Pension Systems on the Brink?

Leo Kolivakis's picture

Submitted by Leo Kolivakis, publisher of Pension Pulse.

Robert Powell, editor at Retirement Weekly, wrote an editorial for MarketWatch on pension systems on the brink:

train wreck waiting to happen. That's the only way to describe the mess
that state pension systems are in right now, according to a report
published today by the Pew Center on the States. According to Pew, there's a $1 trillion gap
between the $3.35 trillion in pension, health care and other retirement
benefits states promised their current and retired workers as of fiscal
year 2008 and the $2.35 trillion they have on hand to pay them.


worse, the gap may be even higher given that the study was conducted
prior to the market collapsing in 2008 and given the way most states
allow for smoothing of investment gains and losses over time.


How did this come to pass? And more importantly, what can be done to solve it?

Investment losses account for part of the funding gap. But the bigger
problem, according to Pew, is that many states simply fell behind on
their payments to cover the cost of promised benefits -- and that was
even before the Great Recession.


"Many states
shortchanged their pension plans in both good times and bad, and only a
handful have set aside any meaningful funding for retiree health care
and other non-pension benefits," Susan Urahn, managing director of the
Pew Center on the States, wrote in her report.


now, state policy makers who ignore the current shortfall do so at
their own peril. Indeed, states that fail to address under-funded
retirement systems face the very real possibility of raising taxes or
taking taxpayer money that could be used for education, public safety,
and other necessary services just to pay public-sector retirement
benefit obligations.


To be fair, not all states are
in the same pickle. Illinois and Kansas are in really bad shape. Those
states each have less than 60% of the necessary assets on hand to meet
their long-term pension obligations, Pew said. Illinois is in the worst
shape of any state, with a funding level of 54% and an unfunded
liability of more than $54 billion. Meanwhile, nine states had pensions
funded above 90% and Florida, Idaho, New York, North Carolina and
Wisconsin all entered the current recession with fully funded pensions.


Most experts suggest
at least an 80% percent funding level. Pew found that 21 states were
funded below that recommended level in 2008. Of those 21, eight had
more than one-third of the total liability unfunded: Connecticut,
Illinois, Kansas, Kentucky, Massachusetts, Oklahoma, Rhode Island, and
West Virginia.


In all, Pew said just 16 states are "solid performers"; meanwhile, 19 are in serious trouble.

Other benefits pose similar problems

As for retiree health care and non-pension benefits, Pew said that's
another huge bill coming due. In fact, the total needed to pay for
current and future benefits is $587 billion. Unfortunately, only $32
billion -- or just over 5% of the total cost -- was funded as of fiscal
year 2008. Half of the states account for 95% of the liabilities. As
with pension funding, some states are worse off than others.


"Only two states had more than 50% of the assets needed to meet their
liabilities for retiree health care or other non-pension benefits:
Alaska and Arizona," Pew said. "Only four states contributed their
entire actuarially required contribution for non-pension benefits in
2008: Alaska, Arizona, Maine and North Dakota."

Bridging the gap

What can be done to make up the $1 trillion gap? In a word, reform. Not
extreme reform. Rather, reform that brings the public sector more in
line with the private sector. Here's what Pew recommends:

1. Keep up with funding requirements

According to Pew, generally, the states in the best shape are those
that have kept up with their annual funding requirements in both good
and bad times. Arizona and Connecticut are required to fully fund their
obligations. But that's just part of the battle.

"States also need to make sure the assumptions used in calculating the
payment amount are accurate -- for example, estimating the lifespan of
retirees or the investment returns they expect." For instance, many
states based their assumptions on investment returns of more than 8%.
By contrast, the top 100 private pension plans had an average assumed
investment return of 6.36% as of December 2008.


some states, Utah and Pennsylvania among them, are reducing the
assumptions on investment returns. But more states need to address
funding requirements and investment return assumptions.

2. States should reduce benefits or increase the retirement age

Most states can't reduce pensions for retirees or current employees,
but they can for new employees. And that's exactly what several states
are doing now. According to Pew's report, Nevada, New York and Rhode
Island recently reduced benefits for new employees either by altering
the pension formula or raising retirement ages. More states need to
examine and consider this tactic.

