Join Early Retirement Today
Reply
 
Thread Tools Display Modes
Old 04-24-2012, 10:55 AM   #181
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
 
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
Quote:
Originally Posted by Mulligan View Post
Ironically, for the teachers anyways if the contribution system had initially came from the schools in the first place instead of the state, the system would be funded significantly better. Missouri's system is set up this way where the school portion goes in immediately with the teachers contribution. There has never been the opportunity to skip a payment like Ill. has done through the years.
This is exactly how it should be. I've heard of some private sector union plans where the employer only agreed to keep the pension plan going if the union took responsibility for it -- the employer would give a pool of money to the union each year to fund the pension plan and their obligations were finished. If the union mismanaged it, it's the union's problem, not the employer's. To the employer it wasn't that much different than providing a 401K match.

I don't think it's so much the *current cost* per employee that threatens pension plans, it's the uncertainty of future obligations (especially when there are so many incentives to underfund, to overpromise with unreasonable expectations on future returns and so on). And we all know what Wall Street thinks of uncertainty.
__________________
"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)
ziggy29 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 04-24-2012, 10:59 AM   #182
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,149
Quote:
Originally Posted by Mulligan View Post
If the pension funding problem is just dumped onto the school at once, yes it most certainly would cause some stress to schools finances or increased taxes. Ironically, for the teachers anyways if the contribution system had initially came from the schools in the first place instead of the state, the system would be funded significantly better. Missouri's system is set up this way where the school portion goes in immediately with the teachers contribution. There has never been the opportunity to skip a payment like Ill. has done through the years. Local property tax rates arent too bad where I live anyways about 1% of home value and that includes everything including city.
Interesting Mulligan. Our property tax rates are higher here, generally 2% of home value or more. And we're not paying for public pensions through property taxes, yet. So they'll be going up.

A tip of the hat to the Missouri system which insures tax contributions go into the pension fund simultaneously with the employee contribution. I sure wish we had been been doing it that way here.

Last night on the public TV show (which Ripper1 pointed us to), the spokesman representing Gov Quinn, Ty Fahner of the Commercial Club of Chicago, did readily admit that the failure to fund the pension plan over the years was a travesty and suggested that in the private sector it would have called for a Congressional investigation and likely criminal charges. No details of what those charges would have been were given. We definitely need our "reform" to include some method of enforcement causing funding to be mandatory and not "suggested."

I suppose that when the local gov'ts are paying the bill, they'll keep an eye on Springfield that they put the money in the pension fund and not in the "slush fund!"

I think the question which must eventually be answered is whether all of the money that participants gave via payroll deduction made it into the fund. Or, was some of it actually funneled away to meet other state needs? Could Illinois actually have made negative contributions?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 04-24-2012, 02:00 PM   #183
Dryer sheet wannabe
Ron0731's Avatar
 
Join Date: Jan 2012
Location: Springfield Illinois
Posts: 23
Quote:
Originally Posted by Steel Rain

Well, since my pension is just my investment portfolio, the inevitable higher taxes is very much going to impact my "Self Pension". I could turn this around and say its easy to want no change since you have yours....


Steel
Yes, but I was not allowed to take the money that the state took out of my check and put into the state pension system for the past 31 years, so I could put it in my investment portfolio
Ron0731 is offline   Reply With Quote
Old 04-24-2012, 02:06 PM   #184
Recycles dryer sheets
 
Join Date: Apr 2012
Location: Oswego
Posts: 76
Quote:
Originally Posted by Ron0731 View Post
Yes, but I was not allowed to take the money that the state took out of my check and put into the state pension system for the past 31 years, so I could put it in my investment portfolio
Fair enough. I dont want to be misunderstood, I am not looking to short soemeone. There are many facets to this question but among them is that the system was corrupt from day one. I am hoping you get value for what you paid in, im just hoping that I dont get to pay in for that value. That sounds fair to me.

Steel
Steel Rain is offline   Reply With Quote
Old 04-24-2012, 02:12 PM   #185
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
ziggy29's Avatar
 
Join Date: Oct 2005
Location: North Oregon Coast
Posts: 16,483
Quote:
Originally Posted by Steel Rain View Post
Fair enough. I dont want to be misunderstood, I am not looking to short soemeone. There are many facets to this question but among them is that the system was corrupt from day one. I am hoping you get value for what you paid in, im just hoping that I dont get to pay in for that value. That sounds fair to me.
We all pay in to the extent that public employer pension contributions are part of an overall total compensation. And as long as the total compensation is fair and relatively in line with the market, I don't much care whether 10% or 30% of the compensation is for benefits -- and in theory it shouldn't matter whether some of that compensation is "deferred" as pension plan contributions. The problem comes because even if the employer funds the pension properly year after year as part of employee compensation, they could still be retroactively on the hook if the pension plan overpromises and/or underdelivers.
__________________
"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)
ziggy29 is offline   Reply With Quote
Old 04-24-2012, 02:20 PM   #186
Dryer sheet wannabe
Ron0731's Avatar
 
Join Date: Jan 2012
Location: Springfield Illinois
Posts: 23
Quote:
Originally Posted by Steel Rain

Fair enough. I dont want to be misunderstood, I am not looking to short soemeone. There are many facets to this question but among them is that the system was corrupt from day one. I am hoping you get value for what you paid in, im just hoping that I dont get to pay in for that value. That sounds fair to me.

