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Pension Shocker: Plans Face $2 Trillion Shortfall, Moody's Says
Last month, in "Cities, States Shun Moody's For Blowing The Whistle On Pension Liabilities," we highlighted a rift between Moody’s and some local governments over the return assumptions for public pension plans.
To recap, when it comes to underfunded pension liabilities, one major concern is that in a world characterized by ZIRP and NIRP, it’s not entirely clear that public pension funds are using realistic investment return assumptions. The lower the return assumption, the larger the unfunded liability. After 2008, Moody’s stopped relying on the investment return assumptions of cities and states opting instead to use its own models. Unsurprisingly, this led the ratings agency to adopt a much less favorable view of state and local government finances and as WSJ reported, rather than admit that their return assumptions are indeed unrealistic, local governments have opted to drop Moody’s instead.
The debate underscores a larger problem in America. Almost half of the states in the union are facing budget deficits.
Underfunded pension liabilities are one factor, but the reasons for the pervasive shortfall vary from plunging oil revenues to plain old fiscal mismanagement. The pension issue gained national attention after an Illinois Supreme Court decision threw the future of pension reform into question and effectively set a precedent for other states, sending state and local officials back to the drawing board in terms of figuring out how to plug budget gaps. One option is what we have called the "pension ponzi" which involves the issuance of pension obligation bonds. Here is all you need to know about that option:
'Solving' this problem by issuing bonds is an enticing option but at heart, it amounts to what one might call a "pension liability-bond arbitrage." The idea is to borrow the money to plug the pension gap and invest it at a rate of return that's higher than the coupon on the bonds, thus saving money over the long-haul. Of course, much like transferring a balance on a high interest credit card onto a new card with a teaser rate (or refinancing a high interest credit card via a P2P loan) this gimmick only works if you do not max out the original card again, because if you do, all you've done is doubled your debt burden. As it relates to pension liabilities, this means that what you absolutely cannot do is use the cash infusion as an excuse to get lax when it comes to pension funding because after all, that's what caused the problem in the first place.
And here's a look at how pervasive the problem has become:
Make no mistake, America’s pension problem isn’t likely to be resolved anytime soon and in fact, with risk-free rates likely to remain subdued even as equity returns face the possibility that the beginning of a Fed rate hike cycle could trigger a 1937-style equity meltdown (bad news for return assumptions), and with investors set to demand higher yields on muni issuance thanks to deteriorating fiscal circumstances, the financial screws may be set to tighten further on the country’s struggling state and local governments. Bloomberg has more:
The cost to American cities for their cash-strapped pension funds is starting to look a lot worse, and it’s not because the stock-market rally may be losing steam.
Houston was warned by Moody’s Investors Service this month that it may be downgraded because of mounting retirement bills, the latest municipality put on notice as the company ignores bookkeeping gimmicks that let cities mask the size of their debt for years. The approach foreshadows accounting rules for even top-rated issuers that are poised to cause pension shortfalls to swell as new financial reports are released.
"If you’re AAA or AA rated and you’ve got significant and visible unfunded pension obligations, you’ve only got one direction to go in terms of rating, and that’s potentially down," said Jeff Lipton, head of municipal research in New York at Oppenheimer & Co. "It’s the presentation on the balance sheet that is now going to drive urgency."
Cities that shortchanged pensions for years are under growing pressure to boost their contributions, even after windfalls from a stock market that’s tripled since early 2009. Janney Montgomery Scott has said growing retirement costs are "the largest cloud overhanging" the $3.6 trillion municipal-bond market, where investors are demanding higher yields from borrowers under the greatest strain.
That was on display this week for Chicago, whose credit rating was cut to junk by Moody’s in May because of a $20 billion pension shortfall. The city was forced to pay yields of almost 8 percent on taxable bonds maturing in 2042, about twice what some homeowners can get on a 30-year mortgage.
Estimates of the pension-fund deficits facing states and cities vary, depending on the assumptions used to calculate the cost of bills due over the next several decades. According to Federal Reserve figures, they have $1.4 trillion less than needed to cover promised benefits.
Officials have been able to lower the size of the liability by counting on investment earnings of more than 7 percent a year, even after they expect to run out of cash. New rules from the Governmental Accounting Standards Board require a lower rate to be used after retirement plans go broke. Many reported shortfalls will grow as a result.
Moody’s, which in 2013 began using a lower rate than governments do to calculate future liabilities, has estimated that the 25 largest U.S. public pensions alone have $2 trillion less than they need. Cincinnati and Minneapolis are among cities Moody’s has since downgraded.
The California Public Employees’ Retirement System, the largest U.S. pension, this week said it earned just 2.4 percent last fiscal year, one-third of the annual return it projects. The California State Teachers’ Retirement System, the second-biggest fund,gained 4.5 percent, compared with its 7.5 percent goal.
In short: America is facing a fiscal crisis at the state and local government level and it appears as though at least one ratings agency is no longer willing to suspend disbelief by allowing officials to utilize profoundly unrealistic return assumptions in the calculation of liabilities. This means downgrades and as for what comes next, we'll leave you with a recap of Citi's vicious "feedback loop".
From Citi
How does a downgrade create a feedback loop?
