Join Early Retirement Today
Closed Thread
 
Thread Tools Search this Thread Display Modes
Old 03-25-2016, 07:51 AM   #41
Moderator
MichaelB's Avatar
 
Join Date: Jan 2008
Location: Rocky Inlets
Posts: 24,446
This is a tough issue and many members are personally affected, so keeping the thread free of snark and political characterizations is greatly appreciated by all.
__________________

__________________
MichaelB is offline  
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 03-25-2016, 07:52 AM   #42
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,425
Quote:
Originally Posted by Senator View Post
I would think at some point, the Federal government would issue a bailout. ....
Very unlikely IMO. The other 49 states residents are not going to be willing to pay for Illinois lack of fiscal discipline. I think bankruptcy is more likely and creditors will incur losses.
__________________

__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-25-2016, 07:57 AM   #43
Thinks s/he gets paid by the post
Senator's Avatar
 
Join Date: Feb 2014
Location: Eagan, MN
Posts: 3,047
Quote:
Originally Posted by marko View Post
Reminds me of a conversation I once had with a well educated lady. She was telling me about how she got sick in England and it was 'completely free!'.

I said: "Well, someone was paying for it"

She said "Yes, the government"
Exactly. The beauty that the USA has is that when the USD gets printed, the rest of the world, helps pay for it too. It's actually pretty fair. The USA subsidizes almost the entire world, so it doesn't make me feel bad at all. When you hear the word trade deficit, translate that to subsidy.

Chicago pensions got into trouble by under-funding and/or overpaying obligations. The city of CHI cannot print money, and raising taxes gets people to vote for others. People have figured out that they can vote to increase their entitlements, by electing politicians that promise more. At some point, they reach the end, and that end is getting close.

Getting a federal bailout, and having the rest of the world help pay, makes sense. SS will get bailouts, PR will get bailouts, most healthcare plans need subsidies, businesses get subsidies, etc.

The CHI pensions will be fixed behind the scenes, and most people will never know, or care, what happened.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
Senator is offline  
Old 03-25-2016, 08:01 AM   #44
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
pb4uski's Avatar
 
Join Date: Nov 2010
Location: Vermont & Sarasota, FL
Posts: 16,425
Quote:
Originally Posted by Senator View Post
....Getting a federal bailout, and having the rest of the world help pay, makes sense. ....
Totally disagree. That makes no sense at all and sets a precedent where states could be irresponsible knowing that the federal government will bail them out. It would be better to let them go through bankruptcy where other states and municipalities would see that there are adverse consequences to bad decisions.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
pb4uski is online now  
Old 03-25-2016, 08:05 AM   #45
Full time employment: Posting here.
 
Join Date: Oct 2009
Posts: 943
Quote:
Originally Posted by pb4uski View Post
Totally disagree. That makes no sense at all and sets a precedent where states could be irresponsible knowing that the federal government will bail them out. It would be better to let them go through bankruptcy where other states and municipalities would see that there are adverse consequences to bad decisions.

Ding, ding, ding. We have a winner. Couldn't agree more.


Sent from my iPad using Early Retirement Forum
__________________
LARS is offline  
Old 03-25-2016, 08:11 AM   #46
Recycles dryer sheets
Greencheese's Avatar
 
Join Date: Oct 2013
Posts: 261
Overall you're going to see the issue of capital mobility. Now more than ever people and corporations are mobile and they can/will move to more favorable areas when push comes to shove. Sure they could fix the budget issues by increasing taxes to 50% of income (unreal I know), but people and businesses will react accordingly. Greece is trying to do that and now companies have moved across the border to Bulgaria to avoid the new taxes. In order to save Chicago and Illinois the government needs to make their location more attractive and worth the cost of staying. Better transportation, more safety, clean water, faster internet, good education opportunities, etc... you know, the things talk about wanting when they move to the big city. Getting people to want to be in Chicago and ultimately pay taxes is the way to get out of this fiscal mess. Cutting services and increasing taxes is increasing cash flow short term at the extreme detriment of growth and future money tomorrow.

[Mod Edit]
__________________
Greencheese is offline  
Old 03-25-2016, 05:13 PM   #47
Full time employment: Posting here.
 
Join Date: Mar 2010
Location: Chicago
Posts: 867
Quote:
Originally Posted by Sandman62 View Post
This is a problem. Just because a majority of people don't have something doesn't mean they should get to vote it away for those that do. Maybe alter it for the future (like my private mega crop did 18 years into my career), but not undo contracts that were already honored by one party.

