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Old 04-23-2012, 11:28 AM   #101
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To me if as an entity, the state of Illinois did not even pay an equivalent of what is considered the employers share of social security and that is an unbearable burden for the state, why are private entities required to pay it?
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Old 04-23-2012, 11:38 AM   #102
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Not really sure how you get to these numbers. It doesn't seem possible that a 3% COLA doubles the value of a pension in 10 years as you have portrayed...
Yes, this confused me too: "So your $40K cola pension @ 55 is ~ $80K cola pension at 65" means YOUR pension will double in value (not "waiting to take a COLA pension would cause it to be worth twice as much"). That must have been exciting for Flsail to think about, getting such a boost in his pension by the time he's 65!

Being an Illinois resident, I can't believe taxing retirement income isn't on the table too.
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Old 04-23-2012, 11:49 AM   #103
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Yes, this confused me too: "So your $40K cola pension @ 55 is ~ $80K cola pension at 65" means like YOUR pension will double in value (not "waiting to take a COLA pension would cause it to be worth twice as much"). That must have been exciting for Flsail to think about, getting such a boost in his pension by the time he's 65!

Being an Illinois resident, I can't believe taxing retirement income isn't on the table too.
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Old 04-23-2012, 11:57 AM   #104
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I was just looking at some numbers. Illinois GDP is around $650B. Over 20 years that would be $13T. The PV of the pension shortfall is around $65B. So 0.5% of the GDP over the next 20 years would be needed to completely shore up pension obligations.

Voters and political leadership may still conspire to take a negative path, but the state certainly has the resources to meet this obligation.
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Old 04-23-2012, 12:01 PM   #105
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Gradual phased in higher contributions from current workers as well as higher taxes (I pay taxes as well, so I would take a double hit) and fees. Definately get rid of the loop holes allowing pension inflating the last couple of years, and maybe even address the retirement age. I applaud your willingness to consider higher contributions by future recipients. Not sure I agree with the double hit POV, you will get a benefit from the higher contributions. All other taxpayers will not (maybe including your children,grandchildren, neighbors), and they'll have that much less to retire with while protecting public emoloyee pensions. Both sides have a legit issue IMO.

I'd also like to see some legislation to address funding the pensions. Mostly so we don't have a repeat of politicians not funding pensions in the "good times." Agreed, though it would have meant fewer services or higher taxes then, now and in the future. We all continue to expect politicians to give us much more than our taxes support, and refuse to let anything go (collectively) of really confront the choices.

I guess my main beef, and I am biased being that my federal penison is the cornerstone of my financial plan, is that any changes should be long term, fix the issue, and insure the pension is well funded and managed going into the future. I think we, even those without pensions themselves, all agree that current retirees need to be kept as whole as possible, followed by those nearing retirement and then unfortunately all others. But whenever anyone suggests all the sacrifice come from one party, that's where questions legitimately arise.
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Old 04-23-2012, 12:13 PM   #106
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Misery loves company. I suspect there is a bit of jealousy here.
Just a word of advice: if you want the public (especially those who *had* private pensions and lost them) to come around to your point of view, unsympathetically dismissing their legitimate concerns and not even trying to understand why they feel like second class citizens getting shafted by the system probably isn't the best way to go.

Why would you expect them to want to prop up your retirement benefits at their expense when all you do is make them sound like a bunch of jealous whiners who don't have any legitimate reasons for feeling as they do? I know y'all don't *want* to lose your pensions and I don't want to see anyone else lose them, but I think if you *had* lost yours already you might understand a little better why some people are pretty pissed off.
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Old 04-23-2012, 12:15 PM   #107
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He already explained it twice. I had a Corp pension until 1994 when it was frozen, but I'm not complaining at all (they did me a favor in retrospect). The full amount was available at age 65, if I wanted to retire earlier the pension layout was reduced by 5% per year. IOW at 64 I'd get 95%, at 60 I'd get 75%, at 55 I would have gotten 50% (hypothetically, elibility didn't begin that early). Not unusual in the private sector. Understand?
I really didn't need it explained to me, how "a" pension (versus "your" pension that's already been taken) grows in value the later it's taken, just was telling the OP I understood the confusion. But thanks for that.
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Old 04-23-2012, 12:23 PM   #108
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I had a Corp pension until 1994 when it was frozen, but I'm not complaining at all
Why would you complain since you were treated with kid gloves? Freezing a pension is no issue. You're receiving everything you earned. And I'm glad you didn't lose any earned benefits in the change. But being treated well is nothing to complain about, so why would you?
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Old 04-23-2012, 12:24 PM   #109
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I really didn't need it explained to me, how "a" pension (versus "your" pension that's already been taken) grows in value the later it's taken, just was telling the OP I understood the confusion. But thanks for that.
Sorry, post removed. I thought maybe public pensions were structured differently, so I was simply sharing how I believe many private sector pensions would arrive at a 50% payout, had nothing to with "mine" other than to show some first hand knowledge. And only quoted you because it was the last of several on that question. Peace...
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Old 04-23-2012, 12:26 PM   #110
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Misery loves company. I suspect there is a bit of jealousy here.
Seems unfair. Can you share where you see evidence from an actual poster (you may have to read several posts to avoid out of context)?
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Old 04-23-2012, 12:30 PM   #111
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(especially those who *had* private pensions and lost them)
Was you pension actually "lost" Zig? Or was it frozen? I think we're getting pulled between the idea of having a pension frozen (happened where I worked too......) and having already earned pension benefits withdrawn or reduced.
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Old 04-23-2012, 12:39 PM   #112
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Was you pension actually "lost" Zig? Or was it frozen? I think we're getting pulled between the idea of having a pension frozen (happened where I worked too......) and having already earned pension benefits withdrawn or reduced.
Federal law generally doesn't allow the takeaway of vested benefits for service already accrued (absent bankruptcy). So "losing" it usually means freezing it -- except for people who weren't vested yet. At my Megacorp the pension vesting period was 10 years (I worked there for 11.5 so I barely made it). Someone who worked there for 9 years could have nothing to show for it. And if they passed on other more lucrative opportunities in the meantime because they wanted the pension, oops -- too bad.

