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Old 04-24-2012, 09:18 AM   #161
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I did not mis manage it, did not vote for this nonsense and dont want to work longer to make it good.
I would expand that to say I don't want to be taxed beyond current levels to support any public pension, especially SS. If mismanaged programs, like the Illinois public pension system or, on a national level, SS, can't stand on their own as is, it's time to reduce benefits to the point where they are self-sustaining.
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Old 04-24-2012, 09:23 AM   #162
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I would expand that to say I don't want to be taxed beyond current levels to support any public pension, especially SS. If mismanaged programs, like the Illinois public pension system or, on a national level, SS, can't stand on their own as is, it's time to reduce benefits to the point where they are self-sustaining.
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".
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Old 04-24-2012, 09:37 AM   #163
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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".
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 stayed up and read about the situation in Illinois late into the night last night. It turns out there is much, much more to the proposal than the players are putting out on the table for public review. This is not a surprise in Illinois politics. For example, switching to the new plan is proposed as being voluntary.......... Not switching will mean giving up subsidized retiree medical insurance but for many, say a teacher who has spousal coverage anyway, it won't matter. Or, once you hit 65, the Illinois retiree med plan is actually more expensive than Medicare plus a good supplement. Quinn says he expects only about 75% of the plan participants to switch. I imagine there are also some thoughts of a tie-in to ObamaCare since that source of med insurance would enable folks to be less concerned about giving up the Illinois retiree package. In fact, I'm wondering if the real savings aren't going to be from not providing retiree med insurance, or at least that will be an important part of it.

Another interesting tidbit mentioned but not emphasized is that the new plan shifts the cost of public pensions form the state to local taxing districts. Over several years, teacher and municipal pensions will be switched to being funded by local communities through higher property taxes. Only true state employees (less than one forth of the total) will be funded through the state income tax. While the state ledger will look more pleasing, home owners will find their property tax bills going up as the cost burden shifts from Springfield to Podunk, Ill. I was unable to find a proposed algorithm or time table for this "cost sharing." It will be a good thing to have the cost as part of property taxes as property taxes tend to get more scrutiny than income taxes. The shift in funding form state income tax to local property tax appears to be a pact between Rahm Emanuel and Pat Quinn and is related to the fact that Chicago already funds its public pensions through local property taxes. It's good news for Chicago residents and bad news for suburbanites and down-staters.

So....... there is much more to this than we're discussing here. It will be interesting to watch it unfold.

I'd suggest folks who actually have some vested interest in what's happening in Illinois do some googling and some reading. What we're discussing here is just general hogwash about pensions. If you or someone close is involved in Illinois, best to do some additional research as the devil is in the details.
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Old 04-24-2012, 09:43 AM   #164
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Actually Zig, while spiking and other scams make great media headlines, the biggest problem in Illinois, by far, was the lack of funding. Yes, over 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 varied from year to year, but the not funding part stayed the same. Whether the excuse was good investment returns, new acturial tables, we can't afford it this year but we'll make it up next year, etc., etc., the consistent thing was fairlure to fund. And so be it. Today it is what it is.
Sure. But "media headlines" or not, it affects public opinion and the willingness to sacrifice more to shore it up. Same goes for taxes: even if certain "poster children" for waste and fraud are a very small part of the budget, people want them cleaned up before they're willing to spend another dollar in taxes.

There's an old saying (I say to my wife about my w*rk all the time) that goes something like, "failure to plan on your part does not constitute a crisis on my part." And so it is here.
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Old 04-24-2012, 09:51 AM   #165
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Sure. But "media headlines" or not, it affects public opinion and the willingness to sacrifice more to shore it up. Same goes for taxes: even if certain "poster children" for waste and fraud are a very small part of the budget, people want them cleaned up before they're willing to spend another dollar in taxes.

There's an old saying (I say to my wife about my w*rk all the time) that goes something like, "failure to plan on your part does not constitute a crisis on my part." And so it is here.

No doubt you're correct Zig. I'm just talkin' 'bout the numbers, not the emotions.

But, you're right. I think the same thing happened in the private sector. With all the headlines and National Inquirer style articles about corporate executives making zillions, company jets, bonuses, etc., etc., it's no wonder the freezing/elimination/cancellation of private sector pension plans/401k matches and the like gets little sympathy except from those directly impacted.

