Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-13-2011, 01:03 PM   #61
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Mulligan's Avatar
 
Join Date: May 2009
Posts: 7,379
Quote:
Originally Posted by youbet

There it is! The youbet "understatement of the day." Congratulations on your award!

Here in Illinois (this thread did start out being about Illinois.......) our ability to be dumb and greedy when making investments is exceeded only by our love and admiration of corruption, graft, payola, scams, machine politics and the public servants who pull them off.
Why thank you, Youbet! I haven't received an award since I went to the principals office... Wait that was for a spanking... This might be my first ever!
Seriously though my 5 closest friends who don't have pensions, are putting money in their 401k. But they have no idea how much they need or how to appropriate it properly. I couldn't beat any of them with a paddle long enough or hard enough to get them to pay attention to know what funds they are investing in or what the funds investing goals are. This spring my GF complained her funds went up "only 5%" the past quarter. I could barely get her to understand that her money would double in less than 4 years at that "only" amount.
__________________

__________________
Mulligan is offline   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 10-13-2011, 01:23 PM   #62
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,455
Quote:
Originally Posted by ziggy29 View Post
In reality, I think the greatest risk would be political risk -- resisting the pressure to increase benefits in bull markets because the pension fund is so "overfunded". Avoid that temptation (this helped ruin the solvency of some pension funds) and it becomes much more likely to survive prolonged bear markets like 1966-1982 or 2000-20xx -- and be sustainable for many decades.
+1

Quote:
Originally Posted by Bestwifeever View Post
I could see all pensions turned into SS on steroids--no more private/municipal/state/federal pensions or social security retirement, just a mandatory contribution to a new national pension fund managed by a new agency; if you wanted to put more in, too bad, manage that on your own (like one does when they exceed limits on IRA and 401K contributions).
+1

They have tried to do this in other countries. I haven't paid too much attention but I believe Australia and the UK have some version. Chile and Argentina for sure. Some suffer from high fees, killing returns. Argentina's funds were raided - the gov't forced them to buy gov't bonds when no one else would. Still, as an alternative it is alluring.
__________________

__________________
MichaelB is offline   Reply With Quote
Old 10-13-2011, 01:34 PM   #63
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by Bestwifeever View Post
I could see all pensions turned into SS on steroids--no more private/municipal/state/federal pensions or social security retirement, just a mandatory contribution to a new national pension fund managed by a new agency; if you wanted to put more in, too bad, manage that on your own (like one does when they exceed limits on IRA and 401K contributions).
Re: conversion of state/local public employee plans to federal control: I'd hate to see yet more power and control move upward. Is there some reason to believe other public employers are less adept than the feds? Any reason to protect them from themselves if they are?

Re: Conversion of private pensions: Same issue, but more so. How is this the business of the federal government?

And with the new government agency making the stock and bond purchases, we'd have increased government ownership of US private companies. Can they buy tobacco companies? Of course they should preferentially invest in "green" companies. Sometimes companies get into labor disputes, I wonder if anyone in Congress might move to disinvest from such companies at strategic times. And sometimes companies need "help" so this will be a good mechanism for accomplishing that.

Please, no.

I look at our federal government, the tremendous waste there and lack of responsiveness and accountability, and wonder why there is still some sentiment for wanting to bump things up to a higher level of centralization. The terms "federal", "national" etc still have some type of special esteem in some quarters.
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 10-13-2011, 01:36 PM   #64
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
It would be like getting private and public employers out of the health insurance business. I'm just floating that out there.
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 10-13-2011, 01:55 PM   #65
Thinks s/he gets paid by the post
Bimmerbill's Avatar
 
Join Date: Jan 2006
Posts: 1,631
Does anyone believe that an employer offering a pension is a good thing?
Does anyone believe that there can be well funded and well managed pensions?
__________________
Bimmerbill is offline   Reply With Quote
Old 10-13-2011, 02:07 PM   #66
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2004
Posts: 11,615
Quote:
Originally Posted by Bimmerbill View Post
Does anyone believe that an employer offering a pension is a good thing?
In the abstract and starting from a clean sheet of paper: No. For all the reasons we've seen, employment (compensation now for work performed now) and the concept of guaranteed lifetime income in retirement are two separate things that each do better when kept separate.

Now, if a private employer wants to attracts and keep employees with some type of deferred compensation scheme, to include a pension, they should be allowed to do that. The mechanism to do that is with a contract, and the government should have no further interest in assuring that this contract is fulfilled than it does with any other contract. No public reinsurance, no shifting of risk to other entities. The government provides the courts for use in settling contract issues.
Quote:
Originally Posted by Bimmerbill View Post
Does anyone believe that there can be well funded and well managed pensions?
Sure. But is there any reason to believe that a company with expertise in producing toasters will be the very best choice to meet the need for lifetime income of several thousand employees? Wouldn't we expect this to be done better if they could choose a specialized manager in an open marketplace?
__________________
"Freedom begins when you tell Mrs. Grundy to go fly a kite." - R. Heinlein
samclem is online now   Reply With Quote
Old 10-13-2011, 02:26 PM   #67
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 Bimmerbill View Post
Does anyone believe that there can be well funded and well managed pensions?
I'd point you to the Wisconsin Pension System. I'm not a member, never even lived in Wisconsin. But it's structure and operation are impressive. They fully fund each retiree's pension at the beginning per actuarial standards and, apparently, realistic investment yield expectations. Then they modulate the pension amount (including going DOWN!) to accomodate investment performance.