3. States should share the risk with employees

A few states, the Pew report notes, have taken a page out of the
private sector's pension world. They are "sharing more of the risk of
investment loss with employees by introducing benefit systems that
combine elements of defined-benefit and defined-contribution plans,"
the report said. "These hybrid systems generally offer a lower
guaranteed benefit, while a portion of the contribution -- usually the
employees' share -- goes into an account that is similar to a private
sector 401(k)."


Nebraska and Georgia have hybrid
plans in place for new employees, while Michigan and Alaska have 401(k)
plans in place for new workers. But movement away from defined-benefit
plans to defined-contributions plans is easier said than done. "Because
unions and other employee representatives often have vigorously opposed
defined-contribution plans, it is unclear whether any state will find
such a switch viable, or if such plans are primarily being proposed as
a starting point for hybrid plans or other compromises," the Pew report

4. Increase employee contributions

Employees already contribute about 40% of non-investment contributions
to their own retirement. "But states are looking toward their workers
to pay for a larger share," the Pew report noted. "In many states, the
employee contribution is fixed at a lower rate than the employer
contributions." But some states have put in place reforms to change
that. Arizona, for instance, has a system where employee and employer
contribute the same amount. And other states, such as Iowa, Minnesota
and Nebraska, have the ability to raise employee pension contributions
if needed.


What's more, Pew noted that several states
also began asking employees and retirees to start making contributions
for their retiree health-care benefits -- just as happened with
retirees from the private sector.

5. Improve governance and investment oversight

In recent years, Pew noted that "some states have sought to
professionalize the complex task of pension investments by shifting
oversight away from boards of trustees to specialized bodies that focus
on investment." Other states have worked on making sure boards of
trustees for pensions are well trained, that the division of
responsibilities between board and staff makes sense, and that the
composition of the board is balanced between members of the system and
individuals who are independent of it. States being praised for reforms
in the right direction include Vermont, Oregon, and even Illinois.


To be fair, states aren't standing still when it comes to reform.
According to Pew, 15 states passed legislation to reform some aspect of
their state-run retirement systems in 2009, compared with 12 in 2008
and 11 in 2007. Still, it would seem that more need to get on the
reform bus. Especially given the alternative.


In the
absence of paying down this $1 trillion deficit, Pew said the debt will
increase even more significantly. "This will leave the states, and
tomorrow's taxpayers, in even worse shape, since every dollar needed to
feed that growing liability cannot be used for education, health care
or other state priorities," the Pew report said.

You can read the Pew report by clicking here. You can also read Mike Shedlock's analysis of this report, by clicking here.

do not plan on going into great details on this report as its findings
didn't surprise me. Instead, I want my readers to keep in mind of
certain basics governing pension funding:

  • First, pensions are not just about assets, they are there to meet future liabilities. In other words, it's all about asset-liability matching.
    This is important because while pension fund managers try to "shoot the
    lights out", often taking excessive risks to meet their actuarial rates
    of return (which are way too high), they expose funds to serious
    downside risk.
  • Second, there is a growing gap between public
    sector pensions and private sector pensions that is fueling anger and
    discontent out there. In an era of fiscal deficits, there will be
    increasing pressure to reign in all benefits, including public sector
    pensions. is this justified? In some cases, yes, but in other cases no.
    Governments will use any excuse to reign in public sector pensions but
    they allowed this situation to spiral out of control.
  • Third, and most importantly, governance matters.
    I can't stress this last point enough. Governance means that there are
    appropriate checks and balances governing pension funds and all their

The last point is important because since last
March, stocks have been on a tear, and many public pensions funds,
including New York state's Common Retirement Fund (CRF), are moving up again:

New York State Common Retirement Fund (CRF) announced it has returned
22.3% through the first three quarters of 2009. As of Dec. 31, 2009,
the end of the fiscal third quarter for the pension, the plan’s
holdings were valued at $129.4 billion. That was good for a 3.4% rate
of return in the third quarter.

New York State Comptroller
Thomas DiNapoli has been working hard at increasing the transparency of
the CRF since he took office following the resignation of Alan Hevesi.
Part of DiNapoli’s effort has included releasing quarterly performance
reports to the public. This plan was started last year. Prior to that,
the plan released annual performance reports.

has also released monthly investment reports for the fund. In those
reports, DiNapoi discloses where CRF capital has been committed, the
amount and the date of the closing of the investment.

the plan’s latest monthly investment report for November 2009, the CRF
closed seven transactions worth more than $591 million. Nearly all of that capital was committed to alternative investments.

