The story may be just the tip of the future problem with pensions, that hasn't seen too much attention.
https://money.cnn.com/2018/09/14/news/companies/sears-pension-retirees/index.html
This one has special meaning for me, as the early part of my career was spent with Sears, in a management training program.
It was in 1958, and I was assigned different short term assignments working with different parts of the company. Whan I was going through the sales training portion, I was assigned to an older, 65 year old saleman to learn the ropes. He was preparing to retire, and at that time, (1958) had, in his profit sharing program, a total of $213,000... inflation adjusted total today, $1.9 milion.
In my own case, profit sharing, from 1958 to 1966, when I left Sears, was very substantial. As I recall, about 50% of my last years' salary.
Brings me back to the pension payout problem, which I know has been endlessly discussed here on ER. A little closer to home, a good friend, recently retired from the Chicago School System with a $65K annual pension.
Not only is the teacher pension plan, essentially bankrupt, but the State of Illinois, is also in dire financial straits.
The next fallback program, the Pension Benefit Guaranty Corporation, expects that the program will run out of funds before 2025, and become insolvent by 2036.
https://www.pbgc.gov/news/press/releases/pr17-04
So... a gloom and doom forecast. Individual pension programs obviously vary widely, but the fear goes beyond the individual, to the overall effect on the national economy over a long period.
Nothing new here, but a subject that is getting some local attention in our town, with questions about the solvency of local government plans... police departments and most other local government positions.
From what I've been reading, while there has been much discussion, there don't seem to be many positive solutions. The Chicago Teachers Pension Plan alone, is $11 Billion in arrears, with no obvious help from the state. I believe that other Illinois cities are in a similar situation. Many tens of thousand employees, in just one state, and just in the public sector. Current estimated Illinois Public Pension plans are underfunded by $138 Billion.
The only obvious solution, is a massive tax increase, which eventually affects all of us. I don't see any of us, here, finding the answers, but neither do I see any current overall analysis or overview that projects the effect on the economy. Links?
https://money.cnn.com/2018/09/14/news/companies/sears-pension-retirees/index.html
This one has special meaning for me, as the early part of my career was spent with Sears, in a management training program.
It was in 1958, and I was assigned different short term assignments working with different parts of the company. Whan I was going through the sales training portion, I was assigned to an older, 65 year old saleman to learn the ropes. He was preparing to retire, and at that time, (1958) had, in his profit sharing program, a total of $213,000... inflation adjusted total today, $1.9 milion.
In my own case, profit sharing, from 1958 to 1966, when I left Sears, was very substantial. As I recall, about 50% of my last years' salary.
Brings me back to the pension payout problem, which I know has been endlessly discussed here on ER. A little closer to home, a good friend, recently retired from the Chicago School System with a $65K annual pension.
Not only is the teacher pension plan, essentially bankrupt, but the State of Illinois, is also in dire financial straits.
The next fallback program, the Pension Benefit Guaranty Corporation, expects that the program will run out of funds before 2025, and become insolvent by 2036.
https://www.pbgc.gov/news/press/releases/pr17-04
So... a gloom and doom forecast. Individual pension programs obviously vary widely, but the fear goes beyond the individual, to the overall effect on the national economy over a long period.
Nothing new here, but a subject that is getting some local attention in our town, with questions about the solvency of local government plans... police departments and most other local government positions.
From what I've been reading, while there has been much discussion, there don't seem to be many positive solutions. The Chicago Teachers Pension Plan alone, is $11 Billion in arrears, with no obvious help from the state. I believe that other Illinois cities are in a similar situation. Many tens of thousand employees, in just one state, and just in the public sector. Current estimated Illinois Public Pension plans are underfunded by $138 Billion.
The only obvious solution, is a massive tax increase, which eventually affects all of us. I don't see any of us, here, finding the answers, but neither do I see any current overall analysis or overview that projects the effect on the economy. Links?
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