Steel
Believe me, I totally understand where your coming from. But the point is Illinois legislature and the governor will not quit spending. They want to cut state employee pensions but the governor just gave 10 million dollars to Chicago to clean up the river,,, for god's sake, we do have our priorities here in Illinois WTF.....
Ron0731 is offline   Reply With Quote
Old 04-24-2012, 02:34 PM   #187
Recycles dryer sheets
 
Join Date: Apr 2012
Location: Oswego
Posts: 76
Quote:
Originally Posted by Ron0731 View Post
Believe me, I totally understand where your coming from. But the point is Illinois legislature and the governor will not quit spending. They want to cut state employee pensions but the governor just gave 10 million dollars to Chicago to clean up the river,,, for god's sake, we do have our priorities here in Illinois WTF.....
Completey agree. The amount of sheer corruption in this state is mind boggling. Its fully bipartisan as well, as can be seen by two former governers in the slammer together as we speak. I just hope it holds together long enough for me to escape to someplace warm

Steel
Steel Rain is offline   Reply With Quote
Old 04-24-2012, 02:40 PM   #188
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
Quote:
Originally Posted by Steel Rain View Post
Completey agree. The amount of sheer corruption in this state is mind boggling. Its fully bipartisan as well, as can be seen by two former governers in the slammer together as we speak. I just hope it holds together long enough for me to escape to someplace warm

Steel
Better get out now before you have to pay another nickel for public employee pensions.
ripper1 is offline   Reply With Quote
Old 04-24-2012, 02:41 PM   #189
Thinks s/he gets paid by the post
 
Join Date: Aug 2006
Posts: 1,558
Historically, very few people have saved adequately for retirement.

Before pensions and SS, people mostly just lived with relatives in retirement. Of course, since most people didn't live into what we now consider "old age", it wasn't a big issue.

It's not clear to me that we will ever get the majority of people to think decades ahead on their own without some government force involved.

I'm forced to accept that SS is a neccessary evil.


Quote:
Originally Posted by jclarksnakes View Post
People did actually save for retirement before there were IRAs. The idea of tax incentives for retirement saving does seem pretty compelling but the endless array of IRA permutations end up adding more complication to our already too complicated tax code.
Hamlet is offline   Reply With Quote
Old 04-24-2012, 03:34 PM   #190
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,148
Here's the local PBS segment (vid) referenced earlier for anyone who might want to watch (and couldn't). Not much depth, one guest seemed a little more "defensive" than the other ('not our fault'), but both have legitimate gripes it appears which suggests compromise will be necessary (like most of the deficit/debt issues all around us). Not holding my breath, but eventually...

Illinois' Pension Fix | Chicago Tonight | WTTW
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-24-2012, 03:55 PM   #191
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,149
Quote:
Originally Posted by ziggy29 View Post
The problem comes because even if the employer funds the pension properly year after year as part of employee compensation, they could still be retroactively on the hook if the pension plan overpromises and/or underdelivers.
Thus most private employers have gotten out of the pension game. Our esteemed politicians came up with a pretty good set of rules and regs for private employers to back out of pension plans while still giving reasonable protection to employees. But they forgot to write a set of rules for themselves in the public sector leaving situations like this where folks are trying to brainstorm some unique solution to facilitate change.

Public employees need to be on SS with a 401k (match to be determined by competitive needs). But there is no defined path to get from where we are to there as was provided for private employers.

An alternative would be a hybrid plan such as Wisconsins which seems to be muddling through the current tough economic times maintaining near 100% funding. The beauty of Wisconsin's system is that payouts vary with market performance down to a floor level. With the recent poor investment performance of their portfolio, prior increases have been partially withdrawn (annuitants are actually getting smaller payments) but if/when their portfolio recovers and grows, they'll get increases again. It flexes with the market. And Wisconsin has always funded the system per requirements.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 04-24-2012, 04:09 PM   #192
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,148
Quote:
Originally Posted by ziggy29 View Post
The problem comes because even if the employer funds the pension properly year after year as part of employee compensation, they could still be retroactively on the hook if the pension plan overpromises and/or underdelivers.
Quote:
Originally Posted by youbet View Post
Thus most private employers have gotten out of the pension game.
  • The demographics have become increasingly unfavorable for private employers (fewer workers per retiree) just like Soc Sec, and
  • Some companies were faced with reducing costs or going out of business as the global economy has taken hold. Most people would rather lose their pension and still have a job than to lose both - unfortunately that was the real choice companies and employees faced. When pensions first began to disappear, I assume people thought they'd change jobs to a company that had a pension, and that probably worked for a while. Eventually pensions became so rare in the private sector there haven't been many choices.