Payment induced liquidity shock
For many issuers’ credit contracts, a drop to a speculative grade rating acts as a payments trigger. For instance, the issuer may have commercial paper programs and line of credit agreements as a part of its short term borrowing program and a rating downgrade could qualify as an event of default for these borrowing arrangements. This enables the banks to declare all outstanding obligations as immediately due and payable.
A rating downgrade could also force accelerated repayment schedules and penalty bank bond rates on swap contracts and variable-rate debt agreements.
Thus, as a result of the rating action, an issuer could face increased liquidity risk at an unfortunate time
when it is working to navigate its way out of a fiscal crisis.
Knock-on rating downgrade risk
In some instances, rating agencies may disagree on an issuer’s creditworthiness which could result in a split level rating for a prolonged period. But a drastic rating action by one main rating agency (either Moody’s or S&P) which knocks the issuer’s debt to below investment grade could force the other rating agencies to follow with a similar downgrade. While the other rating agencies might feel that underlying credit fundamentals of the issuer do not merit a sub-investment grade rating, their rating action could be dictated by negative implications due to the liquidity pressures posed by the first downgrade to junk status. Recently, S&P downgraded a credit as a result of Moody’s rating action that stated that its rating action reflected its view that the issuer’s efforts “are challenged by short-term interference” that prevents a solid and credible approach to resolving their fiscal problems.
Shrinking buyer base
Many investors have mandates to buy investment grade debt only and a fall to speculative grade status could cause existing investors to liquidate the holdings of the fallen credit and shrink the universe of buyers.
Rising issuance costs
In many cases the issuer may have been working diligently to reduce its exposure to bank credit risks in the event of a ratings deterioration (for e.g. shifting its variable-rate GOs and sales tax paper to a fixed rate by tapping its short-term paper program then converting it into long-term debt) but the unfortunate timing of the downgrade will make this task much more challenging as a shrunken buyer base for an entity’s debt, quite naturally, translates into a higher cost of debt.
A higher cost of debt exacerbates liquidity problems and thus the feedback loop could continue to gain traction.
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Sounds bullish. Surely they'll buy more stocks now to increase revenue since bonds are so ...underperforming. AmIrite?
2 Trillion based on what?
the value of their existing pension portfolios? i would like to see the sensitivity analysis to both the bond and the stock market.
a collapse in the bond market could very quickly turn this 2 trillion shortfall into 4 trillion as the day approaches when these pension funds will need to be net sellers.
this is the perfect storm brewing...
The actuarial assumptions used for calculating pension plan funding are largely nonsense, and are postulated by actuaries and pension executives who use them to increase their personal compensation. I don't think many of those highly educated professionals really understand how much benefit falling long-term interest rates and the exhorbitant privilege of seignorage has been to the US bond and stock markets. As that goes into reverse, those shortfalls are likely to accelerate. If they can't make their pensions solvent in one of the greatest bull markets in history for both stocks and bonds over the past 35 years, what possible hope do they have if the markets mean-revert to more typically historically normal behaviour?
I'd like to add the "Death Panel Modual" to the calculations.
Basically, without programming language, it kills everybody that is 59.5 years old and above.
Problem turned into liquidity, and checkmate.
I'm out back havin' a smoke if anybody needs me.
Um, O.K., call me ignorant.
What's a 'PENSION'?
OH. This story is about GOVERNMENT WORKERS! 'Public servants'...
"The cost to American cities for their cash-strapped pension funds is starting to look a lot worse,..."
Can I bum a smoke? Oh, wait, I have a couple left...
at the 12%+ ror on the spx----its do-able (stocks never go down)
Well, the good news is that if you are a Flint Michigan retired Auto Worker, your defined benefit pension was fully funded by Obama when he bought you all off a half dozen years or so ago.
and Oh, Mr Scott, Sir.. the muni workers are going to be in for a really big surprise in the next couple of years or so .. the FED pukes, well they will be OK thanks to Janet.
Bond.. my name is James Bond.
States do not print "money" anymore.
.. and for God sakes.. quit smoking.. only idiots do that.
Drinking.. drugs.. sex obsession... they are all better.
Just another thing to add to this economic mess
Layoff List: http://www.dailyjobcuts.com
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...all these pension fund manager assumptions reminds me of the classic joke:
A physicist, a chemist and an economist are stranded on an island, with nothing to eat. A can of soup washes ashore. The physicist says, "Lets smash the can open with a rock." The chemist says, "Let’s build a fire and heat the can first." The economist says, "Lets assume that we have a can-opener..."
True. The ship has a few leaks. But we'll get through this rough time. Suck it, Hedgers.
I'm in Florida and I hear stories all the fucking time here about state or city gubment employees like cops, firemen, or some kinds of douche bag beaurocrats who "retire" after 20 years at age 40+ but then immediately take new bullshit gubment jobs so that they can suck their pension funds while continuing to draw a big gubment salary.
It's called "double-dipping" and so many leeches have done it that once they're old enough to "retire" again for the 2nd time they now suck 2 pensions out of the system.
Yeah, it all seems great for them at first, but that bullshit it now proving to be causing the collapse of the entire bullshit system.
It's all fun and game until you run out of everyone elses "money" isn't it, bitchez?
Math is the universal science. It's as constant as death and gravity. You can only try to fight it for so long and then it all catches up to you. Just look at how fucked up every single country and government scumbags are right now all at the same time?
