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Old 01-28-2017, 10:33 AM   #41
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Pensions? My megacorp pension disappeared 20 years ago.
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Old 01-28-2017, 10:39 AM   #42
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Deep breath. Count to 10.... OK

Quote:
Originally Posted by Sandman62 View Post
Then suck it up and cut spending, as well as raise taxes - whatever it takes to pay the bills incurred. But it shouldn't be an option to just not pay contracted debt. ...

Do I get to stiff my plumber when his bill comes in after his work is completed?

...
But there was and is a contract. And the contract says that if the employer can't pay, there is some insurance coverage from the PBGC (as we said earlier, complicated and different between multi and single employer plans). The contract does not say they can go to the taxpayer. What about the taxpayer's contract?

It's not the same as you deciding to 'stiff a plumber'. If you have the money you are obligated to pay. These companies don't have the money to fully fund the pensions. If they keep paying the full amount, they will run out, and then they younger members will get stiffed BIG TIME, as in zero $, because it all got used up by the people who retired earlier.

Back to your plumber. If you don't have the money, he/she has legal options. That's what you do. That's what these pensions are doing. The plumber can put a lien on the house, or maybe it goes to bankruptcy court, and they get 10 cents on the dollar or something. The plumber is not going to go to your neighbors and ask them to pay. Would you pay your neighbor's bill?

No one is celebrating that, no one is happy, but when the well runs dry, something has to give. There is no pension fairy.

-ERD50
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Old 01-28-2017, 10:43 AM   #43
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Quote:
Originally Posted by Sandman62 View Post
We should all share in the collective decades-long mistakes made by continuing to elect crooked politicians (redundant?) instead of just stiffing those who've paid into and earned pensions, simply because it annoys the least number of voters (all pols really care about!).

Replace "pension" with SS or 401k taxation or any other income source that most of us have and the screams would be much louder about raiding what's already been earned. But I, for one, have had enough of hearing so many without a government pension just saying "Screw THEM! They never should've had those pensions anyway!"

Full disclosure: My spouse has worked 30+ years as teacher and had some rather drastic changes made to her pension in the last few years. But that doesn't make me biased, it just makes me pay attention to this. Contracts are still contracts, even if one side thinks they can just walk away after the other has upheld their end. That's a terrible precedent to set; it may satisfy the mob majority now (because most don't have govt pensions), but in the future, it could reach much wider.

I have to agree with you at least in part. It's a bad precedent to set and just makes the race to the bottom for the working people that more dangerous. Ultimately, when the protections for other working people have been knocked down the devil will turn on those who thought it was a good idea. They will come after other retirement savings - for example, why not renege on not taxing Roth IRA withdrawals? Or, take part of all of our IRA/401K/403b money (that has been proposed as part of a Federal pension reform law)?

Thomas More: “I’d give the Devil benefit of law, for my own safety’s sake”

OTOH, if a state or city is in a death spiral, then for practical purposes pensioners may have to take a haircut, assuming others do also. How that is worked out is a rat's nest I don't care to think about. But, if they could find a way to repay some of the money stolen by Madoff, then they should be able to find a fair way to 'fix' the problem.

Alas, the current crop of politicians in many states (Illinois for example?) can't even figure out they need to stop digging, much less how to get out of the hole. Very sad.
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Old 01-28-2017, 10:47 AM   #44
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Quote:
Originally Posted by Sandman62 View Post
....
Full disclosure: My spouse has worked 30+ years as teacher and had some rather drastic changes made to her pension in the last few years. ....
If you think you are alone in that, you are not. My MegaCorp made drastic changes to our pension plan as well.There was a different formula for what you earned going forward, someone who retired fully under the old plan did much, much better than someone who retired with say half or all their years under the new plan.



-ERD50
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Old 01-28-2017, 10:49 AM   #45
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Originally Posted by ERD50 View Post
The contract does not say they can go to the taxpayer. What about the taxpayer's contract?
For the sake of argument:

The citizens, and that would include taxpayers, are those who directly benefited from the labor of these public employees. Roads were maintained, students were taught, drivers were licensed, building codes were enforced, etc. etc. etc. Is it right for them to benefit over 30+ years and then renege on the deal because they don't want to pay the true cost of the services they use?

There are no good answers, but there are many moral and legal issues to debate!
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Old 01-28-2017, 10:56 AM   #46
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Originally Posted by Chuckanut View Post
For the sake of argument:

The citizens, and that would include taxpayers, are those who directly benefited from the labor of these public employees. Roads were maintained, students were taught, drivers were licensed, building codes were enforced, etc. etc. etc. Is it right for them to benefit over 30+ years and then renege on the deal because they don't want to pay the true cost of the services they use?

There are no good answers, but there are many moral and legal issues to debate!
I disagree that there are no good answers. We have the answer, it is the contract. As far as I can see, no contract is being violated, it is just that since the funds ran out, they have to go into the contract to follow the next step. We are a nation of laws. Going to the taxpayer if that was not part of the contract would be a contract violation! The law matters.

They didn't renege on the deal. They ran out of funds, and the contract specifies what happens when they run out of funds.

I could give an analogy to the years of service thing, but I gotta run. Thread will likely be closed by the time I can post again, cutting the opportunity to learn more about this situation.

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Old 01-28-2017, 11:11 AM   #47
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And why should I (as a US taxpayer) contribute to bailing out these Ohio workers for mistakes made by those managing their funds? Why not clawback management fees from those who mismanaged the funds? Sorry, but I don't see why taxpayers should pay for this mess.


Full disclosure: I'm a teamster.

Within the last couple of weeks the teamsters multi employer NY pension fund has proposed to its members that they ask for a $1B loan from the gov't. to prop up the fund.

