting to wonder, what does this have to do with the OP subject of municipal pensions in Illinois? It's not like 2 wrongs make a right.


And I do wonder, are the problems in the private sector as bad (in total magnitude) as those in the public? While the OP highlighted some extreme and relatively rare occurrences, 'spiking' in general is a very wide-spread problem. But I don't have any numbers at hand for now, just asking the question.

Quote:
How these management dogs ripped of American workers is so despicable ...
And there are people who wonder that about some too-powerful Unions also.

Quote:
I welcome the more cool headed on the forum to read this book and then inform me of how it is not accurate.
I hope someone does, I assume I'm excluded?

Quote:
Originally Posted by donheff View Post
There is a whole consulting industry available to show corporate execs how to play the system so they can remain "legal" or close enough to legal to profit from these despicable practices.
This is exactly why I'd like to see all the pensions and other 'promises' done away with (private and public). I'm not knocking politicians when I say this (for once), it's just the nature of how things get done, but the fact is that a consulting industry and corporate execs are going to be able to run circles around any laws. It just takes too long to get things through Congress, those firms can move faster, and respond to change faster.

Put some % of salary in a fund with my name on it, let me decide what to do with it, and no corporate raider can take it from me.

-ERD50
__________________

__________________
ERD50 is online now   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-12-2011, 10:25 PM   #22
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by ERD50 View Post
This is exactly why I'd like to see all the pensions and other 'promises' done away with (private and public). I'm not knocking politicians when I say this (for once), it's just the nature of how things get done, but the fact is that a consulting industry and corporate execs are going to be able to run circles around any laws.
ERD50,

In Illinois, converting public DBP pensions to 401k-like products will eventually be necessary. The concept of "playing the system" and actual outright corruption is so common and so accepted, it is actually embedded in our culture. It's the way we are. And here in Illinois, they're cheered and admired for their skill and cunning at playing the game. It's only a few downstate hicks and outsiders that are outraged........

Despite recent legislation which limits spiking, public employee unions are already collaborating with state legislators to establish work-arounds. And, of course, it goes far beyond unionized employees as evidenced by the characters in OP's article.

Veteran employees are currently in an uproar. Yes, they can retire with their "promised" pensions. But the tacit, yet always expected, 20% - 50% extra from spiking is being limited.

I have to admit, the way these 2 guys, and the head of the pension board, worked the spiking game is clever and somewhat unique. The con artists are getting smarter and the con games more sophisticated.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 02:02 AM   #23
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
clifp's Avatar
 
Join Date: Oct 2006
Posts: 7,450
Don

I checked out the book reviews on Amazons. The fact that it was WSJ reporter and not a Rolling Stones or Mother Jones reporter gives some credibility to your outrages. I'll put on my library list although I suspect that it will be a while before I get my hands on it. It appears from the reviews that there is another side to story. I certainly have followed the story of pension plan raid for a number of decades. It has been a stable trick of corporate raider that after conducting a leveraged buy out, to sell off any excess pensions funds. To the extent that saddled the public via the PBGG I am outraged.

However the reason I am not as outraged as I am with union boss collecting outrageous pension is the following.
  • For the most part this is old news starting in the mid 80s peaking in the mid 90s and I guess continuing in the the early 2000 corporations have been replaced defined benefits with defined contributions. I suspect 90% of the time the workers got screwed. This has all been reported on for a long time in many cases in the WSJ.
  • I fundamentally believe that concept of working for 30 years for an employer (public or private) and having them primarily responsible for a persons retirement regardless of companies or countries economic condition is horrible and dangerous idea which will make American companies and workers uncompetitive with the rest of the world. To the extent that greedy management hasten the demise of DB plans I am happy they did it.
  • I expect corporation management to look out for their and the shareholders interests. At least in Silicon Valley expensive retirement plans were not a good recruitment or even retention tool, almost all the folks I worked with and interviewed preferred higher salary or more stock, or other benefits. So I can make a pretty strong case that ditching these plans were in the shareholder interests. Now it sucks that in many cases the main beneficiaries were folks in the C-suite and corporate raiders rather than shareholders. However, as shareholder I am pretty sure that I benefited from the lower retirement cost American companies now have from these tricks. I may not feel great about enriching myself at the expense of American workers losing retirement benefits, but hey I'm just a passive owner.
  • In contrast I have gain nothing from these union pension tricks. In an ideal world I expect politicians to put the public needs first. In the real world I am ok with politicians doing things that help them get relected and also help the public. I'll tolerate them doing things that help themselves as long as the don't hurt the public. But I draw the line at doing stuff the helps themselves and screws the public. This union trick is so far over the line it should be criminal or at the very least confined to IL and LA.
__________________
clifp is offline   Reply With Quote
Old 10-13-2011, 06:11 AM   #24
Thinks s/he gets paid by the post
obgyn65's Avatar
 