It ain't a fucking coincidence...it's the absolute law of math catching up to them. Can't kick the can much further down the road, bitchez.
But the ultimate fucked up part about facing up to all of this is that the vast majority of the people in this world whether they know it or not or even understand it or not are the ones who have to pay for it. Many will have to pay for it with their lives which is why the scumbags who cause all of this and who run things always cause world wars so that they reset their fucked up system and wipe out millions of people.
And generation after generation are born into the "Matrix" oweing thousands and thousands of debt instantiously and are indoctrinated into the debt slave system. Wash, rinse, repeat. Century after century over and over again...same shit, different day.
Gotta wake the fuck up and wipe out the banksters, lawyers, and scumbag politicians. Cancer of society. Sick and twisted scumbags.
The delicious irony of it all is that the only people making 8% annual returns are the ones lending money to the pension funds. Maybe they should just invest in their own........hold on, I think I'm onto something.
Shocking Government Admission: 51% Of Insolvent Pensions Aren’t Guaranteed
Do you really believe any guarantee by the government? They can't guarantee ANY of it.
I hate stories like this. Smart people have been ringing this bell for over a decade. Why oh why do we always have to wait for it to fucking blow up before anything is done? I'll tell you why. Because money and power are grabbed by the fistfull in times of crisis. Everyone runs around with their hair on fire and a few people rape everyone. People suck
The end result will be hyperinflation. This will materialize as the second edge of the moneyprinters sword. Greenspan admitted it years ago when he said, "We can guarantee cash benefits as far out, and in whatever size you like, but we cannot guarantee their purchasing power."
I know you're saying 'catching up with them"...and I know what you mean. But really, it's catching up with US because our property taxes here in Houston have gone FULL RETARD!
The school systems are broke because of the fat compensation packages...then when they need to build another school...they go to the voters with another bond measure and a sad story about children! It makes me siCk! Why do they have to borrow money with the money they are collecting in taxes!!
Oh yah, they spend that money on compensation pre/post retirmenet packages...
Oh...and one more comment. When I was in elementary school. you had teachers...a single principal and a janitor. that was it!
NOW...holy shit...the elementary schools here in 77024 have this large building...you ask, what is that large building? Oh that's the Admin building...full of counselors and principals and all sorts of assistants running around. It's jsut all a scam.
Don't forget the extra teachers and classrooms devoted to nothing other than teaching english as a second language classes in a small group setting.
Oh, and the emphasis on keeping kids in class whether they have any desire to be there or not (so the school can collect their "per kid" allowance from the state). May get the school a couple extra bucks, but it turns the entire school into a juvenile detention center and keeps any actual learning from taking place. (Unless you count learning about sex, drugs, and how to game the welfare system.)
But at least we still have free lunch to keep all the poor little buggers fed.
"Why do they have to borrow money with the money they are collecting in taxes!!"
Exactly...and then ask this question to everyone you run into:
Why do we have to pay taxes when they can print Trillions of dollars to infinity out of thin air??????
Watch everyone you say that to go into complete instant retard mode because they can't even comprehend the concept and they don't have the balls to question the entire system anyway.
Why Illinois will be one of the first to go belly-up:
"Naperville's top cop will continue to collect both a police pension and his chief's salary.
State officials confirmed Thursday they have dropped their legal battle with Chief Bob Marshall"
The dismissal of the state's appeal allows Marshall to collect his salary and police pension, which stood at $154,775 and $104,109 respectively last year. The current year figures were not immediately available.
"Shortly after, the Illinois Department of Insurance filed a position statement arguing that Marshall should not continue to receive his police pension along with the salary. However, the Naperville Police Pension Fund Board voted 4-1 in January 2013 that Marshall could collect both."
http://my.chicagotribune.com/#section/-1/article/p2p-81900513/
Mathmatically the system they use to manage it is called the Kelly Criterion makes it a guarentee that it will crash. The 'bankers' use the same math professional gamblers use to manage all that money in markets, commodity floors, escrow hedges...all of it. Mathmatically it is a 100% certainity it all disappears and the house claims every penny. It always goes back to 0 no matter who says otherwise, because it's built to do it.
Can't we just agree a Gubby worker skimmed enough during employment, and call it even?
I am not worried. My plan administrator told me ‘Don’t worry, everything is securely invested in MFGlobal and solid Chinese solar companies like Suntech and Liansheng Resources Group. Not to worry, solar is the wave of the future and China is the place to be.”
So I’m not worried.
Which old timer can remember the name of the solar idiot, always yelling at us to buy Chinese solar, he went away like the $5 silver guy??
Exactly! Anyone who relies on some 'plan administrator' to care for his pension is asking fror trouble. Just as unreasonable as relying on SS for a comfortable retirement.
They will never know what hit them. And so fucking what. We tried.
Precisely- we should have seen a tremendous improvement over the past 6 years, not a decline.
Actually you and the 55, scratch 55 its not 61 in the time I wrote this (you're still all wrong), that have given thumbs are quite wrong, allow me to explain.