A loan to a pension fund in critical status sounds outrageous and possibly criminal to me. UPS paid $6.3B to the teamsters Central States fund to withdraw from that pension in 2007 and the money was gone in just a few years. Central States pension fund was overseen by a gov't appointee, Goldman Sacs.

What's to prevent a fund from just "defaulting" on a loan because it of continued bad investments. IMO they are all a bunch of crooks.
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Old 01-28-2017, 12:13 PM   #48
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Originally Posted by Sandman62 View Post
Then suck it up and cut spending, as well as raise taxes - whatever it takes to pay the bills incurred. But it shouldn't be an option to just not pay contracted debt. Fix pensions going forward. But it's pretty unfair to put the burden mostly on those who did nothing wrong and held up their end of the bargain.

Do I get to stiff my plumber when his bill comes in after his work is completed?

We should all share in the collective decades-long mistakes made by continuing to elect crooked politicians (redundant?) instead of just stiffing those who've paid into and earned pensions, simply because it annoys the least number of voters (all pols really care about!).

Replace "pension" with SS or 401k taxation or any other income source that most of us have and the screams would be much louder about raiding what's already been earned. But I, for one, have had enough of hearing so many without a government pension just saying "Screw THEM! They never should've had those pensions anyway!"

Full disclosure: My spouse has worked 30+ years as teacher and had some rather drastic changes made to her pension in the last few years. But that doesn't make me biased, it just makes me pay attention to this. Contracts are still contracts, even if one side thinks they can just walk away after the other has upheld their end. That's a terrible precedent to set; it may satisfy the mob majority now (because most don't have govt pensions), but in the future, it could reach much wider.

You got two points running in this post and they are not related IMO...

I agree that we should pay our bills by cutting spending or not cutting taxes... not by new taxes...


HOWEVER, that has zero to do with the pensions that are mentioned.... these are mostly union pensions... there was not a contract between the union and the taxpayer... zip, nada, nothing... it was union leaders who did whatever (theft, bad investments, kickbacks...) or promised way more than what could be delivered with the funds there were getting... I feel sorry for the people who are getting less, but I am not willing to put my tax dollars forward to bail them out...


Now, the public pensions are a different matter... I do think the local taxpayer should come up with some funding since they elected the people that created the mess.... but I also think the pensioners should lose some of what they were promised as they mostly had representation and also allowed it to happen... IOW, their leadership kept asking for more and more benefits but allowed the gvmts to not fund it... so IMO, both sides are 'guilty' and both sides should share in the pain... but another however.... I should not share in the pain caused by the people in Indiana... or California or whatever state or local gvmt is having problems... I should only be responsible for my plans where I live...
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Old 01-28-2017, 12:37 PM   #49
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Originally Posted by ERD50 View Post
Deep breath. Count to 10.... OK



But there was and is a contract. And the contract says that if the employer can't pay, there is some insurance coverage from the PBGC (as we said earlier, complicated and different between multi and single employer plans). The contract does not say they can go to the taxpayer. What about the taxpayer's contract?

It's not the same as you deciding to 'stiff a plumber'. If you have the money you are obligated to pay. These companies don't have the money to fully fund the pensions. If they keep paying the full amount, they will run out, and then they younger members will get stiffed BIG TIME, as in zero $, because it all got used up by the people who retired earlier.

Back to your plumber. If you don't have the money, he/she has legal options. That's what you do. That's what these pensions are doing. The plumber can put a lien on the house, or maybe it goes to bankruptcy court, and they get 10 cents on the dollar or something. The plumber is not going to go to your neighbors and ask them to pay. Would you pay your neighbor's bill?

No one is celebrating that, no one is happy, but when the well runs dry, something has to give. There is no pension fairy.

-ERD50
Ok, so as often happens with analogies, they easily fall apart. Let's say the plumber was hired by the CITY to repair a public facility. Can the city tell the plumber they don't want to pay? Or would they have to put the cost on ALL citizens?

And I'm not sure that all companies or states would go under if they were forced to pay their pension obligations? Maybe they'd just have to trim the fat quite a bit - reduce overbloated departments. Probably also cut back on desired spending on roads and other public services.

I get it though, that for many public pensions, it's easier to rile up citizens against paying the full contracted pension amounts than it is to spread the cost out more evenly among ALL citizens. It buys more votes.

Here's an example that really ticks me off... in RI, where Queen Raimondo was elected as governor largely due to promising to rob (oops, "reform") pensioners. Her cry was how broke the state was. Here we are a few years later, and now she wants to offer free college (2 years) to all residents, claiming "We have the money, so why not use it?". Really?! If we have the money, why not give back what was stolen from pensioners and state workers? Again, IMO, because LOTS of RI residents can take advantage of free college and will like that, whereas only those who receive state pensions can receive [their contractually-earned!] benefits. Ugh!
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Old 01-28-2017, 12:41 PM   #50
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Originally Posted by ERD50 View Post
If you think you are alone in that, you are not. My MegaCorp made drastic changes to our pension plan as well.There was a different formula for what you earned going forward, someone who retired fully under the old plan did much, much better than someone who retired with say half or all their years under the new plan.

-ERD50
I hear ya. My MegaCorp changed our plan about halfway through my career too. But they locked in what we'd earned til then, and only changed it going forward. I'll still get almost 60% (non-COLA) of my final salary amount when I retire later this year, and I never paid a dime for it, so I can't complain.

But in RI, taking away already-retired people's COLAs just seems so morally wrong (doesn't affect us, as my wife isn't yet retired). But picture little ol' grandma who is 80 years old and been retired 25+ years now having the rug pulled out from under her like that? Geez.
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Old 01-28-2017, 01:41 PM   #51
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Thanks for the interesting discussion.

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