CRF closed two deals in its private equity portfolio worth $40 million,
three deals in its absolute return strategy totaling $300 million, and
one deal in its opportunistic alternatives portfolio valued at $250
million. The remaining deal included a real estate transaction worth
$1.4 million.

Notice how pensions are now moving
back into alternative investments, meaning more hedge funds, more
private equity and more "alternatives" like commodity funds. While I'm
not against moving some assets into alternatives, I warn public pension
funds that they carry their own sets of risks and most U.S. public
plans are at the mercy of their pension consultants when investing in
these alternative investments. And many of these pension consultants do
not properly understand how to evaluate these alternative investments
in a portfolio context.

The NYT reports
that New York City’s freshly elected comptroller, John Liu, announced
this week what he called major reforms in the way the city’s pension
fund works. Mr. Liu said he wants to ease a ban on the placement agents
to help mostly smaller funds, including those run by women and
minorities, that don’t have the staff or expertise to win contracts on
their own.

I remain highly skeptical on placement agents as most
offer no value added whatsoever. These smaller pension funds should not
even exist. They should be rolled up into a larger plan which has
proper oversight and expertise to manage pension monies.

Finally, the NYT published an AP article, Missouri Auditor Calls for More Pension Oversight:

Lawmakers considered a bill Thursday to give the Missouri state auditor legal authority to monitor state pension systems.


bill comes in response to a recent court ruling that found the state
auditor only has the authority to review internal audits completed by
the pension systems. A Cole County Circuit Court judge quashed a
subpoena from the auditor to review more documents and interview
employees with the state's Local Government Employee's Retirement


The auditor's office has appealed the court's decision.


bill's sponsor, Sen. Jason Crowell, R-Cape Girardeau, told the Senate
pensions committee that many other state retirement systems allow the
auditor to perform a full audit despite the ambiguous language.


His bill would permit a full audit of any retirement plan created by the state.


Auditor Susan Montee said Missouri has performed audits on pension
funds without a problem since the 1980s, but it is better to clean up
the language.


''The ability to have oversight into our retirement systems is beneficial,'' Montee said.


state auditor goes beyond a simple fiscal audit to examine whether
agencies spend money properly. This includes looking at bidding
processes and travel expenses.


Montee said it doesn't make sense for her office to only review fiscal audits completed by independent auditors.


''It's an exercise in futility for us to come in and look at someone else's work,'' she said.

with other state retirement funds spoke in favor of the change, saying
they encourage the extra level of accountability.


A Pew Center on
the States report released Thursday found that Missouri's overall
pension system is considered healthy despite the state's current
economic woes.


The report states that the systems ''need
improvement.'' Missouri is still better off than neighboring Kansas and
Illinois, which had less that 60 percent of the necessary assets on
hand in 2008.

Interestingly, the Board at the Missouri State Employees' Retirement System (MOSERS), recently announced it is reviewing staff compensation structure:

MOSERS board voted to revise the MOSERS staff compensation structure
for the fiscal year that begins July 1, 2010. At the November meeting,
the board directed staff to develop a compensation proposal that
included recognition of the investment performance of the system’s
assets but limited incentive payments to staff to only those years when the fund’s return is positive.


Director Gary Findlay offered a proposal at the January 21, 2010,
meeting to eliminate the performance-based pay plan and instead, adopt
a base pay compensation structure that is market-based. The proposal
was adopted by the board. The board will consider hiring a compensation
consultant to evaluate and recommend market-based pay levels for all
staff positions.

I am following compensation
structures at public plans very closely and I have a feeling what is
happening at MOSERS will affect other plans too. Also, like in other
states, the fiscal situation is dire in Missouri, and they're tightening their belt:

part of the most recent announcement of additional expenditure
restrictions necessary to balance the state budget, the State of
Missouri, Division of Budget and Planning announced yesterday that the
employer incentive (match) associated with the State of Missouri
Deferred Compensation Plan (the Plan) will be suspended at least
through June 30, 2010.

Please keep in mind that MOSERS is
one of the best public pension funds in the United States. Their
governance puts most other US plans, and Canadian plans, to shame. They
don't just talk transparency, the actually deliver on it.

pensions on the brink? The answer to this question ultimately depends on whether
the Fed, central banks and governments around the world are able to
re-engineer inflation through asset reflation. If they fail, and we run
into a protracted period of deflation, the majority of pension funds
that are highly exposed to private/public equities, real estate, and
alternatives like hedge funds are cooked. All other pension reforms are
useless if deflation sets in.