    It's a vicious circle but I'm not sure how it could have been avoided - general statement, not saying either of you suggested it could have been avoided.
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-24-2012, 04:14 PM   #193
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,149
Quote:
Originally Posted by Midpack View Post
(not saying either of you suggested it).
Not saying you suggested it either.........

But yes, it's a mess. A bit of a perfect storm regarding retirement funding. All three legs of the stool; pension, SS and savings are having some tough times for most folks.
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 04-24-2012, 04:28 PM   #194
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
The middle class in this country continues to erode.
ripper1 is offline   Reply With Quote
Old 04-24-2012, 04:31 PM   #195
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,149
My own views are that all should be treated fairly within a competitive environment which gives some level of incremental reward to the brightest and hardest working.

I suspect my background is significantly more blue collar than many on this board. Here are the words to the song by John Wort Hannam which inspired my signature and avatar.......



Blue Collar

Written by: John Wort Hannam

I wasn't born blue blood, I was born blue collar
like my dad and grandad, I'm gonna follow
there's no old money here, you gotta earn every dollar
I wasn't born blue blood, I was born blue collar

My daddy was a fireman on a locomotive train
shoveled coal to the furnace to generate the steam
out to Pictou Harbour from the Colliery Mine
Along the Tramway Line

My daddy was a farmer with acres of land
he cleared all the fields with a horse and his hands
that pile of stones at the sections edge
stands as his monument

I wasn't born blue blood, I was born blue collar
like my dad and grandad, I'm gonna follow
there's no old money here, you gotta earn every dollar
I wasn't born blue blood, I was born blue collar

My daddy was a lumberman in a shanty town
put his axe to the pines and he chopped 'em down
he floated them on the Mirimichi 'till
he rode them to the Chatham saw mill

I wasn't born blue blood, I was born blue collar
like my dad and grandad, I'm gonna follow
there's no old money here, you gotta earn every dollar
I wasn't born blue blood, I was born blue collar
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 04-24-2012, 05:12 PM   #196
Thinks s/he gets paid by the post
Goonie's Avatar
 
Join Date: Oct 2006
Location: North-Central Illinois
Posts: 3,228
Quote:
Originally Posted by ERD50
Well, clearly it was unfair that the State did not make the contributions they were supposed to make. But I throw that back to the Union leaders - where were you guys when IL didn't make their payments? Were you calling for changes so that the pension system would remain viable? It seems clear that the Union leaders were not interested in IL paying either. Because that would have required raising taxes way back then, and that would have raised attention to just how expensive these pensions are, and taxpayers would question (like they are now) why are we paying for pensions that are in general more generous than private pensions? The Union leaders did not want those Qs coming up, and they knew we had the Constitutional requirement that earned pension benefits must be paid, so they were happy to sweep it under the rug, and kick the can down the road for the next guy. So I find it far too convenient for the Union guys to now say 'it wasn't our fault, don't ask us to pay'.

-ERD50

Quote:
Originally Posted by youbet

Actually Zig, while spiking and other scams make great media headlines, the biggest problem in Illinois, by far, was the lack of funding. Yes, overly optimistic estimates of investment returns are part of the lack of funding issue, but remember that in Illinois the bottom line has been to not fund the system. That was consistent. The excuse not to fund varied from year to year, but the not funding part stayed the same. Whether the excuse was good investment returns, new actuarial tables, we can't afford it this year but we'll make it up next year, etc., etc., the consistent thing was failure to fund. And so be it. Today it is what it is.
I've been an active member of AFSCME (the public employees' union) since 1976, and I know that the Union leaders (and general membership) have been raising complaints about the non-payment by the State since they quit paying. It wasn't non-payment for a few years, but rather non-payment for decades. The problem is that the State of Illinois wears 3 hats simultaneously....bank depositor, bank guard, and bank robber. The State is "supposed to" be making deposits into the pension funds. However, instead, the State acting as a bank robber, just misappropriates those funds for other projects. And the State, acting as the "guard", not only allows it, but encourages it! The State has full jurisdiction over the entire thing, and has completely ignored ALL of the Unions complaints about he matter.

The State of Illinois might possibly be able to blame the current economy for their inability to fund the pensions, but that doesn't excuse their blatant disregard of their obligation to pay for the last couple of decades. I'd love to hear just one single Illinois politician have the intestinal fortitude to stand up and admit just one time, that one of the major contributing factors to the present state pension woes, has been (and still is) the State's failure to pay for YEARS!!!