The actuarials that claim to miss calculate the pensions and the future liabilities and requirements have done quite a good job. The problem has been the government and how they are protected by the laws which collude with the financial secto. All pension deposits that have been given by the US taxpayer have been miss allocated and all administrations have been filling the government pension account with IOUs. As for the private sector where your 401k contributions go the problem hasn't been with actuarials either. The fault is that all pensions go into funds that are allowed by the government to be put in the market, a pesudo form of artifical liquidity expansion. Don't blame actuarials for your money being misallocated, or even executives. For if your 401k's were placed in interest bearing accounts only there would be a lower value in the velocity of money and a tightening in liquidity because this money would be locked up in the financial system as reserves for the banks and could be used only more for loans, and you know how bad the bubbles in housing have been!
The whole problem is that US economy is poorly designed; its fundamental structural defect is that it is reliant on constant CLEAN growth. By CLEAN I mean where the top income band does not grow relative to the lower income bands, otherwise you have DIRTY growth. The relative size of the top 1-10% has out paced the growth of the lower 50%, and thus the "locusts at the top" are raiding the rapidly diminishing green fields at the lower income bands. Because of this situation and because there is a bias towards protecting the rich with respect to the poor, your pension funds are being slowly raided by the elites, by very cunning financial ploys. Thus your diminishing pension funds.
If you wish to target anybody, target the corrupt circle involving the legal system, government and financial sector. This is what is destroying your pension funds, it isn't incompetent actuarials (they do the proper math, they just can't allow for corruption), or greedy executives (because that is such a small, part that it doesn't relatively rate). You can start blaming the government, both Republicans and Democrats, and of course, you blame the people who vote for these crooks into office...that is many of YOU.
If you want to stop all this, stop voting for Democrats and Republicans. Neither of these parties give a damn about the ordinary "Joe/Jane", so why keep voting for them? You really think by continually changing from a Donkey to an Elephant and back again, is going to change anything? Nope, you are continuously going to keep on getting a Jackass or a Dumbo in Congress or the P.O.
So are there better ways of doing things? Of course! But you will not see them, for it takes power away from the government. Let me outline one way. Initiate a plan where everybody, by law, has their own pensioner account, where banks must support without any fees. As you are working you are required by law to contribute to your Pensioner Account. This money is kept there in the account allow to accumulate until the day arrives when you must retire. Now what is important is the follow. For as long as you are NOT a pensioner, that is drawing from the account, this account has NO taxes on it, and why should it, it is money that is to be used for the future not present. This account must stay in control in your hands and never must be in the control of anyone elses hands. Now here comes the beautiful part of this system. Every region where you live, say city, state or even county, the total funds of all the pension accounts can be used for ONLY local investment, to help your community to create jobs, that is, it is invested in only your "selected" region (remember, whatever is decided, city state or county). Who manages these funds is done by a group of people that directly electorally accountable to the contributors of the pension system in that region. Basically, the pension money that you put to one side is to directly contribute to your local community, as it should be. So for example, say the community requires a new road of even public. The money is used to build these things. So how do you get a return on your investment? SIMPLE. The region and Pension system come to terms on how much the public work cost to build, and an approprate level of taxes are weighed onto the community, and the pensioner system gets their fair cut!
That is one solution. Think about it.
You see, pension money should be used by governments to bail themselves out. Like the US government has been doing since the Social Security system started by F. D. Roosevelt in the '30s. Furthermore, pensions must be low, that is zero risk investments, because everyone of you are counting on it in 40 or 50 years time! No market can provide this kind of protection. Neither can any bank or financial house, for everything fails eventually, including banks and financial houses, and 50 years is a long time. No your pension money must always be in YOUR control, in your own personal Pensioner Account that the government can not control but you do.
Anyway, I have given a very simple solution, it is more involved than it appears but only in the ways you use it. The important point is this, PENSION MONEY MUST NEVER BE AT RISK! But no government will do that, why? cause they all want to eventually be steal it, if they need it, of course! Which as you can see in Greece...has happened.
Exactly. Given the 200% run-up in in flated stock prices- these fully invested behemoths can't reach 100% funded??
It's a fucking shit show. When the bubble bursts- where are these bankers/fund participants gonna go for a return??
https://youtu.be/rY-XDQN6ipE
This is only a 'shocker' if you haven't been paying attention. I'm with you, that 2 trillion dollar shortfall exists in a time when almost every asset class is in a bubble. Once it pops, that shortfall will grow, quickly. Once it pops, governments will likely experience a big drop in taxes paid as well, which will make the problem even worse.
This was their plan all along. One interest rate hike....and all the pensions gone.
The question now is when they will decide to crash the system.
quit your trash talk. boy! /s
Seriously buzz killers. Wats on on teeve now?
I know, right? Like, america is broke, ok? YAWN. America has been broke, like, forever.
...now excuse me while I monch on pink slime sliders, chug some corn syrup, and bingewatch reality TV - so much better than real reality anyways.
If the pension funds would simply invest in high yield tranches of triple A rated MBS "investment vehicles", these shortfalls would all disappear; or simply have Black Rock et. al. manage their portfolios for a meager
2/3rds of the profits----wait what year is this? oh, been there done that. OK, plan B, if they simply invest in triple A rated bundled sub-prime auto loans; or have Blythe Master of Santander Consumer USA give them
guidance, then happy days are here again.
Word. The jaws have just BEGUN to bite. By about 2020 this shit's gonna start to get very real and very ugly even without a major market pullback.
If it's not backed by a printing press (state and local), you may get nothing. If it is backed by a printing press (SS), you get paid the nominal, but in devalued dollars.