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Youri Carma's picture


Pension Systems on the Brink? I should say; YES!   “Municipal armageddon. And you thought the financial and housing crises were bad – you ain’t seen nothing yet.”: David Dutra

Muni Threat: Cities Weigh Chapter 9 - 18 February 2010 (The Wall Street Journal)

Your Retirement Plan Confiscation Is Being Planned 20 February 2010 (Cookeville Times)

Kiss Your 401K Bye-Bye The US State Pension Gap is Over $1 Trillion Vid

U.S. state pension funds have $1 trillion shortfall: Pew 18 February 2010 (Reuters)

Pension systems on the brink 18 February 2010 (MarketWatch)

401k/IRA Screw Job Coming? Now this is a guaranteed rape job 8 January 2010 (Market Ticker)


Reflexivity's picture


Related to my thought/comment, supra.

Anonymous's picture

When the same "great business leaders" who just got away with the Dotcom Heist and the Real Estate Heist get away with the Pension Heist, we will all get to learn how to do for ourselves all those things the lazy stupid government workers do for us now: patch our own streets, haul away our own garbage, drill our own drinking water wells, dispose of our own sewage, keep our next-door neighbors from poisoning us with their toxic chemicals or whatever, work things out with other commuters after the traffic lights quit working, teach our own children at home, maintain our own ports and airports, and on and on and on. This will make us more self-reliant and therefore stronger and better.

Anonymous's picture

OBAMA and Bernanke are featured in a movie-- about greedy hedge funds called "Stock Shock." Even though the movie mostly focuses on Sirius XM stock being naked short sold nearly into bankruptcy (5 cents/share), I liked it because it exposes the dark side of Wall Street and revealed some of their secrets. DVD is everywhere but cheaper at

aurum's picture

but wait leo the economy is fine right?? aye

masterinchancery's picture

Absent massive money printing by the Fed, public pensions are cooked--time to start over with 401ks.

Anonymous's picture

Excuse me, but they just stole our 401ks. Should we give them a second helping of 401ks?

Anonymous's picture

I'm sure they learned their lesson when we punished them by.... And they'll never do it again, because we passed new laws and regulations to....

Well, in any event, we sure showed them!

SWRichmond's picture

what will ultimately shape the future of the pension crisis?

Agree with your comment above: the answer to Leo's question is "The Printing Press".

hooligan2009's picture

chit..done did it again...what happened to "remember me on this computer" that one about common sense was mine.

Anonymous's picture

Hmm...well if state workers knowingly signed a contract that it was easy to see couldnt be afforded then they deserve the same fate as auto workers who orchestrated their own demise by sucking out investment capital from the operating companies. My statement is harsh on car workers, since the Japanese government outblinked the US government on the hidden subsidies of a weak yen and low interest rates for a few decades. I suspect my statement is harsh on state workers because they took pay below private sector wages for decades in exchange for pension benefits. It is not black and white. It is clear that in the same way that the financial system collapsed because of accumulated trickery and fraud by those involved in the financial systen, the same can be said about those working in the state pension system, from actuaries, to treasurers to auditors etc etc..Middle men screwed up the benefits. An auit would reveal how much has been put in and how much has been paid in consultants/middle men charges to produce this mess. It is not much different from say Greece employing half the country in civil service jobs. It is the manifestation of accumulated waste from poor decision making. It can be fixed with common sense, but hey, who get a free lunch out of that.

Steroid's picture

And our Great Leader is from Illinois. I wonder what he can teach us? I wonder will he follow the other Great Leader from Illinois and kill 10% of the population to promote even more centralization? He does not even need a civil war, just let them die.

SWRichmond's picture

History doesn't repeat, but it does rhyme.  Will Obama be the second Pres from Illinois whose policies will precipitate lawful secession, followed by unlawful invasions?

Anonymous's picture

Lawful secession is a funny way of spelling 'treason'.

