"What he has no right to is a guarantee of fixed payments for life based on his final salary -- regardless of how his investments actually performed. Sorry. His pension should pay out exactly what's in the trust fund, nothing less, nothing more."
I remember the State of WA (who I do not work for) had two PERS systems and two TRS systems. PRES & TRS one allowed a person to retire after 30 years or 55 at 2% per year of their last 2 years. Then they figured out people were playing the system with overtime, vacation leave cash-out, etc and changed to a PERS & TRS 2 system that made you work until you are 65, 2 % per year, average of the last five years base salary (no overtime and no leave cash out).
However, during our group period, including the Dot.com and building booms, everyone in the private sector willing to work at it were and invest were making a fortune and retiring in their late forties, early fifties and were making 2 to 3 times the public sector employee. I know as I flagged traffic for the State while going to school and the contractors we worked for had flaggers making just over 2 1/2 times we were. Same training, same test, same card.
Well, some of the public employees didn't like having to work until 65 when their friends were all retiring in their early 50 who in the private sector and were able to invest their money the way they wanted too. So, they petitioned the Legislature for a new plan. They came up with PERS & TRS 3 were 1/2 of all contributions were invested according to how the participants wanted it to be. Just like a 401. Anyone could transfer in from the other two systems with a certain cash bonus balance. Several did and all new hired have to join.
Well, guess what, the bubble popped and now most think it is sour grapes. Kind of like what I am hearing here. I work for an electrical Utility (you know, the guys that are out their in the rain, snow, lightning trying to restore you power when it goes out so you can sit in your warm house and post on the internet) and have to contribute to the PERS system. My contribution rates go up and down depending on the expected cost of the payout. The big problem is our Democrat Government has seen fit to rob the actual cash in the pension fund and spend it on the non-producers of the state. I could go on but unlike yesterday where I took some time off, I have to go to work today.
<< <i>I risked my life for 10 yrs on submarines >>
You should had stayed on the subs. One guy who works for us retired after 20 years and his pension is really good. But, I don't know what you did on the subs, he is a "plaque holder" on the Tridents.
I want every penny from SS I can get! Will I get any? Seriously doubt it
I do know & see how many folks in my neck of the woods rely on a SS check. Heck if grandma who's raising her grandchildren and children had to move back home because of all the cotton mills shut down to move to 3rd world slave labor country's. Was not getting her check well.....!
In 1999 we all had jobs 2011 we do not! In 1933 we had a "New Deal". Someone needs to wake up and get this country back to work. JMHO.
<< <i>Phil you do know you are whinning right? You are so caught up it what's fair. Life is not fair. You act as if you would be the only one effected by this. You know what's going down. You made the decision to be a fireman. No one twisted your arm. It's not 1999 anymore.
No, you are not bankrupting the system. The system is already bankrupt.
Default is the new mulligan. I would prepare for it.................When a deal is unsustainable it gets broken. It doesn't go on forever. I'm sorry but that's the way it works. You see it every day and it's a terrible shame.
Odds are you are going to get screwed. Most of us will be. We can have a pity party.
MJ >>
Yup, promises, schmomishes.
Unsustainable----definition: not able to be maintained or supported in the future, esp. without causing damage or depletion of a resource.
It is obvious that the system has created a depletion of resources and will/has cause(d) damage. The quicker, we the people, realize this the quicker we will resolve the problems. The demands of 14% of the population dictated the lives of the other 86%. This is unsustainable and will be reversed. Of this I have no doubt.
What I find interesting is the unsustainability was obvious 70 years ago. From Wikipedia regarding Social Security----"The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938 and 1939 she paid a total of $24.75 into the Social Security System. Her first check was for $22.54. After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92."
Gecko, I believe based on your stated salary and contribution amounts, you contribute about $11,000 per year into your retirement. If you contibute that amount for 30 years --from age 23 to 53--and it grows at 6% per year you will have almost $1 million. Thats awesome for you and im happy. But, if you withdraw 80% of your salary in retirement (assuming your salary does not increase from current levels--a bad assumption)--but to keep it simple and illustrate--even if your investment grows at 6%, you will run out of money in 16 years. So you might say you need to get paid more to build your retirement, but others will say, "we paid you handsomely for 30 years and you built up $1 million in savings. Thank you for your service. Please make your money last and dont ask us for more."