The "but I was promised" crowd has a very rude awakening coming to them. "You fucked up. You trusted us."
IMO, anyone who is getting a fedgov pension will get paid what they are expecting, those dollars will just be greatly devalued. This is one of the reasons th CPI greatly underestimates inflation, so that they can get away with very low cost of living increases. State and smaller govt pensions, on the other hand, cant print, which will make it pretty interesting, and particularly unpleasant if you own property in one of these districts.
Just curious, why do you say "by 2020 this shits gona start to be real"? why that year?
If we make it that far, we won't go much further what I have seen. At least in my area I can confirm schools and other public entities signing on for really FUBAR loans that gave them quick cash a few years ago - but, the balloon terms sitting out in the early 2020's are absolutely so amazing that it is nothing short of the banks just putting a date on a calendar that says "the system ain't going any further than this date for sure." Or at least they are pricing in massive dollar devaluation. Either way, pensioreers are going to get screwed.
That's when the increasingly upside-down condition is going to start eating into principal for many pensions. Even good returns on investments won't keep up with the draw of the obligations.
Up till now the amount of money in the pension plan was still going up. The losses were merely PROJECTED losses. Wait until they start to become REAL losses.
Not that I'm saying they're going to have no money left, but the trajectory will become negative. And I'm not talking about every persion everywhere, but the balance will start to tip negative roughly around 2020. It will be a death of a thousand cuts. First you'll see more stories about local cities/municipalities in trouble, then states, then.... who knows.
It's not going to be a sudden break, it's just going to be the slow unwinding of many unfulfillable promises. It will be the generational story of our time.
makes sense. Ive never looked into it that much. Its going to be interesting to watch, thats for sure. As I said above, its going to hurt to own property in any of those bankrupt districts, they will jack the taxes up to the moon. As a 30 year old, I know I will be absolutely raped to pay for the unrealistic promises made to older generations.
Just wait until you're paying as much in state income tax as you do in federal. That's coming in some areas, too.
I believe somewhere in all this you'll get a story about some sad sack who ended up paying more than 100% marginal rate when you combine state, federal and local taxes. California's already at 12.3%. They'll be at double that in a decade or so because they will HAVE TO.
When I add up all my taxes (including the local "library tax", property and township taxes, 6% PA sales tax I pay on every retail dollar I spend, etc.) I'm probably already around 50%.
Word. The jaws have just BEGUN to bite. By about 2020 this shit's gonna start to get very real and very ugly even without a major market pullback.
It's a mathematical certainty. For a clear and concise explanation of this clusterfingie, read Karl Deninger's book Leverage.
Anyone relying or planning to rely on pensions, social security, or welfare will be in for a rude awakening eventually. It's as simple as that.
Watchdog: Thousands join the '$100K club' for pensions
http://www.ocregister.com/articles/pension-639019-public-club.html
Back in 2005, some 1,841 retirees pulled down more than $100,000 a year in pension checks from the California Public Employees’ Retirement System.
By 2009, this so-called “$100K club” had more than tripled, to 6,133 members.
And by the end of 2013, membership had nearly tripled again, to 16,838, according to data from CalPERS.
We’re talking growth in excess of 900 percent in just eight years, and no one expects the $100K club to stop growing any time soon.
And you thought your property taxes are high now......just wait.....
What the heck are banks/ .gov / lien holders going to do with all that land?
Christ onna crutch, it costs $30,000.00 base to knock down a small single family and put it to bed.
You can't afford to Detroit the whole country's urban / suburban areas.
You can if the Chinese are paying.
New tool: fire, just think how good your pension earning FD is going to get... Big win.. Clearly they will need to burn these to the ground. Bonus: if the sun continues to cool as the Sat. data shows perhaps it can warm the planet..
Low ball figure they are far worse off.
The "Shocker" is two in the pink & one in the stink. This thing about pensions has been known for years. Not a shock at all.
"and thus the feedback loop could continue to gain traction." = on a long enough timeline, the survival rate for these funds drops to zero.
I'm not worried.
It's not just city/state pension funds that are in trouble. I keep hearing rumors the giant Teamsters pension fund is in big trouble and will be force to cut payouts drastically.
It's almost like there was some vast conspiracy to transfer wealth from pension funds, insurance companies, savers and the middle/working class by rigging interest rates.
Oh wait....
another writer cherry picking data points. 2.4 percent for calpers is correct. however what did they earn last year and what is the two year average? what is the 3 year or 4 or five year averages? does he know or does the writer have some axe to grind? what is the 2 trillion dollar hole the writer claims exists come to divided by the "25" pension funds? you can bet "2 TRILLION DOLLARS SOUND MUCH MORE EYE CATCHING"?
Calpers lost a quarter of its value in 2009. Two years later, it earned a record 20.7 percent only to see the gain drop to 1 percent one year later.
http://www.bloomberg.com/news/articles/2015-07-13/calpers-earned-2-4-las...
Good thing most pension funds are getting 8-10% retrun on their investments.
Gafaw...gafaw...gafaw.....
Accounting practice...... who knew that those weenies were taking guerrilla training as well?
GAAP vs Non GAAP.
(snikker)
You can get those returns when you invest in shale oil, tar sands and Greek Bonds.