My DW is a RI teacher and got screwed by our government, who added 7 years to her retirement age, reduced her benefits and increased her contributions. This sets a terrible precedent about being able to vote away contracted obligations just because the angry mob is jealous.
A statute in the Illinois Legislation dating back 1970 was created as a pension clause in the constitution that stated pensions of public employees could not be diminished or impaired. The did this because they were shorting the pensions back then and even before. Now that the rooster has come home to roost they want to put it all on the backs of the employees that never missed funding their part. Instead of raising taxes a little at a time they were continually shorting the pensions to pay for services. It made them look good and they kept getting elected.
__________________
ripper1 is offline  
Old 03-25-2016, 05:25 PM   #48
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,266
Quote:
Originally Posted by Sandman62 View Post
This is a problem. Just because a majority of people don't have something doesn't mean they should get to vote it away for those that do. Maybe alter it for the future (like my private mega crop did 18 years into my career), but not undo contracts that were already honored by one party.

My DW is a RI teacher and got screwed by our government, who added 7 years to her retirement age, reduced her benefits and increased her contributions. This sets a terrible precedent about being able to vote away contracted obligations just because the angry mob is jealous.

If you DW's plan is like any of the ones that I have seen, that change is a 'go forward' change.... IOW, she can get what she was promised up to that change...

When Texas changed their plan, one of my sisters was on the edge... but was able to buy in and get under the old rules.... however, she could have quit and been under the old rules and gotten 100% of what she had earned to date...
__________________
Texas Proud is offline  
Old 03-25-2016, 05:36 PM   #49
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: May 2005
Posts: 13,266
Quote:
Originally Posted by ripper1 View Post
A statute in the Illinois Legislation dating back 1970 was created as a pension clause in the constitution that stated pensions of public employees could not be diminished or impaired. The did this because they were shorting the pensions back then and even before. Now that the rooster has come home to roost they want to put it all on the backs of the employees that never missed funding their part. Instead of raising taxes a little at a time they were continually shorting the pensions to pay for services. It made them look good and they kept getting elected.

I do not disagree.... but others have said (do not know if true) that the plan was funded just a few years back (IIRC, in the 80% range).... so what has happened in the last decade? I do not know if it is all due to not funding their part or not... could be...


However, it also does appear that the funding was not properly thought out as there is no money to make up the difference.... and that if nothing is done then all people with pensions will not get anything.... so something has to give... but hey, there is that pesky law (which I remember Texas passing a few years back and I thought it was very stupid to pass)....

So, you cannot tax enough to pay for the shortfall.... you cannot change the rules to make it where it can last.... so what do you do Seems to me that the only thing left is BK... as that is a federal law and the Illinois law is then mute....

Sorry to say that not all contracts work out... I would hate to be on the short end of this problem and do feel sorry for the people who are.... but life happens....


BTW, look at Greece.... they had to cut much more than Illinois and Chi will have too.... and they still are a basket case....
__________________
Texas Proud is offline  
Old 03-25-2016, 05:43 PM   #50
Dryer sheet aficionado
 
Join Date: Mar 2013
Posts: 43
Quote:
Originally Posted by Texas Proud View Post
If you DW's plan is like any of the ones that I have seen, that change is a 'go forward' change.... IOW, she can get what she was promised up to that change...

When Texas changed their plan, one of my sisters was on the edge... but was able to buy in and get under the old rules.... however, she could have quit and been under the old rules and gotten 100% of what she had earned to date...
You're right that it was "go-forward" as far as the money. But her retirement age went from 28/30/35 years of service - by which she could've retired at the earliest at age 50 - to a new formula that pushed her to a minimum age 59. This was when she was already age 48+! Talk about being near the finish line and having it moved?!
__________________
Sandman62 is offline  
Old 03-25-2016, 06:02 PM   #51
Full time employment: Posting here.
 
Join Date: Mar 2010
Location: Chicago
Posts: 867
Quote:
Originally Posted by Texas Proud View Post
I do not disagree.... but others have said (do not know if true) that the plan was funded just a few years back (IIRC, in the 80% range).... so what has happened in the last decade? I do not know if it is all due to not funding their part or not... could be...


However, it also does appear that the funding was not properly thought out as there is no money to make up the difference.... and that if nothing is done then all people with pensions will not get anything.... so something has to give... but hey, there is that pesky law (which I remember Texas passing a few years back and I thought it was very stupid to pass)....

So, you cannot tax enough to pay for the shortfall.... you cannot change the rules to make it where it can last.... so what do you do Seems to me that the only thing left is BK... as that is a federal law and the Illinois law is then mute....

Sorry to say that not all contracts work out... I would hate to be on the short end of this problem and do feel sorry for the people who are.... but life happens....