It really looks sustainable. Participants tolerate some payment variation but are rewarded with full funding.

I'd rather DIY, but I understand that is too stressful for some and the Wis system looks like a reasonable alternative.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 03:13 PM   #68
Moderator Emeritus
Bestwifeever's Avatar
 
Join Date: Sep 2007
Posts: 16,375
Quote:
Originally Posted by youbet View Post
I'd point you to the Wisconsin Pension System. I'm not a member, never even lived in Wisconsin. But it's structure and operation are impressive. They fully fund each retiree's pension at the beginning per actuarial standards and, apparently, realistic investment yield expectations. Then they modulate the pension amount (including going DOWN!) to accomodate investment performance.
Is that a state agency that administers the pension? If so, couldn't a federal agency emulate it?
__________________
“Would you like an adventure now, or would you like to have your tea first?” J.M. Barrie, Peter Pan
Bestwifeever is offline   Reply With Quote
Old 10-13-2011, 03:21 PM   #69
Moderator
ziggy29's Avatar
 
Join Date: Oct 2005
Location: Texas
Posts: 15,612
Quote:
Originally Posted by youbet View Post
I'd point you to the Wisconsin Pension System. I'm not a member, never even lived in Wisconsin. But it's structure and operation are impressive. They fully fund each retiree's pension at the beginning per actuarial standards and, apparently, realistic investment yield expectations. Then they modulate the pension amount (including going DOWN!) to accomodate investment performance.
That could work -- at least if nothing else, the state funding is a sunk (and just as importantly, known and predictable) cost each year as a part of employee non-cash compensation, and the risk to the taxpayer for "underperforming" pension funds is very limited.
__________________
"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, 03:42 PM   #70
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 Bestwifeever View Post
Is that a state agency that administers the pension?
Yes.
Quote:
If so, couldn't a federal agency emulate it?
I'm sure a fed agency could emulate it........ if they could sell the constitutents on a pension plan where monthly payments are recalcualted each year based on a rolling average of fund investment performance.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 03:48 PM   #71
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
the risk to the taxpayer for "underperforming" pension funds is very limited.
Yes. By actually reducing pensions (but not below their original amount), they minimize tax payer liability for investment performance in market downturns. Of course, this means that a retiree who received big increases during several years of market run up could see those increases vanish during a prolonged downturn.

They do the calculations on a rolling average basis to keep from knee jerking folks. And there are two investment categories to chose between, one more aggressive, one less aggressive. If you go to the web site and look at historical payouts, the more aggressive fund has had some significant ups and downs over the years.

The sharing of investment risk between the retirees and the tax payers seems like a good plan. At least I'd like it here in Illinois. In our case both investment risk and shenanigan risk (spiking, double/triple dipping, etc.) are on the backs of the tax payers.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 03:49 PM   #72
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Quote:
Originally Posted by Bestwifeever View Post
Is that a state agency that administers the pension? If so, couldn't a federal agency emulate it?
There would, at least, be a problem of confidence. After years of bluster and threats to reduce Social Security benefits, certain government-hating politicians have gotten people really scared about whether they'll ever actually get any SS. If I had a nickel for every poster in this very forum saying he couldn't plan on SS payments when he retires, I wouldn't even need a pension.
__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 10-13-2011, 04:29 PM   #73
Thinks s/he gets paid by the post
steelyman's Avatar
 
Join Date: Feb 2011
Location: Triangle
Posts: 3,218
It's conceivable that this thread could be redirected to another current one titled "The Retirement Heist".
__________________
steelyman is offline   Reply With Quote
Old 10-13-2011, 04:54 PM   #74
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 GregLee View Post
There would, at least, be a problem of confidence. After years of bluster and threats to reduce Social Security benefits, certain government-hating politicians have gotten people really scared about whether they'll ever actually get any SS. If I had a nickel for every poster in this very forum saying he couldn't plan on SS payments when he retires, I wouldn't even need a pension.
Any lack of confidence in SS that I have has its roots in the big gov't advocates who think they can add an unlimited number of folks and increase benefits without end.

There are those who want to privatize or just kill SS. And there are those who will bring it to its knees by using it far beyond its original charter, although with good intentions I suppose. Either way, the integrity of the program suffers.