GG, Who are you kidding? The teachers pensions in CA will cost over $80 billion alone. The state is toast going forward on this issue.
I have family that are teacher in LA. Funny that they don't like talk of "conspiracy" theory theories or a little quake alone the San Andraes.
Future zombies
Generational theft of historic scale, all by design. People make fun of Greece and say nasty things, but we are Greece, as is Europe. Promissory notes and central banking have replaced thugs with billy clubs.
Banks not tanks, reserve notes un-backed by anything other than ether, promises to be paid with crocodile tears and pain and suffering on the part of pensioners and the citizenry.
Low interest rates have transferred vast amounts of wealth to insurance companies, savers, and pension funds. The MTM value of their holdings has expanded dramatically greater than the rate of growth in the economy on account of such, particularly in longer-term bonds and in US equities. Obviously unsustainable, and a situation which will rectify itself with higher interest rates and higher inflation.
If you want to see pain inflicted upon the population, just wait till interest rates start rising and those equity, bond, and RE portfolios go into meltdown. Nearly all pension funds only minimally own meaningful hedges and counter-cyclical assets, such as gold and quality industrial stocks, that will thrive in the rising rate environment.
Teamsters is toast. I looked at a letter my neighbor received from them and it's downright scary how bad their fund is. They are going to cut big this year and then it will still run dry. They are not going to cut anyone over 80, but the rest - go back to work
What you heard is true my friend. My 68 year old uncle drove OTR trucks for 35 years as a Teamsters member. He retired in 2012. His pension was enough to for him to live on in a paid off house.
This year, that pension wa cut 30%. Just like that.
Now he's looking to get back in a truck because the new pension (not what he agreed to) isn't enough.
America... FUCK YEAH!
And meanwhile, public employees with less time worked, get far more every month, because they have a gun to stick in our face and collect whatever they need. If you don't think there's a gun behind every law, fee, permit, and tax, and by extension every public pension, then you're not paying attention.
They can't be insolvent until people cannot pay or start sticking guns in THEIR faces and simply refuse to be robbed any longer.
We are approacghing the event horizon, where shit goes sideways.
Spending 2 to 3 Trillion on wars of aggression against people that were never a threat is more important than American working people.
War is the one place where "the Broken Window School" of economics actually makes sense.
Did you not read before you replied?
Right, because spending money to blow shit up and then turning around and spending even more to rebuild it so it looks like it did before you blew it up makes perfect economic sense.
But it's good for Lockheed, Booz Allen and all the other Government contractors.
Spending 2 to 3 Trillion on wars of aggression against people that were never a threat is more important than American working people.
You can say that again
There is nothing less important to American politicians than American working people. The IRS, ZIRP, QE, open borders, and NAFTA + all subsequent free trade agreements prove it beyond any doubt.
Only the willfully ignorant and terminally stupid believe otherwise in the face of mountains of evidence to the contrary.
I see we have at least 11 of those here. Probably trolls from HuffPo or FreeRepublic.
Spending 2 to 3 Trillion on wars of aggression against people that were never a threat is more important than American working people.
War is #1 on the list of what the US electorate craves.
No 2016 presidential candidate stands a chance unless they promise as much or more war than Obama and McCain did. Even the Jewish commie from new England is promising full support for Israel as well as more and more war against damn near everyone.
And House and Senate candidates couldn't score campaign funding dime one unless they, too, promised to deliver more and uglier wars.
The so-called 'U.S. Electorate' is deluded and generally fucked over. Every 'cycle', politicians come along and make promises, and every one of the promises is broken. The stage flips back and forth every cycle (Rebublicrat/Demogrican), and the same thing happens, again and AGAIN.
By the way, it doesn't matter who votes. it matters who COUNTS the votes (I think the Deibold guy said this, but maybe it was some Kike Commie guy, a long time ago).
I suppose you read poll results. Don't you have any idea who does these 'public opinion' polls?
FUCK!
Just when I thought the hedge et. al; were starting to reach these 'tards, along comes The Donald and they all run back into the kindergarten.
Ya' know yer fukked when the frontrunners are a Clinton and a Trump.
Oh yeah, the american working mans hell, see ya, don't want to be ya.
No, I guess you would'nt want to be me. Debt free, big home paid off, because I worked all my life and never took unemployment.
Meanwhile you must enjoy being a fucking leech and commie socialist sucking off the govt teat.
Why were you grounded, there Flight Engineer?
Mental heath issues?
Who thought it was a good idea to give the EMPLOYEES better fucking retirements than the EMPLOYER (private sector taxpayers) and make the producer pay for those who produce nothing.
I do get the feeling after trying to wake people up about this pension Ponzi scam for past 15 years, they are finally understanding the Math and those property tax bills are getting to high for them to handle.
It's very upside down when the fireman or local cops have a pension plan 3x the size of the neurosurgeon down the block. Plus, the old doc paid for that plan himself while the others were funded by taxpayer money, not the recipients of that largess.
Good point. Silicon Valley cops out-earn the engineers of the tech sector, and they get a pension to boot while the engineers are booted out of their jobs as quickly as firms can find foreigner replacements for them.
If that ain't an injustice, I don't know what is.
^^^^ This.
