This page has been archived and commenting is disabled.
Pension Woes May Deepen Financial Crisis
Please read my latest entry and leave your comments here:
http://pensionpulse.blogspot.com/2010/03/pension-woes-may-deepen-financial.html
Thank you,
Leo Kolivakis
Playing Catch Up
This table shows how many years it would take for each state to make good on its pension promises if it spent all its tax revenue on pensions -- and nothing else.
| State | Plans analyzed | Assets (in billions) | Years to catch up |
|---|---|---|---|
| Ohio | 5 | $115.6 | 8.7 |
| Colorado | 1 | 29.3 | 8.3 |
| Rhode Island | 1 | 6.0 | 7.7 |
| Illinois | 4 | 65.7 | 7.2 |
| Alabama | 3 | 22.3 | 6.4 |
| Wisconsin | 1 | 62.2 | 6.3 |
| South Dakota | 1 | 6.0 | 6.0 |
| Missouri | 3 | 27.0 | 5.8 |
| Mississippi | 3 | 15.1 | 5.7 |
| Oregon | 1 | 46.1 | 5.7 |
| New Mexico | 2 | 16.2 | 5.5 |
| South Carolina | 2 | 21.8 | 5.4 |
| Kentucky | 3 | 21.6 | 5.4 |
| Oklahoma | 4 | 12.0 | 5.2 |
| New Jersey | 4 | 60.5 | 5.0 |
| Arizona | 3 | 25.0 | 4.9 |
| Connecticut | 3 | 20.4 | 4.7 |
| Texas | 4 | 125.3 | 4.7 |
| Georgia | 2 | 53.7 | 4.6 |
| New Hampshire | 1 | 4.4 | 4.5 |
| Maine | 1 | 8.3 | 4.4 |
| Nevada | 1 | 17.8 | 4.2 |
| Minnesota | 4 | 36.2 | 4.2 |
| California | 3 | 330.0 | 4.2 |
| Montana | 2 | 5.9 | 4.1 |
| Arkansas | 3 | 8.1 | 4.1 |
| Louisiana | 2 | 17.7 | 4.0 |
| Maryland | 1 | 27.8 | 4.0 |
| Hawaii | 1 | 8.3 | 3.9 |
| Pennsylvania | 2 | 70.9 | 3.9 |
| Iowa | 1 | 18.1 | 3.7 |
| Kansas | 1 | 10.3 | 3.7 |
| Wyoming | 4 | 4.8 | 3.7 |
| Alaska | 2 | 11.7 | 3.7 |
| Idaho | 1 | 8.1 | 3.6 |
| Utah | 3 | 18.6 | 3.4 |
| Indiana | 2 | 15.5 | 3.4 |
| Florida | 1 | 97.2 | 3.3 |
| Washington | 7 | 44.3 | 3.2 |
| Virginia | 1 | 41.3 | 3.2 |
| Michigan | 4 | 43.4 | 3.1 |
| Massachusetts | 2 | 37.8 | 2.9 |
| Tennessee | 1 | 25.8 | 2.8 |
| West Virginia | 2 | 6.6 | 2.7 |
| New York | 3 | 189.8 | 2.6 |
| North Carolina | 2 | 59.1 | 2.6 |
| Nebraska | 2 | 5.4 | 2.1 |
| North Dakota | 2 | 2.9 | 2.1 |
| Delaware | 1 | 6.2 | 2.0 |
| Vermont | 3 | 2.4 | 1.7 |
Notes:
Pension assets are taken from Pensions and Investments for September 2008 and projected forward to December 2008 using asset allocation data and realized asset class investment returns. Tax revenue data used to calculate the years of tax revenue each state would need to devote to pension funding to catch up on its pension promises is based on 2007 data from the U.S. Census Bureau Census of Governments. Pension assets and liabilities are aggregated to the state level.
»
- advertisements -
Some news out of New Jersey today, where that state along with California are known for allowing their state employees to "spike" their salary in the last year, which they would get 90% of their final year's salary for their lifelong pension.
This practice of selling accumulated vacation and sick time allowed an accountant with a $65,000 salary to simulate him having a $200,000 salary, and thus retire with $180,000 per year the rest of his life.
Pension "spiking" should be illegal. States should retroactively adjust all previous pensions that were spiked. Period.
Awsome! Got a link. This shit kills me. I know it goes on in MA, CT, NY, RI too.
Early retirement probably, so the state can be expected to pay this for 25 years? That's 4.5 million without COLA adjustments. What pension in the world is producing those types of returns? Maddoff?
This guy will probably have to be hired back as a consultant too.
As one who is stuck, for now, in CT I can attest to the fact that public pensions and benefits will crush this state.
How can the average working class homeowner take the hits they have taken over the last few years yet be expected to pay at least a 2% increase in property taxes year after year to support bloated education beaurocracies that pay salaries in the $200k range for superintendants, assistant supers, business managers, etc.? That's at the local level! The state level is much worse.
It's a crime and absolutely one of the biggest ponzi schemes in the world.
I remember reading The Trap by Sir James Goldsmith where he said something to the effect: A nation's economy is split into two broad segments, one which produces wealth and the other which dispenses it......one cannot reduce that part of the economy which produces wealth and expect to be able to maintain the other part which dispenses it. You must earn what you spend.
Not anymore.
This just came out today in Alabama...
MONTGOMERY, AL -- Gov. Bob Riley has signed legislation that will provide more funding for the state budgets that will take effect Oct. 1.
The legislation allows the accumulated liability for the state retirement programs to be computed over 20 years instead of 30 years. Riley said the legislation he signed Monday means the state's costs for retirement benefits won't increase in the new fiscal year.
Riley said the change should mean an extra $38 million for the education budget and $5.6 million for the General Fund budget in the new fiscal year. Without the new law, that money would have gone for retirement costs.
What are they doing here?
Reducing pension/retirement costs. This is trying to fix what Leo points out, but I know most bears that reside here will probably take it to be bad news and try to short the market to no avail.
The other major concern for all governments is that entitlements are inflation adjusted. The policy of inflating away the nation debt is storing up the risk of dramatic increases in inflation, though not for a good while yet. However, when it does arrive, it is going to be pretty ugly for these funds.
MAY,,lol folks with out a pension check WILL
deepen the crapola,,'
these pension people ought to grab up some gold and silver ,,
you're right leo, it is too late. if this was an isolated problem, it could be managed, but it's just another, in a large group. if you can get out of the solars, at a gain, it might be prudent, then sit the next inning out. you can always jump back in quick. china, has wharehouses stacked to the ceilings, with unsold product. although on paper it has been sold. like our treasuries, we sell them to ourselves. an ounce of prevention, is worth a pound of cure. protect yourself. good luck.
delacroix,
I am right on pensions and on solars - this is the sector of the future. I just keep accumulating them as they fall in price (I know traders get edgy when they hear anyone is averaging down!).