Outlandish Pensions Push Providence Toward Bankruptcy

[haha]

With Pensions Like This, No Kidding Providence Rhode Island Faces 'Bankruptcy By June'

"Untenable pension promises made by corrupt politicians to corrupt unions in an unholy alliance is about to sink another city."

You be the judge.

Ha

 

[arky]

I believe we will see more and more stories like this as 2012 unfolds.

 

[Chuckanut]

Everytime I hear about one of these abusive systems, I give thanks that my much more modest pension is also funded properly. I also wonder what a review of city contracts would discover. I doubt if the 'corruption' started and stopped with pensions for well paid city administrators.

 

[Bestwifeever]

Illinois's new motto: "At least we're not Rhode Island."

 

[youbet]

Illinois's new motto: "At least we're not Rhode Island."

Exactly BWE. Well put!

It seems to be the same story. Elected government officials and union bosses working together to scam the public.

DW, a retired public union member in Illinois, gets almost daily emails from union bosses imploring her to not believe the unfounded stories about Illinois pensions. "Everything is OK!" They go on and on. Bottom line: Believe in the politicians and union officials you elected and get the vote out to keep them elected.

I'm trying to be optimistic but it's getting tough.

 

[Mulligan]

With Pensions Like This, No Kidding Providence Rhode Island Faces 'Bankruptcy By June'

"Untenable pension promises made by corrupt politicians to corrupt unions in an unholy alliance is about to sink another city."

You be the judge.

Ha

Are they ANNUALLY getting 5-6% cola's on their pension? Dont they understand the magic ( or destruction) of compound interest? Their pensions would double every 12 years. Im not a pension basher because I am one, but that is outrageous and destructive for everyone including the pensioners.

 

[HFWR]

Why are we surprised that the people in "power" set up the system to enrich themselves and their supporters? And it is not party specific; only who is getting enriched changes...

 

[ripper1]

Now come on now 5 and 6% cost of living allowances are completely absurd. I am a retired public employee from the City of Chicago. And even though I retired in 2010 in my mid 50's I still have to wait 3 years to get a COLA of 3%. Granted this is a pretty good deal but I also pay a non deductible 815 dollars a month for health insurance for my wife and I. We were also told we would probably be on our own after 2013. So other than the big wigs and double dippers that we always here about the Municipal pensions here I don't think are out of line. Now the State of Illinois retirees don't pay any premiums for their health care so that is problematic. This being said there is legislation getting started that will impact current employees as far as benefits going forward and probably COLA for retirees. So to make this thing sustainable I think Illinois is moving in the right direction.

 

[youbet]

Now the State of Illinois retirees don't pay any premiums for their health care so that is problematic.

That is incorrect. Where did you hear/read that?

I think Illinois is moving in the right direction.

That's what the politicians and union bosses keep saying to their constituents, but I sure don't think so. I think they just want to continue selling the bill of goods until they retire and move away with their treasure chests.

"Clunk - tinker - tinker - tinker." "Clunk -tinker - tinker - tinker." Did you hear that? Sounds like a can being kicked on down the road........

 

[ripper1]

What makes you think I am incorrect. I read it in the newspaper, OK. I also know a person who says he doesn't pay a health premium.

 

[ripper1]

Also new employees starting in 2012 will be working longer and have a vastly reduced benefit package, so, yes I think Illinois is moving in the right direction. Tell me I am wrong about this too.

 

[Midpack]

Now the State of Illinois retirees don't pay any premiums for their health care so that is problematic. This being said there is legislation getting started that will impact current employees as far as benefits going forward and probably COLA for retirees. So to make this thing sustainable I think Illinois is moving in the right direction.

That is incorrect. Where did you hear/read that?

Looks like ripper1 may be 90% correct. Google is your friend Debate over insurance premiums for state retirees to resurface - Springfield, IL - The State Journal-Register

 

[youbet]

What makes you think I am incorrect. I read it in the newspaper, OK. I also know a person who says he doesn't pay a health premium.

I think you're incorrect because my wife receives a State of Illinois pension and has State of Illinois medical insurance. I can assure you she pays a monthly premium for the medical insurance. It's deducted from our checking account each month.

Perhaps the person you know who told you he doesn't pay a premium for State of Illinois health insurance is mistaken. Or perhaps there is some other factor concerning union membership, political connections or whatever.

Edit: see below

 

[youbet]

Looks like ripper1 may be 90% correct. Google is your friend Debate over insurance premiums for state retirees to resurface - Springfield, IL - The State Journal-Register

Very interesting Midpack, thanks! Looks like something for me to look into. Having DW part of the unfortunate 10% paying medical insurance premiums certainly rubs me the wrong way!

There may also be the issue of retirees who were directly employed by the State of Illinois vs. public employees receiving a pension funded and managed by the State of Illinois but who were not direct state employees. Examples would be teachers, university system employees, etc., who were directly employed by taxing "districts" but who receive their pensions and medical insurance through the state.