Join Date: Sep 2010
Location: midwestern city
Posts: 4,061
Where were the auditors ?
Quote:
Originally Posted by youbet View Post
I have to admit, the way these 2 guys, and the head of the pension board, worked the spiking game is clever and somewhat unique. The con artists are getting smarter and the con games more sophisticated.
__________________
Very conservative with investments. Not ER'd yet, 48 years old. Please do not take anything I write or imply as legal, financial or medical advice directed to you. Contact your own financial advisor, healthcare provider, or attorney for financial, medical and legal advice.
obgyn65 is offline   Reply With Quote
Old 10-13-2011, 06:59 AM   #25
Thinks s/he gets paid by the post
Tadpole's Avatar
 
Join Date: Jul 2004
Posts: 1,169
One of the problems I note in the entire debate is that somehow people latch onto a few individual cases of people that were in a position to game a pension system. This seems to get applied to all pensions of the rank and file who are not in a position to game anything. It is not as often that the story that goes rabid is one about people having the rug pulled out from under them with pensions that would have been rather modest and hard earned. What is creepy is that one starts getting the similar questions about ways people's private retirement savings are decreased in potential value by forces larger than themselves like the zero return for years on simple savings accounts. No place to hide? No way to win? Sometimes I think I will see a giant clawback of any wages that were not spent as they were earned. (Just a paranoid thought.)
__________________
Tadpole is offline   Reply With Quote
Old 10-13-2011, 08:16 AM   #26
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,260
Quote:
Originally Posted by clifp View Post
Don

I checked out the book reviews on Amazons. The fact that it was WSJ reporter and not a Rolling Stones or Mother Jones reporter gives some credibility to your outrages. I'll put on my library list although I suspect that it will be a while before I get my hands on it. It appears from the reviews that there is another side to story. ...
I look forward to your cool-headed review.


Quote:
This union trick is so far over the line it should be criminal or at the very least confined to IL and LA.
Thanks for putting it in perspective! Dang, that is bad!


Quote:
Originally Posted by obgyn65 View Post
Where were the auditors ?
You may have missed my quote in post #2 - this was made legal -

Quote:
Gannon, former president of the Chicago Federation of Labor, was able to take a long leave from a city job to work for a union and then receive a city pension based on a high union salary. That arrangement is allowed under a state law signed by Gov. Jim Thompson on his last day in office in 1991, according to an investigation by the Tribune and WGN-TV.
Now, the people concerned with the solidity of the pension fund should be waving the red flag on this, but THAT is the crux of this problem. You've got the higher-up Union guys negotiating with politicians, but the politicians are typically put in office with the support of the Unions. So the Union is essentially represented on BOTH sides of the table. The taxpayers, and to some degree, the 'rank and file' Union workers are not represented to the same degree. So the Union higher-ups are able to wrangle these outrageous deals at the expense of taxpayers AND the people they are supposed to be representing. This system needs to be trashed.

Quote:
Originally Posted by Tadpole View Post
One of the problems I note in the entire debate is that somehow people latch onto a few individual cases of people that were in a position to game a pension system. This seems to get applied to all pensions of the rank and file who are not in a position to game anything. ...

This seems to come up in these pension discussions, and I disagree. I absolutely know that not all rank and file are able to game the system. But that doesn't make these cases any less wrong. And they are not rare. The spiking issue is particularly wide-spread.