SWRichmond's picture

Jefferson himself wrote these words, 60 years before the northern invasion.  You are an uneducated fool.  These are complex ideas, and you have demonstrated that you are totally unqualified to comment on them.  Resolution 1 of the Kentucky Resolves:

Resolved, That the several States composing, the United States of America, are not united on the principle of unlimited submission to their general government; but that, by a compact under the style and title of a Constitution for the United States, and of amendments thereto, they constituted a general government for special purposes — delegated to that government certain definite powers, reserving, each State to itself, the residuary mass of right to their own self-government; and that whensoever the general government assumes undelegated powers, its acts are unauthoritative, void, and of no force: that to this compact each State acceded as a State, and is an integral part, its co-States forming, as to itself, the other party: that the government created by this compact was not made the exclusive or final judge of the extent of the powers delegated to itself; since that would have made its discretion, and not the Constitution, the measure of its powers; but that, as in all other cases of compact among powers having no common judge, each party has an equal right to judge for itself, as well of infractions as of the mode and measure of redress.

Locke, about 110 years before Jefferson wrote the above: For in that state of perfect equality, where naturally there is no superiority or jurisdiction of one over another, what any may do in prosecution of that law, every one must needs have a right to do.


SWRichmond's picture

So a state that enters a limited compact among states, while reserving the right to withdraw from that compact on its own pleasure, and whose acceptance into that compact upon those reservations is itself accepted by the other members, is then treasonous for exercising that right?  In fact, treason would be their failure to do so when petitioned so by their own citizens.

Did you read what you wrote, or did you merely regirgitate it from some memory planted there by Yankee schooling?

Dr Horace Manure's picture

Was it the "Civil War", or the "War Of Northern Aggression"?

Anonymous's picture


Hard to see how you can be so gosh darn bullish with so many pension, currency and government debt problems. Don't think solars are going to cure that in the next 3-4 years and there looks to be a lot of pain on the horizon for all.

Anonymous's picture

Don't let Leo misguide you on what pensions are:

First, pensions are not just about assets, they are there to meet future liabilities. In other words, it's all about asset-liability matching. This is important because while pension fund managers try to "shoot the lights out", often taking excessive risks to meet their actuarial rates of return (which are way too high), they expose funds to serious downside risk.


Second, there is a growing gap between public sector pensions and private sector pensions that is fueling anger and discontent out there. In an era of fiscal deficits, there will be increasing pressure to reign in all benefits, including public sector pensions. is this justified? In some cases, yes, but in other cases no. Governments will use any excuse to reign in public sector pensions but they allowed this situation to spiral out of control.



Third, and most importantly, governance matters. I can't stress this last point enough. Governance means that there are appropriate checks and balances governing pension funds and all their activities.




Anonymous's picture

PBGC's already insolvent.

No one is going to accept higher taxes to fund pensioners.

I wonder what the mechanism will be for bankruptcies at the state level?

Anonymous's picture

All we have to do is invest in the asset class that will, without outsized risk, allow someone who's paid $200K into the system to withdraw $2 million over the course of 20 years.

Do I have to think of everything around here?

DosZap's picture

Give me the $200,000k, NOW, and you won't have to think your going to pay out 2 million for 20yrs.

I have been around way to many death homes of late, and I did not see many 85yr old men, much less 95yr olds sucking air.

Ratio of men to women 1-9................over age 80.

Gromit's picture

State governments haves overpromised based on unrealistic expectations of future investment growth.

We have created an aristocracy of 60 and 70 year olds who will scoop the pot before an inevitable adjustment is made, probably on the lines of PBGC max payouts. 

DosZap's picture

Uh, why you just now deciding to discover this, and bitch ?.

If you knew it was happening, 10yrs should have been ass deep in it then.

True story.................sad as hell.

Had a old dude pushing 70, all his life had worked const, and had not saved(wasn't able to), a dime, but,he raised a family,grandkids, and gave them anything he could.........ALL he had extra.

When asked by a local radio jock, what was he going to do when he was too old to work period, he said, He was going to get a pistol, unloaded, and go to a bank, and ask the teller to give him a $1000.00..................

And then wait for the POPO's.

The jock said What for?",,,,,,,,,,,,,,,,,,,,

He said, 3 squares, a/c, heat, and color T.V., for the rest of my life.

Reflexivity's picture

Pension fund accounting can have significant off-balance sheet liabilities (on a grand scale) *Start cough, "Greece", end cough*; not to mention the fact they're calculated using massive 'assumptions'.

Anyone else believe that both public and private pension liabilities present a heretofore unexposed (and unadmitted) disastrous liabilitiy bubble that could threaten the US economy as a whole???

(Liability bubble, in this case, means a phenomenon that is under-hyped, as opposed to over-hyped.  Perhaps a better description would be an 'inverse pension liability bubble'--one that will explode, not implode once the truth is brought to light.)