<< <i>Default is the new mulligan. I would prepare for it.................When a deal is unsustainable it gets broken. It doesn't go on forever. I'm sorry but that's the way it works. You see it every day and it's a terrible shame. >>
Inflation is the answer in reducing those future obligations as long as the presses are working. >>
Actually inflation increases the obligations. Giving people more money (running the printing presses) does not make the cost of their obligations go down. This is where the Unions are messed up as they believe they will have a better standard of living if they get paid more, when in fact those salary increases only make the costs of goods and services go higher. So they have not gained anything. And in reality, the 7 of 8 people who did not see their salaries rise--not union employees-- are still faced with the higher costs of goods and services. And all taxpayers are subject to the increased entitlement and benefit packages bestowed to those union workers.
What you describe is the system as it has been for the past 80 years. I will point to the definition of unsustainable in the above post.
<< <i> authored by the "former Chairman of Princeton Economics, Ltd"
Nice name of a company, not Princeton University, despite the similar name.
I don't know that anyone thought otherwise. You might want to read his bio. He's apparently pretty good at what he does. >>
He is out of prison now.... >>
Enemy of the state, Friend of the people
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I like the dollar. It can buy nearly anything I have ever dreamed of or wanted.
But just my inability to control my assets in dollars is what I have a problem with. So what I did......without actually planning for it....was keep most of my assets in underperforming collectibles and real estate that move in value directly proportional to the demographics of this country and keeping an eye out on the foriegn demo also. In addition, I had a regular job.
Sometimes you get lucky and stumble on a little plan that pays off. Sometimes you really have to exhaust a lot of possibilities until things start to work. But one common denominator in everything I have ever done is that to do well at it, you have to work at it.
Stacking silver and gold doesn't require much effort or imagination so I never thought it was worth more than 10-20% of my LIQUID assets. Allowing other people to control my paper assets never appealed to me. Buying R1 right now may only be a good idea if you personally need a roof over your head. Buying R3 right now may only pencil out if you're in a 1031. Buying Commercial RE right now may be disastrous until absorbtion rates start to firm up.
As I see it...right now...there are only two options 1. Locating and liquidating excess inventory or assets through voluntary sale or involuntary conversion----and
2. turning those profits into well located, fertile crop land with a minimum 5 - 7 yr hold.
So, those Romans diluted the money to pay for the ever-growing public debt, due to progressively inflated entitlement expectations?
Let's hope we have the sense to reign it back in.
Honor the letter of the contracts made in the past, and inflate the dollar quite a bit to help, as necessary. (how many dollars did we say? hee hee)
and ffsake, stop making such excessive promises in the future... no matter the job, it's hard to justify working for 2 or three decades and getting paid 4 or 5 more decades at 60 or 70%
edit: and learn another thing from those wise Romans... bury some urns of gold and silver coins... but this time, dig them up and live it up before ya die!
<< <i>So, those Romans diluted the money to pay for the ever-growing public debt, due to progressively inflated entitlement expectations?
Let's hope we have the sense to reign it back in.
! >>
Nah, everything is beautiful in the good ol' USA. California is doing great, so is Connecticut, New Jersey, New York, and Washington DC. Social Security is doing great. We've got tons of extra in that system. The post office is doing great too. 50% of Americans couldn't come up with 2,000.00 if they had to. Many are underwater with their mortgages. But don't worry, we'll just keep printing money because we're doing so well.
The pension system has been in place for 6 decades or longer......and even as recently as 2006, nobody complained that it was broken. It was only AFTER you guys took hits on housing and employment that yolu now want me to suffer. Sour grapes pal.
I'm sure that makes you feel better, but for the record my pension was destroyed in 1992 and I have several relatives who had pension problems in the 1980's. 401k's were popular... before 2006, that is... for a reason.
<< <i>The pension system has been in place for 6 decades or longer......and even as recently as 2006, nobody complained that it was broken. It was only AFTER you guys took hits on housing >>
I have no problem with public pension promises until they start costing me more in taxes or less in services because the promise were made can no longer be kept. Now that the system is broken, put me on the list of complainers. No housing hit here - the reduction in appraised value of my home is saving me on property tax. That fact that I would have to sell if for less is irrelevent because its replacement would cost me proportionately less.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Illinois leads the way in buying the votes of public employee unions with taxpayer dollars:
From the Illinois Policy Institute on the 2012 state budget -
"$4,037,500: Upward Mobility Program
Available only to state employees who are union members represented by the American Federation of State, County and Municipal Employees, or AFSCME, the Upward Mobility Program pays 100 percent of tuition costs at public institutions and a set amount per credit hour at select private universities. Participants can also receive financial assistance to pay for textbooks, fees, proficiency tests, remedial classes, licensure review classes and licensure examinations. After completing the program state employees are given “special consideration in the filling of vacancies” of targeted state job titles.