Time to reign all these programs in. No more money to SS. No more money to public pensions. Absolutely no public subsidization (in any way, direct or indirect or through tax incentives) of private pensions or 401k style plans. I even question the tax deferred status of retirement savings plans. Why do it?
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Old 04-24-2012, 09:57 AM   #166
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Time to reign all these programs in. No more money to SS. No more money to public pensions. Absolutely no public subsidization (in any way, direct or indirect) of private pensions or 401k style plans. I even question the tax deferred status of retirement savings plans. Why?
I would say that it's in the best interests of society for people to be able to retire in order to reduce the involuntary unemployment rate. Part of the unemployment problem is that many older folks who would have been retiring in decades past can't do it today, perhaps due to insufficient savings combined with a lack of pension and a need for Megacorp health insurance. Indeed, one of the publicly unstated goals of SS in the beginning was to free up jobs for the younger unemployed. This is also why I think it's folly to "fix" SS and Medicare by raising the eligibility age across the board. All that will do is throw a lot more people into the pool of jobseekers when there aren't enough jobs for the ones already in it.
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Old 04-24-2012, 10:10 AM   #167
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I would say that it's in the best interests of society for people to be able to retire in order to reduce the involuntary unemployment rate. .
I suppose. But absolutely no need to tax youngsters to pay for geezers to sit at home drinking beer and watching the Cubs lose yet another one. SS is fine as it is and if funding isn't adequate to continue the current level of payments, lower the payments. Public pensions too high? Cut 'em. Private companies cancelling plans? It's their perogative.

I think the tone of this thread clearly points to the self-serving attitude of those who seek to pick fruit at the public orchard. Everyone wants to harvest from the most bountiful tree and contribute the least to the shared effort of maintaining the orchard. It's human nature I guess. We'll never equitably support all the possible ways to have folks not work. That's why DIY will be best over the long haul.
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Old 04-24-2012, 10:21 AM   #168
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No doubt you're correct Zig. I'm just talkin' 'bout the numbers, not the emotions.

But, you're right. I think the same thing happened in the private sector. With all the headlines and National Inquirer style articles about corporate executives making zillions, company jets, bonuses, etc., etc., it's no wonder the freezing/elimination/cancellation of private sector pension plans/401k matches and the like gets little sympathy except from those directly impacted.

Time to reign all these programs in. No more money to SS. No more money to public pensions. Absolutely no public subsidization (in any way, direct or indirect or through tax incentives) of private pensions or 401k style plans. I even question the tax deferred status of retirement savings plans. Why do it?
Wow, a fellow Libertarian I agree completely, once you start giving favored status to anthing or anyone, more will follow with the end result being the current abomination that is our tax code

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Old 04-24-2012, 10:23 AM   #169
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One more request to keep this on topic please...
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Old 04-24-2012, 10:33 AM   #170
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One more request to keep this on topic please...
Can you be more specific please? I'm not sure which posts/comments you consider off topic. It all seems on-topic to me, I would not want to see the thread closed, but I'm not sure what is and what isn't concerning you.

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Old 04-24-2012, 10:52 AM   #171
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Can you be more specific please? I'm not sure which posts/comments you consider off topic. It all seems on-topic to me, I would not want to see the thread closed, but I'm not sure what is and what isn't concerning you.

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[mod hat on]See the post above MichaelB's. Mentioning political parties/affiliations often leads to political discussions and waking up porky.[/mod hat off]
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Old 04-24-2012, 10:53 AM   #172
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Sorry my bad, still learning the ropes.

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Old 04-24-2012, 11:24 AM   #173
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No doubt you're correct Zig. I'm just talkin' 'bout the numbers, not the emotions.

But, you're right. I think the same thing happened in the private sector. With all the headlines and National Inquirer style articles about corporate executives making zillions, company jets, bonuses, etc., etc., it's no wonder the freezing/elimination/cancellation of private sector pension plans/401k matches and the like gets little sympathy except from those directly impacted.

Time to reign all these programs in. No more money to SS. No more money to public pensions. Absolutely no public subsidization (in any way, direct or indirect or through tax incentives) of private pensions or 401k style plans. I even question the tax deferred status of retirement savings plans. Why do it?
All right now you are going a little too far here. Are you saying they should do away with traditional IRA'S? How else are people supposed to save for retirement than if they don't have pensions.
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Old 04-24-2012, 11:30 AM   #174
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All right now you are going a little too far here. Are you saying they should do away with traditional IRA'S? How else are people supposed to save for retirement than if they don't have pensions.
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.
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Old 04-24-2012, 11:31 AM   #175
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I suppose. But absolutely no need to tax youngsters to pay for geezers to sit at home drinking beer and watching the Cubs lose yet another one. SS is fine as it is and if funding isn't adequate to continue the current level of payments, lower the payments. Public pensions too high? Cut 'em. Private companies cancelling plans? It's their perogative.

I think the tone of this thread clearly points to the self-serving attitude of those who seek to pick fruit at the public orchard. Everyone wants to harvest from the most bountiful tree and contribute the least to the shared effort of maintaining the orchard. It's human nature I guess. We'll never equitably support all the possible ways to have folks not work. That's why DIY will be best over the long haul.
It is a little late for most older people to be DIY so things do need to be fixed but you can't just eliminate things and say thats it. Going forward I believe the younger generation will be the DIY.
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Old 04-24-2012, 11:36 AM   #176
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All right now you are going a little too far here. Are you saying they should do away with traditional IRA'S? How else are people supposed to save for retirement than if they don't have pensions.
They could do it through saving and investing.

My point is that over the past few years, with the economy on the ropes and with private pensions, public pensions and SS all threatened, everyone is grasping for their own source of retirement funding to be spared the axe. I'm simply saying, screw it, cut 'em all. Why should political winds force one citizen to subsidize another when the favoritism is invariably politically driven?