BTW, look at Greece.... they had to cut much more than Illinois and Chi will have too.... and they still are a basket case....
There will be no bankruptcy in Chicago. They will get their wall street and corporate partners to start ponying up.
__________________
ripper1 is offline  
Old 03-25-2016, 09:11 PM   #52
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Feb 2013
Posts: 5,326
Quote:
Originally Posted by Sandman62 View Post
This is a problem. Just because a majority of people don't have something doesn't mean they should get to vote it away for those that do. Maybe alter it for the future (like my private mega crop did 18 years into my career), but not undo contracts that were already honored by one party.

My DW is a RI teacher and got screwed by our government, who added 7 years to her retirement age, reduced her benefits and increased her contributions. This sets a terrible precedent about being able to vote away contracted obligations just because the angry mob is jealous.
I'm not making a value judgement either way. I just think realistically this is what will happen and has started to happen, as in Detroit and multi-employer pensions plans.

Thomas Jefferson said, "A democracy is nothing more than mob rule, where fifty-one percent of the people may take away the rights of the other forty-nine. ” I don't have a crystal ball, but with ~$3 trillion in public pension debt at the state level alone and a shrinking middle class, I don't see states, cities and municipalities being able to tax their way out of this, the gaps are just too much per person:

"The bottom line, Inman said, was that there were $3 trillion worth of unfunded pension liabilities at the state level, and $400 billion of unfunded liabilities at the large-city level. That turns out to be about $10,000 per American citizen. “That’s something that we really have to think about, and it has not gotten significantly better.....Chicago’s unfunded liabilities are 10 times its revenues. Just assume that they’re going to have to pay 5% of that [number annually]. That means you’re looking at 50% of their cash that will have go to pensions.

Source: Underfunded Pensions: Tackling an 'Invisible' Crisis
__________________
Even clouds seem bright and breezy, 'Cause the livin' is free and easy, See the rat race in a new way, Like you're wakin' up to a new day (Dr. Tarr and Professor Fether lyrics, Alan Parsons Project, based on an EA Poe story)
daylatedollarshort is online now  
Old 03-26-2016, 10:51 PM   #53
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,265
Quote:
Originally Posted by Teacher Terry View Post
Most retired state workers do not end up with huge pensions-those are not that common. For instance in Nevada the average state worker gets a pension of 20k. ...
Careful with averages (and this thread is about Chicago pensions):

https://www.illinoispolicy.org/repor...icago-workers/

Quote:
Average pension benefits are one of the most commonly used and misleading pension statistics. That’s because averages include older retirees who’ve been retired for a long time and short-term workers who receive relatively small pensions for their limited time working for government.

A more appropriate and accurate measure of how generous pension benefits have become is the average pension for a worker who retired recently (within the last three years) and dedicated his or her career (at least 30 years) to city government. Career workers make up about half of all currently retired city workers in Chicago.

... The average pension for Chicago teachers is $47,700, which includes short-term workers and individuals who retired years ago at much lower compensation levels. But the average pension for a career teacher in Chicago who recently retired is $71,700
And 3% COLA.


Quote:
Originally Posted by Teacher Terry View Post
Illinois government workers do pay into SS. ...
Careful - some IL govt workers pay into SS. Teachers, for example, do not.

Setting the facts straight about pensions

Quote:
.. a decision made many years ago by the state ruled that Illinois would not be a Social Security state when it came to its teachers. Teachers do not pay into Social Security.

Quote:
Originally Posted by Teacher Terry View Post
I agree that the states need to pay what was promised. ...
Needs? What if they don't have the money? And how about a city (this thread is about Chicago Pensions)?

Quote:
Originally Posted by Teacher Terry View Post
In my field I worked for less $ in return for that pension. I could have made more $ in private. Both my siblings are retired from IL and the same was true for their professions.
I'll skip over the 'worked for less' comment, since there are many components to 'total compensation', some of which are not monetary.

But a promised pension was also part of the deal for my career at MegaCorp. But they could go bankrupt. Then it falls to the PBGC ( contributions were made to them for this insurance), and in that case pensions will be paid with a cap in place (unless/until the PBGC runs out of money), and no COLA in either case.

Why should municipal employees of a BK employer be treated differently than private employees of a BK employer?

-ERD50
__________________
ERD50 is offline  
Old 03-27-2016, 09:00 AM   #54
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,878
Thanks, everyone.

__________________

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now  
Closed Thread


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


Similar Threads
Thread Thread Starter Forum Replies Last Post
Chicago Pension Reform ripper1 FIRE and Money 0 04-02-2014 01:20 PM
Rhode Island Public Pension System Reform MichaelB FIRE and Money 131 11-25-2011 04:48 PM
California proposal for pension reform MichaelB FIRE and Money 88 11-05-2011 10:42 PM

 

 
All times are GMT -6. The time now is 03:23 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.