My only point is that people using terms like 'misery loves company" and calling others "jealous" to flippantly dismiss people with contrary feelings and opinions are making no effort to try to understand why people feel that way. When you utterly dismiss them like that, good luck gaining any of their support.
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Old 04-23-2012, 12:55 PM   #113
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Federal law generally doesn't allow the takeaway of vested benefits for service already accrued (absent bankruptcy). So "losing" it usually means freezing it -- except for people who weren't vested yet. At my Megacorp the pension vesting period was 10 years (I worked there for 11.5 so I barely made it). Someone who worked there for 9 years could have nothing to show for it. And if they passed on other more lucrative opportunities in the meantime because they wanted the pension, oops -- too bad.

My only point is that people using terms like 'misery loves company" and calling others "jealous" to flippantly dismiss people with contrary feelings and opinions are making no effort to try to understand why people feel that way. When you utterly dismiss them like that, good luck gaining any of their support.
Yeah, I understand "freezing" as it occurred where I worked. We went through the DBP stage to the Cash Balance stage to the 401k with matching stage and finally to the 401k with no matching stage. (I think some level of matching has now been restored, but not sure, I've been gone 6 yrs.)

I was only pointing out that many folks today are facing having their earned pensions reduced despite no formal bankruptcy because the courts haven't yet decided what happens to "obligations" when a government body runs out of funds. Should vendors be paid? Should contracts be honored? Should earned and vested pensions be honored? How about long retired folks, should they take an abrupt hit to pensions?

We know the politicians themselves will come out of it with some sort of sweet deal. For example, the Illinois pension fund that's in the best shape actually has a lower percentage of funding coming from the employees themselves than the fund in the worse shape. Why does this fund receive preferential treatment getting a nice percentage of state dollars? It's the fund which includes public safety and some elected officials! Their so-called "better" funding status isn't a result of members prudently meeting their obligations, it's political clout. And so it goes in Illinois........

As I said in an earlier post, this whole situation is going to be ugly with lots of situations where the innocent will get screwed and the guilty will once again come up the winners. It's ILLINOIS!
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Old 04-23-2012, 12:55 PM   #114
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I was just looking at some numbers. Illinois GDP is around $650B. Over 20 years that would be $13T. The PV of the pension shortfall is around $65B. So 0.5% of the GDP over the next 20 years would be needed to completely shore up pension obligations.

Voters and political leadership may still conspire to take a negative path, but the state certainly has the resources to meet this obligation.
This is a good point, and one of which I was unaware. It does make one think. Other than that, I am a little timid about saying much about something I don't know much about ... except that I think that the right thing to do isn't always the politically advantageous thing to do, and I will always be behind the former (whatever that may be). I tend to be skeptical of politicians, particularly those from Louisiana, New Jersey, and Illinois.
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Old 04-23-2012, 12:57 PM   #115
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I was only pointing out that many folks today are facing having their earned pensions reduced despite no formal bankruptcy because the courts haven't yet decided what happens to "obligations" when a government body runs out of funds. Should vendors be paid? Should contracts be honored? Should earned and vested pensions be honored? How about long retired folks, should they take an abrupt hit to pensions?
Are public pensions not covered by ERISA? That's pretty screwed up if not. They certainly should be.
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Old 04-23-2012, 01:10 PM   #116
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What about the "service" part of public service employees? Does anyone think public pensions should be protected and paid as promised because the employees serve the country/state/community?

How about military members? Serving the country?

Is it all about the dollar and the bottom line?
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Old 04-23-2012, 01:12 PM   #117
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Are public pensions not covered by ERISA? That's pretty screwed up if not. They certainly should be.
I don't think so, but I'm not sure. So far, buzz from the unions I've heard concerning reductions to already earned benefits mentions an article in the Illinois Constitution prohibiting it and also promises of a long court battle. But no mention of ERISA violations.

I think an indication of how bad this really is here in Illinois is the fact that if Illinois wanted to simply cancel all pension plans and obligations and put everyone on SS, they can't. Current state contributions are less than the 6%+ the Feds would force them to contribute as the employer's share of SS. They couldn't afford to go that high.......

Kind of makes my head spin. The hardware store down the street can afford to pay the employer's share of SS for the part time kid that stocks shelves. The State Of Illinois can't afford that.

Somewhere things kinda got outa hand here.....
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Old 04-23-2012, 01:18 PM   #118
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Are public pensions not covered by ERISA? That's pretty screwed up if not. They certainly should be.
Public pensions are not covered, and yes, they should be, and yes, that's pretty screwed up.
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Old 04-23-2012, 01:21 PM   #119
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This is a good point, and one of which I was unaware. It does make one think. Other than that, I am a little timid about saying much about something I don't know much about ... except that I think that the right thing to do isn't always the politically advantageous thing to do, and I will always be behind the former (whatever that may be). I tend to be skeptical of politicians, particularly those from Louisiana, New Jersey, and Illinois.
You forgot Florida.
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Old 04-23-2012, 01:26 PM   #120
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You forgot Florida.
I can tell where you spend winters..........
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