I know a cop who retired at age 50 ... his pension is just over $100k (and it is adjusted for inflation every year). I am an engineer around the same age with 27 years in industry. If I retired today, I would collect a pension of about $21,000 annually -- with no cost of living adjustments, assuming the pension fund even stays solvent (which it won't, I'm sure).
I guess I should have been a cop.
Had lunch with a California government employee this week...
He insisted I have no idea what government employees have to "put up with" and for that they deserve their pensions.
hard to be a fuckoff every damn day
Having been a state employee at one time I know some of it...
Free lunches daily from contractors who want their company selected for the next project? Check. And we're not talking McDonalds, we're talking nice restaurants, strip clubs, sushi etc.
Two hour lunches every day. On my first day on the job, my boss, his boss, plus my crew all went to Hooters and didn't come back for two hours. They told me that is how we do it and don't worry about it.
Being told to go surf the internet when asking the boss for some work. Being told to 'slow down, you're making the other guys uncomfortable working so hard'.
22 days of paid vacation, plus 16 holidays, 8% match on 401K (they put in 8% of my salary at no cost to me) 12 sick days, civil leave, and all other kinds of leave, every year.
Paid training and trips to training events in Vegas, Chicago, Seattle, et al. every year.
Guaranteed raise every year. No layoffs, ever.
Yeah, those government jobs sure are tough. They're much harder than typical private sector jobs. All private sector jobs blow away those government jobs in terms of salary, benefits, expectations, pressure, and of course job security.
I feel so bad for the guy you're talkign about. Real damn bad.
Wow, I just shed a tear for all they have to put up with.
Fucking outrage. Enjoy whats coming down the pike you goober fucks.
My married neighbors are both officer firefighters in a local county. They are in high cotton.
Resource extraction and manufacturing are the core industries of any economy of growth. Everything else is a supportive industry.
In other words, you must make something, not just shuffle paper and money around to create wealth formation.
But all that's been gone since the mid 1970s. Pensions were a decent idea of the time when employees mattered as people not expendable liabilities.
Didn't hurt either life spans were shorter either.
Resource extraction and manufacturing require roads & bridges, police, firefighters, schools, municipal water, etc. to function. Roads & bridges, police, firefighters, municipal water, etc. require resource extraction and manufacturing to pay the bills. It's a symbiotic relationship.
Move all the resource extraction and manufacturing offshore and the roads & bridges, police, firefighters, schools, municipal water, etc. are in big trouble - no funding!
The idea that we could get rid of our industry and instead be purely a "service economy" was deeply flawed from the start. Who's going to pay the rent if all we do is run around servicing each other?
Yeah but, but, but, Slick Willie said the service economy was the bridge to the 21st century, kinda like the bridge on the river Kwai.
He overlooked telling that that bridge is built only half way above a high Canyon
So, they sell out up north and move down south, the place they despise more than death itself. What happens when their pension dries up? Can we send them back, COD? Maybe, to feed the homeless?
http://www.youtube.com/watch?v=8Sp-VFBbjpE
"Who thought it was a good idea to give the EMPLOYEES better fucking retirements than the EMPLOYER (private sector taxpayers) and make the producer pay for those who produce nothing."
Truthfully, in many states and municipalities it was the politicians' response to taxpayers' demands. Election cycle after election cycle the majority of taxpayers voted for politicians who promised increased services: better schools, more cops, increased fire protection, more playgrounds for the kids, better roads, etc. At the same time the majority of taxpayers voted for politicians who would "hold the line on taxes".
As a result, budget cycle after budget cycle the politicians negotiated contracts with the public employee union reps that gave minimal pay increases today in return for greater pension and insurance benefits down the road. But they didn't fund the future pension and insurance liabilities. It worked for decades.
Now those "future" pension and insurance promises are due, the taxpayers are furious, retiring public employees are dumbfounded that the money isn't there for them, and the politicians and public union reps who negotiated the deferred payment agreements are long gone.
It's always easy to be generous with what you think is other people's money.
Who thought it was a good idea to give the EMPLOYEES better fucking retirements than the EMPLOYER (private sector taxpayers) and make the producer pay for those who produce nothing.
It started with JFK signing the order allowing collective bargaining for federal workers (something the old commie FDR didn't even allow). Then it was on to the states who followed suit for teachers, firemen, policemen, etc.
Because government workers aren't entitled to freedom of association?
Seems to me the constitution is pretty straightforward on that point....
It's not a "freedom of association" issue. Government jobs are supposed to be service positions, like the military. When it's taxpayer funded, it's supposed to be "take it or leave it".
Okay, just try not joining a union if you are a teacher, policeman, or fireman east of the Mississippi or north of the Ohio (except: Wisconsin - thank you Governor Walker). What does the Constitution say about that gun to your head -join or quit?
Many of those pension plans would be fully vested if the Wall Street parasites had not gotten their hooks into them.
"the 25 largest U.S. public pensions alone have $2 trillion less than they need"
Well aint that just fucking great... debt to the left of me debt to the right, here i am stuck in the middle.
Well aint that just fucking great... debt to the left of me debt to the right, here i am stuck in the middle with jews.
FIFY
There's a big statue as you come in to New York harbor. On the base, it is written, 'Give me your Gyps, your bankers, your Kike assholes yearning to score big,...'
(Uh-oh. I'm now on AIPAC's 'naughty' list... does this mean that I can be forgiven by picking my Kike-owned politician of THEIR choice and making a 'substantial donation'?)