In any case, the situation with Illinois public pensions and the associated ongoing "happenings" has little relation to SS other than many Illinois public pension recipients don't participate in SS.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 10-13-2011, 06:49 PM   #75
Recycles dryer sheets
 
Join Date: Mar 2008
Posts: 404
Quote:
Originally Posted by youbet View Post
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.
The inequities are even more noticeable in small, far downstate communities, where the median household income is a little over $30K, and all the teachers live in the gated subdivision with the doctors and lawyers.

It wasn't always this way. My old high school principal is 85 years old and draws a $28K pension, and lives in the same modest house he did 40 years ago.

Maybe teachers were underpaid for a long time, but the pendulum has swung too far the other way now.

The recently retired ones I know, wear those pensions like a badge of honor, and look down on those of lesser fortune.
__________________
ACC USN-(Ret)
BLS53 is offline   Reply With Quote
Old 10-13-2011, 07:49 PM   #76
Thinks s/he gets paid by the post
GregLee's Avatar
 
Join Date: Oct 2010
Location: Waimanalo, HI
Posts: 1,881
Quote:
Originally Posted by BLS53 View Post
The inequities are even more noticeable in small, far downstate communities, where the median household income is a little over $30K, and all the teachers live in the gated subdivision with the doctors and lawyers.
I don't understand what you're trying to say here. It's inequitable for a teacher to live in a gated subdivision? What equities are involved? Does that even make any sense?
__________________
Greg (retired in 2010 at age 68, state pension)
GregLee is offline   Reply With Quote
Old 10-13-2011, 11:26 PM   #77
Recycles dryer sheets
 
Join Date: Mar 2008
Posts: 404
Quote:
Originally Posted by GregLee View Post
I don't understand what you're trying to say here. It's inequitable for a teacher to live in a gated subdivision? What equities are involved? Does that even make any sense?

The subdivision is just an anecdote and isn't the issue. The issue in Illinois is the overly generous salaries and pensions, that allow working stiff teachers to live an increasingly opulent lifestyle.

The inequity is between the taxpayers and the teachers. And the fact that all government entities involved are broke, while the teachers get richer.

Not to mention the local district continually fails to meet learning achievement standards, and the teens coming out of the high school are a step above animal life. But I digress.
__________________
ACC USN-(Ret)
BLS53 is offline   Reply With Quote
Old 10-14-2011, 06:05 AM   #78
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2007
Posts: 5,072
It sure make one wonder. Hopefully someone digs deep to find out if there was some sort of Quid Pro Quo for some considerations or favors.

Is it a case of political and bureaucratic corruption?

IMO - It deserves some attention from the Justice Dept and FBI!
__________________
chinaco is offline   Reply With Quote
Old 10-14-2011, 08:04 AM   #79
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: 8,643
Anger at the structure and abuses (spiking, etc) of pensions makes sense to me but we are also back to the argument that teachers are overpaid. Maybe I am wrong but it feels like many people who complain about teacher salaries are all about the market when it comes to entertainers, athletes, executives, etc. Why not wait for Mr. Market to straighten things out? We are in a period of turmoil and uncertainty. Suddenly people who a few years ago were described as risk averse government drones willing to work for low wages to secure modest lifetime income guarantees are now viewed as vastly overpaid, pampered rich kids. Today there are lines to get teaching jobs and other government jobs. This too shall pass.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Old 10-14-2011, 08:09 AM   #80
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,281
Quote:
Originally Posted by chinaco View Post
It sure make one wonder. Hopefully someone digs deep to find out if there was some sort of Quid Pro Quo for some considerations or favors.

Is it a case of political and bureaucratic corruption?
It is no wonder, and it takes no digging to figure out if this was Quid Pro Quo for some considerations or favors or a case of political and bureaucratic corruption. It undoubtedly was.

Quote:
That arrangement is allowed under a state law signed by Gov. Jim Thompson on his last day in office in 1991, ...

Now, making the connections to prove anything is a whole 'nother matter. Recall that it took two trials (the first was a hung jury on all but one count) to find former Governor Blago guilty of using his influence inappropriately, even though they had numerous tapes of him referring to the Senate seat vacated by Pres Obama as:

Quoting the Blagojevich Complaint: Chicagoist
(edits mine)

Quote:
“I’ve got this thing and it’s (eff-ing) golden, and, uh, uh, I’m just not giving it up for (eff-ing) nothing. I’m not gonna do it. And, and I can always use it. I can parachute me there.” (pg 59)
ROD BLAGOJEVICH said that the consultants (Advisor B and another consultant are believed to be on the call at that time) are telling him that he has to "suck it up" for two years and do nothing and give this "(m-effer) [the President-elect] his senator. (Eff) him. For nothing? (Eff) him." '

Quote:
IMO - It deserves some attention from the Justice Dept and FBI!
Agree, and I hope they could alter those pensions. But I doubt they have anything on tape, they don't have Gov Thompson saying that these pension changes are 'effen Golden', so I don't expect anything to happen. I don't think this is on the protesters list though.

-ERD50
__________________

__________________
ERD50 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 01:00 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.