As mentioned above, there seems to be much more to the so-called pension "reform" in Illinois than is being headlined in the media or discussed here. Our ramblings are more about sharing the burden of retirement funding in general with each participant pulling for his/her own interest. I think we are trying the moderators' patience, but it's hard to discuss pensions without poltics, especially public sector pensions.

Hence, my feeling that perhaps rather than try to legislate pension "fairness," just doing away with gov't preferences would be best.
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Old 04-24-2012, 11:49 AM   #177
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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 stayed up and read about the situation in Illinois late into the night last night. It turns out there is much, much more to the proposal than the players are putting out on the table for public review. This is not a surprise in Illinois politics. For example, switching to the new plan is proposed as being voluntary.......... Not switching will mean giving up subsidized retiree medical insurance but for many, say a teacher who has spousal coverage anyway, it won't matter. Or, once you hit 65, the Illinois retiree med plan is actually more expensive than Medicare plus a good supplement. Quinn says he expects only about 75% of the plan participants to switch. I imagine there are also some thoughts of a tie-in to ObamaCare since that source of med insurance would enable folks to be less concerned about giving up the Illinois retiree package. In fact, I'm wondering if the real savings aren't going to be from not providing retiree med insurance, or at least that will be an important part of it.

Another interesting tidbit mentioned but not emphasized is that the new plan shifts the cost of public pensions form the state to local taxing districts. Over several years, teacher and municipal pensions will be switched to being funded by local communities through higher property taxes. Only true state employees (less than one forth of the total) will be funded through the state income tax. While the state ledger will look more pleasing, home owners will find their property tax bills going up as the cost burden shifts from Springfield to Podunk, Ill. I was unable to find a proposed algorithm or time table for this "cost sharing." It will be a good thing to have the cost as part of property taxes as property taxes tend to get more scrutiny than income taxes. The shift in funding form state income tax to local property tax appears to be a pact between Rahm Emanuel and Pat Quinn and is related to the fact that Chicago already funds its public pensions through local property taxes. It's good news for Chicago residents and bad news for suburbanites and down-staters.

So....... there is much more to this than we're discussing here. It will be interesting to watch it unfold.

I'd suggest folks who actually have some vested interest in what's happening in Illinois do some googling and some reading. What we're discussing here is just general hogwash about pensions. If you or someone close is involved in Illinois, best to do some additional research as the devil is in the details.
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.
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Old 04-24-2012, 11:50 AM   #178
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It is a little late for most older people to be DIY
That's why, earlier in this thread, I was speaking up for avoidance of cuts to pensions of folks already long retired and unable to return to work. A common response I heard was that that outcome needed to be left on the table but be avoided if possible.
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so things do need to be fixed but you can't just eliminate things and say thats it. Going forward I believe the younger generation will be the DIY.
Yep, DIY will be the way to go. But I would want complete DIY, including tax incentives for retirement plans and other passive investing being eliminated.

In the meantime, we continue to play king of the mountain with one group seizing the top of the "benefit mountain" only to be knocked off by the next.
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Old 04-24-2012, 11:50 AM   #179
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While there is no uniform way to measure and compare tax rates among states, most sources I have seen put Illinois in the middle for individual income tax.

Edit: This link places Illinois at 13th at 10% vs the national average of 9.8% The Tax Foundation - State and Local Tax Burdens: All States, One Year, 1977 - 2009
I agree this is hard to do, but back of the envelope shows we have 7% sales tax, at 5% flat income tax and propery taxes similer, a tad lower, but close enough, to that of NJ. So, all in all, it would seem that we would be very high. I will look around and see if i can find the comparison, i dont recall were we ranked, but it was top 5. I think Hawaii was the highest, but let me google and i will come back.

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Old 04-24-2012, 11:54 AM   #180
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They could do it through saving and investing.

My point is that over the past few years, with the economy on the ropes and with private pensions, public pensions and SS all threatened, everyone is grasping for their own source of retirement funding to be spared the axe. I'm simply saying, screw it, cut 'em all. Why should political winds force one citizen to subsidize another when the favoritism is invariably politically driven?

As mentioned above, there seems to be much more to the so-called pension "reform" in Illinois than is being headlined in the media or discussed here. Our ramblings are more about sharing the burden of retirement funding in general with each participant pulling for his/her own interest. I think we are trying the moderators' patience, but it's hard to discuss pensions without poltics, especially public sector pensions.

Hence, my feeling that perhaps rather than try to legislate pension "fairness," just doing away with gov't preferences would be best.
I believe everyone involved should pull their own weight. Like I said earlier I am ready to lose the COLA if need be. I am already being taxed in Indiana for my pension. I think taxing the pensions here in Illinois should be done absolutely. Why should someone get income free of taxation. It is not the end of the world. I feel I am also a DIY in that I have substantial savings and a 457 account. I knew early on in my heart that this thing would not or could not be sustainable at some point. But for some people this is all they got so I do understand the angst.
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