Chapter 11 for Public Pension Plan Marianas Islands

RedTiger

To me this seems like significant news, worthy of its own thread. The implications for the metals markets are significant, though complicated. I can not find this news on the major general news sites, or business news sites. I did verify it via two separate sources, so it does seem to have credibility.

The Northern Mariana Islands are a U.S. commonwealth consisting of three major islands in the Western Pacific. The pension fund holds $268.4 million in assets, with $911 million in liabilities. (Sounds similar to ratios in much bigger pension funds, private and public.) I don't know about the claim about being the first bankruptcy in the 2nd link. If it is the first, they may set legal precedents as lawsuits are likely to follow.

http://www.rnzi.com/pages/news.php?op=read&id=67594
link1

http://www.pionline.com/article/20120419/REG/120419842/in-apparent-first-a-public-pension-plan-files-for-bankruptcy
link2


>> from link1
There has been anger and panic following a bankruptcy petition filed for the Northern Marianas Islands Retirement Fund.

The CNMI’s pension programme has been on the verge of collapse and has been projected to last only to about 2014 if no solution is identified.

Our correspondent, Mark Rabago, says the chapter 11 bankruptcy petition is intended to re-organise the fund so it can better function, and to extend the life of the fund.
>>

This news event can stand on its own. The sky hasn't fallen, but it does probably mean that payouts will be lower, possibly a lot lower than was promised.

cohodk

I think you will see a lot more of this but not sure it is really HUGE news. In a way this is just forced austerity. If people dont want to voluntarily contribute more and accept less benefits, then is will be forced upon them. One way or the other, the "promises" that were made to the civil unions will be broken. A bankruptcy is great way to accomplish this. In reality, the same thing happened to the GM pension plan, which is much larger than the Marianas Islands.

It is possible that could even be viewed as a negative for metals as reduced future spending (entitlements) leads to lower growth and disinflation. Maybe the FED continues to print, print, print to balance, but market forces are very strong.

Baley

IMO, we're going to see a lot more "means testing" to see if someone still qualifies for the pension, benefits, and social security, and other entitlements that were meant to be safety nets and not to further pad the enormous accounts and budgets of really wealthy people at the expense of the younger general public

derryb

A few US municipalities have discovered that bankruptcy can remove their outrageous pension promises. Look for more cities to do the same.

MISH discusses public sector unions and their stranglehold on municipalites

golfer72

Yeah a lot of cities and states ( and the US as a whole ) are already bankrupt they just have not officially declared it yet.

golfer72

The party is over. All these ridiculous public pensions that get padded just before retirement by overtime have come home to roost. There is no way these pensions can get paid. Greed and outright fraud by the unions and their members has toppled the system. They say they dont want to give anything back? Declare bankruptcy and give them nothing.

Baley

good post golfer

they're going to game the system to death

derryb

<< <i>Greed and outright fraud by the unions and their members has toppled the system. They say they dont want to give anything back? Declare bankruptcy and give them nothing. >>


let's not forget those that bought their votes with tax dollars.

cohodk

<< <i>The party is over. All these ridiculous public pensions that get padded just before retirement by overtime have come home to roost. There is no way these pensions can get paid. Greed and outright fraud by the unions and their members has toppled the system. They say they dont want to give anything back? Declare bankruptcy and give them nothing. >>




I love these websites, just wish more people knew about them.

Not to pick on any particular person, but the job title of #58 looked interesting. Not sure if this included benefits such as retirement or health insurance. Not a bad income--50% above the national average--for an "asphalt helper". Im sure that position required a 4yr degree.


Have fun searching.Chicago salaries

5008 people work for the fire department or emergency services. Thats more than 2x the entire population of my town!!


This is a good one also. Check out the annual pensions of New York State retirees here