Quote:
It is not as often that the story that goes rabid is one about people having the rug pulled out from under them with pensions that would have been rather modest and hard earned. ...
I think maybe you are looking at things through filtered lenses. I'm quite certain that any pension cuts made to rank and file public workers would make plenty of news. For one, I think it is pretty rare, but it would be outrageous and, I suspect, widely reported. In fact, I think there was a thread on this recently, some town that just can't afford to pay the pensions now? The prospect of making adjustments to FUTURE pensions of people not even hired yet got plenty of air-time here in IL - that's no changes to previous earned benefits, and no changes for any current workers, but it still made headlines. I can't even imagine the fever pitch of reporting if any rank-and-file got 'the rug pulled out from under them' for previously earned benefits (in fact, it appears to be unconstitutional in IL).

Quote:
What is creepy is that one starts getting the similar questions about ways people's private retirement savings are decreased in potential value by forces larger than themselves like the zero return for years on simple savings accounts. No place to hide? No way to win? Sometimes I think I will see a giant clawback of any wages that were not spent as they were earned. (Just a paranoid thought.)
Are you looking for guarantees? Who is going to provide those, and how? I think we need to be honest with ourselves, and acknowledge there is risk in everything, and deal with it.

-ERD50
__________________
ERD50 is online now   Reply With Quote
Old 10-13-2011, 09:02 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,253
Quote:
Originally Posted by donheff View Post
Not really. The companies took an "over funded plan" (i.e. one that could effectively pay what was expected by its participants) add in a pile of unfunded executive pensions and then close out the whole lot. The employees got what they had already earned --- way, way different than what they expected since they were approaching high earning years and high multiple pension calculation periods. The companies got to capture the "over funding" as earnings and got to capture take the immense liabilities that would now never be realized as earnings. And, guess what. They got to blame the employees and the unions because pensions were supposedly a problem.

I did not say they got 'what they expected'.... I said they got what they were promised... a lot different meaning...

The day the plan was closed, all earned benefits (the promise) were paid by either cash to the participant or buying an annuity to pay them when they retire... no promise was made that the plan could not be changed or elminated at the whim of management...

I agree with you in that what was expected by the employees was a lot more than what they got.... but guess what They could have voted with their feet and moved to another company that had better benefits.. (yea, I know, it is not the same... and I am not trying to get in an argument here)...

When companies make these major changes to pensions or other benefits and nothing happens... then other companies do the same thing... that is why in the private sector pensions have basically gone away because the employees that had them did not do much when they were taken away...

But back to my point... the employees got what was 'promised'... the overfunding of the plan would never have gone to the employees in any case...
__________________
Texas Proud is offline   Reply With Quote
Old 10-13-2011, 09:15 AM   #28
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Texas Proud View Post
that is why in the private sector pensions have basically gone away because the employees that had them did not do much when they were taken away...
It sure made me willing to leave and look for greener pastures.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-13-2011, 09:18 AM   #29
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,412
Private sector pensions have not gone away, they were changed from defined benefit to defined contribution plans for employees and most management. Most senior executives still have defined benefit plans.
__________________
MichaelB is online now   Reply With Quote
Old 10-13-2011, 09:20 AM   #30
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by MichaelB View Post
Most senior executives still have defined benefit plans.
Why am I not surprised? Talk about "haves" and "have nots" and the decline of the middle class...

That might explain why we stiffs in the trenches haven't sniffed a raise in several years.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-13-2011, 09:28 AM   #31
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,412
Quote:
Originally Posted by ziggy29 View Post
Why am I not surprised? Talk about "haves" and "have nots" and the decline of the middle class...

That might explain why we stiffs in the trenches haven't sniffed a raise in several years.
A different set of rules are in place for executives compensation vs most workers. Employees and workers compensation is subject to global marketplace competition while executives manipulate influence their own compensation and restrict competition for their own positions.
__________________
MichaelB is online now   Reply With Quote
Old 10-13-2011, 09:40 AM   #32
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by obgyn65 View Post
Where were the auditors ?
I watched some fairly in-depth local news coverage on the boob tube last night after my last post.