And yet the politicians and the media keep trying to spin it that somehow it's really not the State's fault, and they want the employees and retirees to make up for State's incompetence. Though I'm not covered by any of the State's faltering pensions, my heart goes out to those who are. (I'm covered by IMRF, which fortunately isn't run or mismanaged by the State of Illinois!!!)
Goonie is offline   Reply With Quote
Old 04-24-2012, 05:24 PM   #197
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Midpack's Avatar
 
Join Date: Jan 2008
Location: NC
Posts: 21,148
Quote:
Originally Posted by ripper1 View Post
The middle class in this country continues to erode.
Welcome to globalization...
__________________
No one agrees with other people's opinions; they merely agree with their own opinions -- expressed by somebody else. Sydney Tremayne
Retired Jun 2011 at age 57

Target AA: 50% equity funds / 45% bonds / 5% cash
Target WR: Approx 1.5% Approx 20% SI (secure income, SS only)
Midpack is offline   Reply With Quote
Old 04-24-2012, 05:29 PM   #198
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 13,149
Quote:
Originally Posted by Goonie View Post
I've been an active member of AFSCME (the public employees' union) since 1976, and I know that the Union leaders (and general membership) have been raising complaints about the non-payment by the State since they quit paying. It wasn't non-payment for a few years, but rather non-payment for decades. The problem is that the State of Illinois wears 3 hats simultaneously....bank depositor, bank guard, and bank robber. The State is "supposed to" be making deposits into the pension funds. However, instead, the State acting as a bank robber, just misappropriates those funds for other projects. And the State, acting as the "guard", not only allows it, but encourages it! The State has full jurisdiction over the entire thing, and has completely ignored ALL of the Unions complaints about he matter.

The State of Illinois might possibly be able to blame the current economy for their inability to fund the pensions, but that doesn't excuse their blatant disregard of their obligation to pay for the last couple of decades. I'd love to hear just one single Illinois politician have the intestinal fortitude to stand up and admit just one time, that one of the major contributing factors to the present state pension woes, has been (and still is) the State's failure to pay for YEARS!!!

And yet the politicians and the media keep trying to spin it that somehow it's really not the State's fault, and they want the employees and retirees to make up for State's incompetence. Though I'm not covered by any of the State's faltering pensions, my heart goes out to those who are. (I'm covered by IMRF, which fortunately isn't run or mismanaged by the State of Illinois!!!)
Nicely said Goonie. Yes, employee organizations, union representatives and individual employees have been vigorously waving the red flag for decades. But, it's hard to fight "Da Machine."

There are multitudes of reasons for today's issues with the Illinois pension system. But the constant denial of the state's refusal to deposit the required funds into the account year after year after year seems lame. Perhaps the "silver spoon" crowd just doesn't get it.

I only hope that folks who contributed 9% - 10% by direct paycheck deduction for decades and didn't benefit from the scams, double dipping, etc., that a few politically connected crooks did, come out of this OK. And, of course, I hope those crooks die early, painful deaths.......
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Old 04-24-2012, 05:49 PM   #199
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Chicago
Posts: 1,154
Quote:
Originally Posted by youbet View Post
Nicely said Goonie. Yes, employee organizations, union representatives and individual employees have been vigorously waving the red flag for decades. But, it's hard to fight "Da Machine."

There are multitudes of reasons for today's issues with the Illinois pension system. But the constant denial of the state's refusal to deposit the required funds into the account year after year after year seems lame. Perhaps the "silver spoon" crowd just doesn't get it.

I only hope that folks who contributed 9% - 10% by direct paycheck deduction for decades and didn't benefit from the scams, double dipping, etc., that a few politically connected crooks did, come out of this OK. And, of course, I hope those crooks die early, painful deaths.......
+1....Thank you, Youbet, that would be absolute poetic justice. One of the best posts yet.
ripper1 is offline   Reply With Quote
Old 04-24-2012, 06:30 PM   #200
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
Chuckanut's Avatar
 
Join Date: Aug 2011
Location: West of the Mississippi
Posts: 17,134
Quote:
Originally Posted by ziggy29 View Post
I don't even think it's the level of funding so much as it is systemic problems with some plans. You can't allow spiking, promise benefits based on assumed investment returns of over 8% and give 90% of base pay for 30 years of service at age 50 and remain solvent through all foreseeable economic cycles. And you can't look at a good year in the stock market and say "we don't need to fund the pension plan this year".
+1!! Amen! So Say We All!!
__________________
Comparison is the thief of joy

The worst decisions are usually made in times of anger and impatience.
Chuckanut is offline   Reply With Quote
Reply


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


» Quick Links

 
All times are GMT -6. The time now is 02:26 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2024, vBulletin Solutions, Inc.