Illinois is in the midst of a massive budget crisis. Workers who hold state positions in Illinois already are well paid, receive generous benefits and enjoy high job security. Illinois needs to prioritize spending on core government services over union perks."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
The state's unfunded liability is more than three times annual payroll costs.[2]
The pension systems generally get their money from three sources: the state, employees covered by the systems and investment income.[1] TRS also gets money from local school districts.[1]
Illinois has the worst funded pension system in the United States. [3] The Pew Center for the States reported that as of 2008, Illinois is one of the worst states at contributing to its pension systems. If Illinois' elected leaders do not address the state's pension woes, the bulk of the state's budget will have to be used to pay for the pensions rather than go towards education or social programs. [4] In 2011 the Pew Center updated its report showing Illinois sets aside only 51 cents for every dollar it has promised to pay out. [5] There is no danger that Illinois' retired teachers, state employees and university staff will stop getting their pension checks. But the state eventually will have to come up with billions of dollars or find a way to reduce pension costs. [6]
Illinois is facing a crisis with its publicly funded pensions. In 2010 state government was responsible for over $130 billion in pension payments, however they only had $46 billion set aside, which leaves an unfunded liability of about $85 billion. [7] In fiscal years 2006 and 2007, the state was supposed to contribute $4.6 billion to the pension systems. Instead, legislators changed the law to pay only $2.3 billion. [8]
My Analysis - Illinois is the most corrupt state, using more taxpayer money than any other state to buy union votes.
Q: Are You Printing Money? Bernanke: Not Literally
Comments
I remember the State of WA (who I do not work for) had two PERS systems and two TRS systems. PRES & TRS one allowed a person to retire after 30 years or 55 at 2% per year of their last 2 years. Then they figured out people were playing the system with overtime, vacation leave cash-out, etc and changed to a PERS & TRS 2 system that made you work until you are 65, 2 % per year, average of the last five years base salary (no overtime and no leave cash out).
However, during our group period, including the Dot.com and building booms, everyone in the private sector willing to work at it were and invest were making a fortune and retiring in their late forties, early fifties and were making 2 to 3 times the public sector employee. I know as I flagged traffic for the State while going to school and the contractors we worked for had flaggers making just over 2 1/2 times we were. Same training, same test, same card.
Well, some of the public employees didn't like having to work until 65 when their friends were all retiring in their early 50 who in the private sector and were able to invest their money the way they wanted too. So, they petitioned the Legislature for a new plan. They came up with PERS & TRS 3 were 1/2 of all contributions were invested according to how the participants wanted it to be. Just like a 401. Anyone could transfer in from the other two systems with a certain cash bonus balance. Several did and all new hired have to join.
Well, guess what, the bubble popped and now most think it is sour grapes. Kind of like what I am hearing here. I work for an electrical Utility (you know, the guys that are out their in the rain, snow, lightning trying to restore you power when it goes out so you can sit in your warm house and post on the internet) and have to contribute to the PERS system. My contribution rates go up and down depending on the expected cost of the payout. The big problem is our Democrat Government has seen fit to rob the actual cash in the pension fund and spend it on the non-producers of the state. I could go on but unlike yesterday where I took some time off, I have to go to work today.
<< <i>I risked my life for 10 yrs on submarines >>
You should had stayed on the subs. One guy who works for us retired after 20 years and his pension is really good. But, I don't know what you did on the subs, he is a "plaque holder" on the Tridents.
<< <i>In my town, most of the firefighters are volunteers who don't retire set for life at 53. >>
And I bet you are one on them or is the work to hard?
<< <i>
authored by the "former Chairman of Princeton Economics, Ltd"
Nice name of a company, not Princeton University, despite the similar name.
I don't know that anyone thought otherwise. You might want to read his bio. He's apparently pretty good at what he does. >>
He is out of prison now....
I do know & see how many folks in my neck of the woods rely on a SS check. Heck if grandma who's raising her grandchildren and children had to move back home because of all the cotton mills shut down to move to 3rd world slave labor country's. Was not getting her check well.....!