Anonymous's picture

The bankrupt states should follow bankrupt corporation such as autos and airlines. Everybody will get a "haircut", but they all - bondholders, pensioners, civil servant - have to feel some pain.
The public sector employees on average make 45% more than private sector workers, and it's very probably they are on average a lot less productive. The gap has grown from 20% to almost 50% in between 2001 and 2008 (the "small government" Bush years.) If nothing is done, with private sector wages falling, and state wages/benefits increasing at over 6% y/y, the gap already effectively crossed 50%. It's unsustainable even with tax increases.
Unfortunately this is not the path that Treasury and Fed have elected. The whole idea of "recapitalizing" banks (i.e. giving a s**tloads of money to the same speculators) was to drive up asset prices and in effect bailout the underwater pension funds among others. If all s\assets go up in price, any budget gap can be closed, like in the late 1990s. Unfortunately, we know that 1990s market was brought to us by "easy Al" and his policies, and we're paying for it now.
So, as asset prices inflate, the states and Feds will happily report that they're fully funded. Unfortunately, as there's no free lunch, while the dollar value will be there, the purchasing power will not. In the period of across the board rising asset prices, the ultra-rich who live off their investable assets will multiply their assets. They might even lever up, and increase their real wealth multiple times. The pensioners, of course, will lose the purchasing power *forever*, as they don't have enough investable assets to counterbalance the real purchasing power losses.
Either way, unless money will grow on trees, pensioners will get hosed. It's just a question of how much, and if there will be Mad-Crazy Money to be made on the whole asset re-inflation deal.

jdrose1985's picture

It's too late to reform the system. Only solution is to let it all collapse.

This may sound distasteful but seriously, these pensioners..they lived a damn good life. They got EVERYTHING they wanted while the rest of the world starved to death and decimated each other. Now my generation is stuck footing the bill for your stupid toys and your filthy habits.

Fuck you oldies who rely on the nanny state to be your everything. I'm sick of you and your condescending, holier-than-thou-art attitudes. Take your pension system and shove it. 

I hope that cat food taste lingers in your mouths if you get the chance to humble yourselves and live like the rest of the world has had to.

Invest in yourself, don't throw your pearls to the swine lest they trample you.

Wishing you well,




anarkst's picture

Didn't you mean "1984?"

Mad Max's picture

I'm not much older than you so don't misinterpret this...

Pensions are, in practical application, a ponzi scheme.  No, they don't have to be - it is possible to have a pension that is basically sound, funded at the time the liability is incurred and therefore truly a trust fund of prepaid retirement benefits.  But hardly any pensions actually operate like that.  As I've recently posted in other comments, I consider the whole pension concept immoral and fraudulent based on how it works in the real world.

But getting back to your comments, I think it's important to realize that a lot of the people collecting pensions aren't rich and aren't getting six-figure pension payments.  Yes, Mish and others have rightfully pointed out those abuses, which seem to be mostly in state and local government, but the bulk of pensions are not like that.  If someone worked their 40 hours/wk for years based on a certain salary and a certain pension promise that together was a fair deal, I don't think we should now call it abusive just because it's inconvenient.  Instead, we should call the people who mismanaged that pension into trouble abusive.

Going forward I think pensions should be abolished.  Either outlawed completely, or thoroughly reformed to require 102% of indicated funding at all times, and perhaps also taxed to discourage them anyway.  People should learn to save for themselves.

jdrose1985's picture

I appreciate the feedback.

My problem with the pension system is the sense of entitlement seed which becomes implanted in people's minds. Think about it..people can literally and genuinely say the state owes me. Which it does.

I know these people aren't getting rich from their pensions. Let me tell you a little bit about myself. I earned $12k dollars last year struggling to stay busy(I'm a simple electrician) and my wife who is a recent grad/full time substitute teacher earned about $15k, I drive a '97 honda with 200k mi on it, my rent is $450/mo and we rarely turn the heat on unless we have guests(we do have a very small heater which works wonderfully upstairs but takes a little while, we usually wear sweat shirts etc), I don't have a cable bill, my internet is pirated from wireless networks some place around me, we don't have health insurance, I buy one pair of shoes a year, . I can afford to take my wife out to eat about once every week...we live like the fucking spartans. I save and invest roughly 60% of my income.

Am I complaining? No way! My life has never been more fulfilling and we have a great marriage. When I slip up and tell people how we live, they give me a look like i'm a fucking leper.