And Ripper, my apology. Per the information Midpack provided, it does appear that many retirees that were directly employed by the state do receive free medical insurance as you said. Just not my DW. Darn it.........

 

[youbet]

Also new employees starting in 2012 will be working longer and have a vastly reduced benefit package, so, yes I think Illinois is moving in the right direction. Tell me I am wrong about this too.

Yes, the two tier system is an improvement. But I tend to be cynical about Illinois politics due to the legacy of corruption and mis-management.

It will be many years before the new system has any meaningful impact on pension viability. However, a house bill exists which would change the pensions of current employees to the two tier system bringing some immediate financial relief while offering adequate protection to existing employees. (They can stay on the more generous Tier 1 system by paying a higher premium.) If we can get that passed, there's hope. Otherwise the state is still on a road that leads to an unacceptable percentage of total state revenue being directed to pension payouts.

 

[ERD50]

... However, a house bill exists which would change the pensions of current employees to the two tier system bringing some immediate financial relief ... If we can get that passed, there's hope.

If they can get that passed, I'm assuming there will be a strong attempt to declare it (State of IL) unconstitutional. Some people interpret the IL Constitution as saying that no cuts can be made to pensions of current employees (even applied to future earnings). They got around that by declaring in 2010 that employees hired in 2011 are subject to the new rules. DD got caught by that one.

-ERD50

 

[FinanceDude]

And to think the union folks are recalling our governor here in Wisconsin because instead of 0%. they have to contribute 5.8% of their own pension and 12% of their health premiums.....

 

[youbet]

And to think the union folks are recalling our governor here in Wisconsin because instead of 0%. they have to contribute 5.8% of their own pension and 12% of their health premiums.....

Yes, the Wisconsin recall is interesting and I've been watching with great interest.

I'm trying to find words to say this without causing "the PIG" to shut down the thread since I certainly don't mean for that to happen........

Perhaps the issue is that when necessary changes need to be implemented and those changes involve unions, the changes need to be suggested and implemented by the political party that unions usually support. That's what happened in Illinois. In Wisconsin, you have changes being thrust upon unions by an administration/political party that the unions normally don't support.

 

[ripper1]

Yes, the two tier system is an improvement. But I tend to be cynical about Illinois politics due to the legacy of corruption and mis-management.

It will be many years before the new system has any meaningful impact on pension viability. However, a house bill exists which would change the pensions of current employees to the two tier system bringing some immediate financial relief while offering adequate protection to existing employees. (They can stay on the more generous Tier 1 system by paying a higher premium.) If we can get that passed, there's hope. Otherwise the state is still on a road that leads to an unacceptable percentage of total state revenue being directed to pension payouts.

Yes, it is HB512, and it needs to pass. I'm willing to take a haircut. A lot of retirees and current employees I know are also willing to make sacrifices. It is these union officials or lobbyists that are trying to block this.

 

[ziggy29]

Yes, the two tier system is an improvement.

Except for the intergenerational squabbles and resentment it may create when new hires are made to feel like "second class citizens" compared to those grandfathered into the sweetheart deals.

I suppose that will be duplicated with SS and Medicare before too long. And the longer the powers that be kick the can down the road, the more lopsided that "bifurcated benefits plan" will become.

 

[ripper1]

And to think the union folks are recalling our governor here in Wisconsin because instead of 0%. they have to contribute 5.8% of their own pension and 12% of their health premiums.....

Here we go again another state where the employees contribute nothing to their benefits. This is not sustainable. City of Chicago employees contribute 8.5% to 9.5% to their pensions.

 

[ripper1]

The new legislation that is proposed would double Chicago employees contributions toward pension if they want to stay in their current format with existing benefits.

 

[frank]

I think it is only right that these people should contribute to their health care and pensions. Who among us hasn't?

 

[FinanceDude]

Here we go again another state where the employees contribute nothing to their benefits. This is not sustainable. City of Chicago employees contribute 8.5% to 9.5% to their pensions.

I think going from 0% paid towards anything to 5.8% for pension and about 12% is fair. After all, the taxpayers still pay 94.2% of the pension and 88% of their healthcare............

 

[Midpack]

Here we go again another state where the employees contribute nothing to their benefits. This is not sustainable. City of Chicago employees contribute 8.5% to 9.5% to their pensions.

Don't know how widespread it is, but this 'employee contribution' could be window dressing to appease taxpayers if the pensions are outlandish. There is no way any city employee should have a pension of $500K/yr - none. Again, I don't know for sure but IL is well known for political shenanigans. Not sure Chicago is a good example to use...corruption there is legendary even today. Providence probably has nothing on Chicago...

Chicago union officials face criminal probe over city pensions - Chicago Tribune

At least eight union officials named in the subpoena who either receive city pensions or are eligible for them also earned credit in union pension funds for the same period of work, despite a state law that was supposed to prevent that. The joint investigation found that some of those labor leaders were participating in up to three pension funds at the same time, accruing retirement benefits that reached as high $500,000 a year.