In 1999 we all had jobs 2011 we do not! In 1933 we had a "New Deal". Someone needs to wake up and get this country back to work. JMHO.
<< <i>Phil you do know you are whinning right? You are so caught up it what's fair. Life is not fair. You act as if you would be the only one effected by this. You know what's going down. You made the decision to be a fireman. No one twisted your arm. It's not 1999 anymore.
No, you are not bankrupting the system. The system is already bankrupt.
Default is the new mulligan. I would prepare for it.................When a deal is unsustainable it gets broken. It doesn't go on forever. I'm sorry but that's the way it works. You see it every day and it's a terrible shame.
Odds are you are going to get screwed. Most of us will be. We can have a pity party.
MJ >>
Yup, promises, schmomishes.
Unsustainable----definition: not able to be maintained or supported in the future, esp. without causing damage or depletion of a resource.
It is obvious that the system has created a depletion of resources and will/has cause(d) damage. The quicker, we the people, realize this the quicker we will resolve the problems. The demands of 14% of the population dictated the lives of the other 86%. This is unsustainable and will be reversed. Of this I have no doubt.
What I find interesting is the unsustainability was obvious 70 years ago. From Wikipedia regarding Social Security----"The first monthly payment was issued on January 31, 1940 to Ida May Fuller of Ludlow, Vermont. In 1937, 1938 and 1939 she paid a total of $24.75 into the Social Security System. Her first check was for $22.54. After her second check, Fuller already had received more than she contributed over the three-year period. She lived to be 100 and collected a total of $22,888.92."
Gecko, I believe based on your stated salary and contribution amounts, you contribute about $11,000 per year into your retirement. If you contibute that amount for 30 years --from age 23 to 53--and it grows at 6% per year you will have almost $1 million. Thats awesome for you and im happy. But, if you withdraw 80% of your salary in retirement (assuming your salary does not increase from current levels--a bad assumption)--but to keep it simple and illustrate--even if your investment grows at 6%, you will run out of money in 16 years. So you might say you need to get paid more to build your retirement, but others will say, "we paid you handsomely for 30 years and you built up $1 million in savings. Thank you for your service. Please make your money last and dont ask us for more."
Knowledge is the enemy of fear
<< <i>
<< <i>Default is the new mulligan. I would prepare for it.................When a deal is unsustainable it gets broken. It doesn't go on forever. I'm sorry but that's the way it works. You see it every day and it's a terrible shame. >>
Inflation is the answer in reducing those future obligations as long as the presses are working.
Actually inflation increases the obligations. Giving people more money (running the printing presses) does not make the cost of their obligations go down. This is where the Unions are messed up as they believe they will have a better standard of living if they get paid more, when in fact those salary increases only make the costs of goods and services go higher. So they have not gained anything. And in reality, the 7 of 8 people who did not see their salaries rise--not union employees-- are still faced with the higher costs of goods and services. And all taxpayers are subject to the increased entitlement and benefit packages bestowed to those union workers.
What you describe is the system as it has been for the past 80 years. I will point to the definition of unsustainable in the above post.
Knowledge is the enemy of fear
<< <i>
<< <i>
authored by the "former Chairman of Princeton Economics, Ltd"
Nice name of a company, not Princeton University, despite the similar name.
I don't know that anyone thought otherwise. You might want to read his bio. He's apparently pretty good at what he does. >>
He is out of prison now.... >>
Enemy of the state, Friend of the people
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
I'm going to go out on a limb here... and suggest you never work in the Energy industry.
<< <i>I find it very offensive when people incorrectly throw me and my buddies under the bus even though the FACTS prove otherwise. >>
We need to change this to "throw me and my buddies under the chariot", based on the original article.
Everyone's invited!
I knew it would happen.
But just my inability to control my assets in dollars is what I have a problem with. So what I did......without actually planning for it....was keep most of my assets in underperforming collectibles and real estate that move in value directly proportional to the demographics of this country and keeping an eye out on the foriegn demo also. In addition, I had a regular job.
Sometimes you get lucky and stumble on a little plan that pays off. Sometimes you really have to exhaust a lot of possibilities until things start to work. But one common denominator in everything I have ever done is that to do well at it, you have to work at it.
Stacking silver and gold doesn't require much effort or imagination so I never thought it was worth more than 10-20% of my LIQUID assets. Allowing other people to control my paper assets never appealed to me. Buying R1 right now may only be a good idea if you personally need a roof over your head. Buying R3 right now may only pencil out if you're in a 1031. Buying Commercial RE right now may be disastrous until absorbtion rates start to firm up.