There seem to be 2 issues:

1. The head of the pension board is using a very "loose interpretation" of pension legislation to allow the shenanigans to occur as opposed to outright fraud. I don't think there was actually anything for auditors to catch as far as the 2 union bosses go. It's an issue with the legislation and the interpretation. And that's typical of most public pension "spiking" and double/triple dipping scenarios.

2. The head of the pension board himself may be in more trouble. This is just surfacing. He's been filling out time cards as an employee of the union but never actually doing any work for the union. This yields him a current paycheck and is setting him up for a double dip pension situation as well.

It'll be interesting to see who winds up "sleeping with the fish" over this. Like our situation with former Gov Blagojevich, someone will be punished for getting caught and causing the negative publicity (NOT for the actual deed which in itself is an accepted part of our culture) and will do some time or wind up as land fill at one of our "shovel ready projects."

Mayor Rahm Emanuel is saying we need a long term investigation and corrective action plan rather than any knee jerk reactions to the specifics of this particular revelation.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 10:45 AM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,253
Quote:
Originally Posted by MichaelB View Post
Private sector pensions have not gone away, they were changed from defined benefit to defined contribution plans for employees and most management. Most senior executives still have defined benefit plans.

True... bad on my part... I should have narrowed it to DB plans...


I think that a DC plan, or a cash balance plan is the best way to go for both public and private.... you get a % of money set aside and it earns an average bond type rate (IOW, it is not at market risks)...

So, if you are working part time for most of you life, you only get cash at your part time wage.... if you are low paid, same thing.... there is no spiking, no outrageous pension based on a few days or even a few years of high salary... your pension is based on your income earned during your working career... nothing more, nothing less....

How fair is that....
__________________
Texas Proud is offline   Reply With Quote
Old 10-13-2011, 11:01 AM   #34
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by Texas Proud View Post
So, if you are working part time for most of you life, you only get cash at your part time wage.... if you are low paid, same thing.... there is no spiking, no outrageous pension based on a few days or even a few years of high salary... your pension is based on your income earned during your working career... nothing more, nothing less....

How fair is that....
It's very fair. But the concept is a real culture shock in many parts of the country, mine included.

Heavy duty spiking, at least for public school teachers, State of Illinois employees and City of Chicago employees has been rampant. (I can't speak for employees working for counties or smaller municipalities.) It's a major cause of pension fund underfunding.

An employee progresses to a salary of $60k over her career. And pension fund dollars are contributed by the employee and by the gov't to fund a pension based on the current formula and that level of salary. Then, suddenly, at career end the employee makes $80k, $85k and $90k for the last three years qualifying her for a much larger cola'd pension. Funds were not set aside for that level.......

Recent legislation in Illinois has subdued spiking for educators. They're now limited to having only the first 6% of raises during their final 3 years count towards pensions (with, of course, some exceptions for promotions and the like). It's causing a real uproar as generous spiking had become so common it's current limitation is being referred to as a "broken promise!" Other legislation which limits the amount "retired" public employees can work (at the same job they retired from) while collecting their pensions is also being fought.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 11:04 AM   #35
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by Texas Proud View Post
I think that a DC plan, or a cash balance plan is the best way to go for both public and private.... you get a % of money set aside and it earns an average bond type rate (IOW, it is not at market risks)...

So, if you are working part time for most of you life, you only get cash at your part time wage.... if you are low paid, same thing.... there is no spiking, no outrageous pension based on a few days or even a few years of high salary... your pension is based on your income earned during your working career... nothing more, nothing less....

How fair is that....
I'd add one more thought: given today's realities, this should be portable and not depend on a single "job for life." I think it would be a good idea -- if done properly -- to have some form of "portable pension" that isn't largely at the whim of the market. Too many folks in the "401K generation" are simply too dependent on the market and are participants in the "lottery" of what the market is doing at the time they want to retire.

IMO such a pension should reduce the dependency on "retiring at the right time" -- reducing the discrepancy of folks who retire in 1999 being far better off than those who retire in 2007, both of whom contributed the same amounts to their 401Ks and IRAs and used the same asset allocation but one having a MUCH more comfortable retirement than the other. The place for pensions and SS is to smooth this out somewhat.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-13-2011, 11:10 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,634
Quote:
Originally Posted by Texas Proud View Post
I did not say they got 'what they expected'.... I said they got what they were promised... a lot different meaning...