However, I invested in Cavs season tickets this year(center court, bitches), we skip town/work whenever we feel like it, we are moving to California when our lease is up, do whatever the fuck we want, when we want to. I've invested in all the capital goods I need to start my own small business (fabricating signs, incredibly beautiful ones at an extremely competitive cost...every business needs a sign) and looking towards the future and serving corporate needs in this area.

The old farts were stupid/unfortunate enough to hand it over to the pensions, 401k's. Well, shame on them. Too bad the only history they ever learned was revisionist history and no meaningful labor history.

I saw the headline the other day...Will Main St ever trust Wall St again? (yes, with the help of revisionist history)

I get what you're saying about how it's possible to have a soundly funded pension plan. Unfortunately such things don't exist in reality. The illusion must go on...until it can't.

Thanks for reading.


chindit13's picture

"Cavs season tickets....we do whatever the fuck we want whenever we want to"

So your moral superiority to those Boomer bastards, who "got anything they wanted" comes in the form of what?

Also, I must be too old to remember where this "rest of the world starved and decimated each other" was located.  And maybe your Cavs season ticket money should have been held in reserve so that in the regularly occuring instances such as the Haiti Earthquake you could help out someone other than yourself.  No, damn if on a household income of $27K/year you don't DESERVE Cav's season tickets, which you can enjoy while the rest of the world is starving and decimating each other.

If you are respresentative of the new and better generation then we are all well and truly fucked worse than even I thought. 

jdrose1985's picture

More of your condescending drivel.

That's money I invested and managed because it was the best return i could get on my capital. I have to drive five hours round trip to see a single game of which i've seen 4 games so far. That money wasn't spent on my self. I've doubled my money and invested it in capital goods to build something better.

And just to let you know, after i made that investment, i gave nearly every penny of my cushion to the Warm Blankets orphanage right before christmas. EVERY LAST BIT I COULD GIVE WHILE EVERYONE WAS BUSY SHOWERING EACH OTHER WITH FLAT PANEL TEEVEES AND EVERY OTHER PIECE OF SHIT ITEM THEY DONT NEED.

I deserve none of what i have and i don't measure my pride on what i have but rather what i can afford to give away.

If you knew the dreams and visions i share with my wife, you would surely understand why i save every penny i can get. While i earn 12 bucks an hour i have to listen to my coworkers complain about every thing under the sun, acting like the world owes them something. What's the rest of the world earn...2-3 dollars a day? I have a responsibility to the rest of the world.

Sorry boomers, you had your shot. you fucking blew it.

chindit13's picture

You might try a Cav's away game, as it seems you haven't been very far out of Cleveland.  The rest of the world covers a lot of ground, and as one who has spent more than half of her adult life outside of the US, I can share the good news with you that many people in the world away from LeBron et al not only earn more than $2-3 dollars per day, but they have electricity, flat panel TV's, cellphones...and they are happier than you.  Incidentally, my last dozen years, after departing a WS career, have been spent in the developing world where more than half of my WS earnings have gone into a personal, no donations accepted aid organization.  Guess I should have bought Lakers season tickets instead.

Those miserable, selfish, self absorbed Boomers you love to hate, while they certainly have their faults, happen to be the most generous people on the face of the Earth.  After the Asian tsunami in '04, the private citizens of the US donated more money than all the people and all of the governments of the rest of the planet Earth combined.  Hundreds of millions of those dollars went to Indonesia, a country where one has trouble going more than a minute without finding someone who hates the US.  Still, the citizens of the US gave to help them.  Yea, all boomers suck.

Incidentally, you are not yet old enough to know that you will "fucking blow it" too, if you already have not done so.  Life humbles everyone.  It's your turn now.  If I'm still around when you grow up, we can compare who did what for whom, who blew it, and who was truly generous.  Until then, you have a lot of work to do and ought to work on yourself rather than criticize, when you are clearly in the dark about the world.

velobabe's picture

ditto little scattered right now.

know you don't make typo's so thinkin this dude rattled you a bit. i can see why.

now that i am gettin to know you better. going forward with my deposition row walk with my gang rape case. expect a high six figure settlement, who knows maybe more if i can prove mental distress damage. breach of implied term of good faith. invested in my attorney, name is marion, but he is a dude. cute games we play on thee.

velobabe's picture

please, the student has arrived.

velobabe's picture

curious, i remember reading that you said you didn't care much for robo's page. did you compromise?

just asking, you need to explain some things.

velobabe's picture

all i want to do is really master glass blowing, before i die†

velobabe's picture

that baby i did have, well you should of experienced the birth of a coat hanger one. i had the puncture done in west virginia and than gave birth to it in ohio. it worked out ok in the end. my sister made sure i didn't skip out to california to join the charlie manson gang.

velobabe's picture

one who has spent more than half of her adult life outside of the US,

well now my mind has been significantly blasted open. thanks. imagine my surprise. well i am still quite intrigued with you more than ever. the emperor of japan, nice.

ps i was liken' this tread immensely, until, ok.