As I see it...right now...there are only two options
1. Locating and liquidating excess inventory or assets through voluntary sale or involuntary conversion----and
2. turning those profits into well located, fertile crop land with a minimum 5 - 7 yr hold.
rhodium holding at $18xx
Let's hope we have the sense to reign it back in.
Honor the letter of the contracts made in the past, and inflate the dollar quite a bit to help, as necessary. (how many dollars did we say? hee hee)
and ffsake, stop making such excessive promises in the future... no matter the job, it's hard to justify working for 2 or three decades and getting paid 4 or 5 more decades at 60 or 70%
edit: and learn another thing from those wise Romans... bury some urns of gold and silver coins... but this time, dig them up and live it up before ya die!
Liberty: Parent of Science & Industry
<< <i>So, those Romans diluted the money to pay for the ever-growing public debt, due to progressively inflated entitlement expectations?
Let's hope we have the sense to reign it back in.
! >>
Nah, everything is beautiful in the good ol' USA. California is doing great, so is Connecticut, New Jersey, New York, and Washington DC.
Social Security is doing great. We've got tons of extra in that system. The post office is doing great too. 50% of Americans couldn't come up with 2,000.00 if they had to. Many are underwater with their mortgages. But don't worry, we'll just keep printing money because we're
doing so well.
I'm sure that makes you feel better, but for the record my pension was destroyed in 1992 and I have several relatives who had pension problems in the 1980's. 401k's were popular... before 2006, that is... for a reason.
<< <i>The pension system has been in place for 6 decades or longer......and even as recently as 2006, nobody complained that it was broken. It was only AFTER you guys took hits on housing >>
I have no problem with public pension promises until they start costing me more in taxes or less in services because the promise were made can no longer be kept. Now that the system is broken, put me on the list of complainers. No housing hit here - the reduction in appraised value of my home is saving me on property tax. That fact that I would have to sell if for less is irrelevent because its replacement would cost me proportionately less.
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
From the Illinois Policy Institute on the 2012 state budget -
"$4,037,500: Upward Mobility Program
Available only to state employees who are union members represented by the American Federation of State, County and Municipal Employees, or AFSCME, the Upward Mobility Program pays 100 percent of tuition costs at public institutions and a set amount per credit hour at select private universities. Participants can also receive financial assistance to pay for textbooks, fees, proficiency tests, remedial classes, licensure review classes and licensure examinations. After completing the program state employees are given “special consideration in the filling of vacancies” of targeted state job titles.
Illinois is in the midst of a massive budget crisis. Workers who hold state positions in Illinois already are well paid, receive generous benefits and enjoy high job security. Illinois needs to prioritize spending on core government services over union perks."
"Interest rates, the price of money, are the most important market. And, perversely, they’re the market that’s most manipulated by the Fed." - Doug Casey
Illinois has the worst funded pension system in the United States. The Pew Center for the States reported that as of 2008, Illinois is one of the worst states at contributing to its pension systems.
The state's unfunded liability is more than three times annual payroll costs.[2]
The pension systems generally get their money from three sources: the state, employees covered by the systems and investment income.[1] TRS also gets money from local school districts.[1]
Illinois has the worst funded pension system in the United States. [3] The Pew Center for the States reported that as of 2008, Illinois is one of the worst states at contributing to its pension systems. If Illinois' elected leaders do not address the state's pension woes, the bulk of the state's budget will have to be used to pay for the pensions rather than go towards education or social programs. [4] In 2011 the Pew Center updated its report showing Illinois sets aside only 51 cents for every dollar it has promised to pay out. [5] There is no danger that Illinois' retired teachers, state employees and university staff will stop getting their pension checks. But the state eventually will have to come up with billions of dollars or find a way to reduce pension costs. [6]
Illinois is facing a crisis with its publicly funded pensions. In 2010 state government was responsible for over $130 billion in pension payments, however they only had $46 billion set aside, which leaves an unfunded liability of about $85 billion. [7] In fiscal years 2006 and 2007, the state was supposed to contribute $4.6 billion to the pension systems. Instead, legislators changed the law to pay only $2.3 billion. [8]
My Analysis - Illinois is the most corrupt state, using more taxpayer money than any other state to buy union votes.
I knew it would happen.