The day the plan was closed, all earned benefits (the promise) were paid by either cash to the participant or buying an annuity to pay them when they retire... no promise was made that the plan could not be changed or elminated at the whim of management...

I agree with you in that what was expected by the employees was a lot more than what they got.... but guess what They could have voted with their feet and moved to another company that had better benefits.. (yea, I know, it is not the same... and I am not trying to get in an argument here)...

When companies make these major changes to pensions or other benefits and nothing happens... then other companies do the same thing... that is why in the private sector pensions have basically gone away because the employees that had them did not do much when they were taken away...

But back to my point... the employees got what was 'promised'... the overfunding of the plan would never have gone to the employees in any case...
In those instances where companies managed pension plans in good faith and were forced to close plans because they were under financial stress and without a good alternative I would agree that employees got what they were promised. But in many, many cases the plans were not managed in good faith. In these cases employees got what they had earned to date. But not what they were promised because when companies set up plans like these (which they were not forced to do) there is a statutory promise (effectively unenforceable) that they will manage the programs in good faith. This book provides ample evidence that the companies did not manage the plans in good faith. They plundered the plans to the benefit of executives and share holders and they spun the resulting demise to make most of America believe the fault lay with the plans themselves.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 10-13-2011, 11:12 AM   #37
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by ziggy29 View Post
I'd add one more thought: given today's realities, this should be portable and not depend on a single "job for life."
The MegaCorp I retired from referred to the cash balance plan as the "Portable Plan."
Quote:
IMO such a pension should reduce the dependency on "retiring at the right time" -- reducing the discrepancy of folks who retire in 1999 being far better off than those who retire in 2007, both of whom contributed the same amounts to their 401Ks and IRAs and used the same asset allocation but one having a MUCH more comfortable retirement than the other. The place for pensions and SS is to smooth this out somewhat.
The problem here is convincing the guy who is retiring with favorable market conditions in 2007 to give some up for the guy who retired in 1999. Will you be willing to do that if you get lucky when your time comes around?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 11:14 AM   #38
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by youbet View Post
The MegaCorp I retired from referred to the cash balance plan as the "Portable Plan."
The problem here is convincing the guy who is retiring with favorable market conditions in 2007 to give some up for the guy who retired in 1999. You will to do that if you get lucky when your time comes around?
Maybe -- but the problem with the high dependence on DC plans is that retirement becomes more like a lottery. If you are born at the right time and retire at the right time, you "win" even though someone else who played by the same rules and made the same choices "loses" because they came around at the wrong time.
__________________
"Hey, for every ten dollars, that's another hour that I have to be in the work place. That's an hour of my life. And my life is a very finite thing. I have only 'x' number of hours left before I'm dead. So how do I want to use these hours of my life? Do I want to use them just spending it on more crap and more stuff, or do I want to start getting a handle on it and using my life more intelligently?" -- Joe Dominguez (1938 - 1997)

RIP to Reemy, my avatar dog (2003 - 9/16/2017)
ziggy29 is offline   Reply With Quote
Old 10-13-2011, 11:20 AM   #39
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by donheff View Post
employees got what they had earned to date. But not what they were promised

This sounds much like some of our Illinois public pensions where currently employees are receiving what they earned (per formula) when they retire but are having "spiking" benefits subdued by recent legislation. Extreme spiking was so prevalent that many public employees considered it a promise and now consider receiving only the formula amount a promise broken. A lot of bitterness.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 11:22 AM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Quote:
Originally Posted by ziggy29 View Post
Maybe -- but the problem with the high dependence on DC plans is that retirement becomes more like a lottery. If you are born at the right time and retire at the right time, you "win" even though someone else who played by the same rules and made the same choices "loses" because they came around at the wrong time.
I agree with you. But you missed my question. How do we average out the performance of the economy to the satisfaction of those who would have received more had we left it as is?

It really is going to be hard to ensure equal investment results vs time for people saving for retirement. I think the first page of the FireCalc instructions explains it pretty well.
__________________

__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 05:22 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.