Anonymous's picture

I already have blown it, plenty of times.
Try getting some boomers together to go serve at a food pantry.
good luck getting them away from their comfort box. Where werethey while millions die in darfur and other places? Its easy to pick up the phone and charge it to the credit card butgood luck getting more than that. The most selfish generation...besides mine of course..can't say its the case for all...but the vast majority yes.

Anonymous's picture

You both don't seem to think that the AFSCME pensions, those governmental ones that pay so well are unearned.

You have decades of do nothing political appointees making great salaries for essentially running non-stop campaigns for their political benefactors and as such don't deserver one thin dime of promised pensions.

The internecine nature, the nepotism of government 'employees', the outright swindling of taxpayers who actually produce something of value is reason enough to hope that these pensions never get paid.

seadragonconquerer's picture

Amen, brother. Police, fire, military personnel and the like deserve pensions. Most of the other (heavily group-entitlement)) "government employees" that bedevil us on a daily basis...well, you could take them out and shoot them and we'd never notice the difference. But then, they aren't worth the powder needed to blow them away.

Anonymous's picture

Why do police, fire etc deserve special treatment? Those other govt employees who "bedevil" you are part and parcel of the same system. I'm sure we'd notice if you eliminated all the overpaid prison guards - but sure, we'll keep the cops around. Fire departments are great, but it helps them work if they have roads (maintained by govt) and water (organized by govt).

DosZap's picture

Uh, I will not collect a Pension.I will be fortunate to collect a portion of my Social Security,and Medicare.(should my private funds run out, not likely).

Which, no one except me will have  paid a dime for.

Slap that smart assed mouth '85 on would you feel if you PAID your whole life, all your working life.(cause you have, and you will).

Only to told you are a drain on the system, and the programs YOU paid for are not sustainable?.

Excuse me Fkstick,I do not want any excuses, I want MY earnings, send me a check for 40yrs, with NO interest, and I walk smiling.(and you can make signs,and play round nuts).

These Gv't assholes call these entitlements.......well, if YOU paid for them, they are not FREE, some poor bstd's paid for them..Me/Us/You.

It's not the pensioners faults, it's not the SS/Medicare recips faults, it's the UNCLE that is supposed to watch the henhouse, to make sure, the LAWS are carried out.

But, NO.................their the Bstd's, that are now yet again, STEALING from US.

And blaming the crisis on the one's who SUPPORT the systems.

It's their jobs, to make sure the Employers who made the Pension deals, held back 100% of the funds needed to fund their OBLIGATIONS......

Just as it WAS/IS, for them to HAVE done the same for the SS/MC group.

Want a scapegoat.............................go no farther than 1600 Pennsylvania Avenue, and the SOB's , all 455 of them, that HAVE not done due diligence, and taken care of the PEOPLE they were elected to serve.

It's not the peoples fault, WE did not MAKE these inane programs law, and steal from ourselves......................

Wann'a be pissed, 10sq miles of horseshit, called D.C., is the culprit.



jdrose1985's picture

How would i feel? I'd feel like a...fool. The same way i feel every time i look at my check and see that more money has been taken out to fund something for you which i'll never see.

There are no excuses. Nothing in life is guaranteed. Every time i see what's been taken out, I simply cut my losses and move on.

Learn to be happy on next to nothing. It really is possible. You'll see first hand.

Anonymous's picture

Hi Leo,

Gee, how many jobs are going to be created in February?

Leo, why are you still alive?

moneymutt's picture

Thanks Leo, I can't believe I'm saying this, nice presentation. I agree, governance matters....and too often it fails to service the ones it's supposed to represent due to corruption.

After a 40-50-60 precent rally in equities, pension funds are now moving into higher risk? Seems like a very bad bet, and a dangerous one.