Don't be anti-semantic.
"Pension Shocker: Plans Face $2 Trillion Shortfall, Moody's Says"
At least "shortfall" starts with "s" like the word for what really happened does; "stolen."
Liberty is a demand. Tyranny is submission..
You can retire so long as you keep working to pay your bills.
"America’s pension problem isn’t likely to be resolved anytime soon"
Oh it'll be resolved all right, as they will simply vanish into the void.
"Who could possibly have seen this coming???"
Total greed begets total destitution, just not yet.
I hope all the comminist supporting union funds go under
Thats right, its better to pay workers 50 cents and hour and work them 80 hours a week
Times were so bad in the 50's and 60's when UNIONS had power.
Honest money gave them power. The US couldn't subsidize offshoring.
The TSA is union-represented. Are you a member, you stupid fuck? IN FACT, MOST union membership is now 'governmental'. YES, TIMES WERE going downhill in the 50's and 60's. The culmination was in 1971... right BEFORE Detroit was gutted, and turned into a haven for muslims and crackheads, it was estimated that the 'average' UAW worker was compensated at a rate of $78.00 AN HOUR (pay, sick pay, time off, retirement, medical, dental, vision care, etcetera).
FUCK YOU.
Get me that burger I ordered you goddam fucking loser.
HERE's your beef.
I hope you buttered your buns up. I really don't care if you did or not, though. YOU might (your pain will be lessened).
How many Union members does it take to screw in a light bulb? I'm sorry I'm not a theoretical mathematician, so I can't give you the number without one of those Cray Supercomputers (I mean, the members that deliver the ladder, and the members that have to shut off the circuit, and the members that have to carry the ladder, and the members that have to inspect the work the others have done, and the members to rope off the area because of 'safety issues', and the members that have to recruit the members to take on the dangerous task of actually CLIMBING the ladder...). Are you SURE you have on the proper protective clothing? SHIT! I forgot. Is it 'righty-tighty' and 'lefty loosie'? What if I'm in the SOUTHERN hemisphere? Does this rule change? OH YEAH! It's been one hour and 45 minutes. TIME FOR A MANDATORY 15-MINUTE BREAK!
I did a job in a government building. Two of us to repair massive water damage from a broken sprinkler pipe. A light was out in one of the rooms. The contract Union maintenance crew stated they need to fix it.
We had to wait over an hour, as they shut off power, and three of them worked on it.
One did the work, painstakingly slow. One held the ladder (6 footer) and one held a flashlight.
For what is worth, I could have done it in 15 minutes, with the power on, with one hand tied behind my back.
Does that come close to an answer?
I really don't understand what the problem is here. Look, it's all just paper. Just one week of Google moves like Friday's and we have enough increases in pension fund values and the problem is fixed. Maybe two weeks for another $2tn to cover fees taxes and commissions. Really, this Moody's panic is unwarranted.
Firing the deadweight is out of the question for these little empire builders..
Everyone knows govt. employs one to do the work, and four to supervise that one.
I just saved $1.6 tn, so whats my prixe ?
Well, we know a little how this is going down. Just have to recall what happened in the 1970s and 1980s to pensioners when the big-iron companies folded their retirement funds and handed the liabilities over to the Feds. Anybody expecting a retirement would do better to plan on 10 pct and how to live on that.
The next phase of pension destruction will revolve around the public and financial sectors who have mostly avoided the pension carnage over the past 20-30 years.
Too funny. I retired three years ago from a corporation which sends out the funding balance each year. They are over 120% funded. I sleep well.
Ask them how they plan to fund FUTURE liabilities. They also ACCRUE their numbers. Your statement belies an ignorance you should work on.
On what actuarial assumptions? Solvency was routinely exxagerated in the 1990s, mostly to enrich executives of such plans. Benefits were even augmented, at the behest of unions in the era as well. Which, in hindsight, proved to be a giant mistake.
Take the lump sum and buy phyzz, you'll thank me later.
Overfunded based on what return? Most funds use like 8% annual return to cook their books. Oh look, we're overfunded, time for executive bonuses
Trust is often misplaced in the world of Enron bookkeeping.
A corporation a with a defined benefit pension plan. Damn! How old are you? 90?
I've worked for many corporations and have never heard of such a thing. IN fact, since about 2000 even getting a match on a 401k or a merit raise has been a dicey proposition.
For over half of my career, the economy hasn't been good, and corporations are always cutting and skimping, trying to survive. Laying off, cutting staff, freezing salaries, closing shop, that kind of thing.
I hear older people talk about 'getting a good job' and I have no fucking idea what they're talking about.
The only 'good job' I've ever had was for a state agency. The corruption and layabout attitude drove me away, but looking back, I should have just said fuck it and took everything I could get, like everyone else seems to be doing.
Ethics? Morals? Who needs that shit. Just give me my money...
That seems to be the current ethos at every level. Not a shot at you, but when you mentioned a corporate pension, I imagined oxymorons like 'military intelligence' or 'healthy gay' or 'empowered woman'.
Only $2T? Remember that such is before interest rates really start rising, which certainly will destroy the value of long-term assets and real estate held by such plans. I know a lot of pension fund managers are running around claiming nonsense such as, "higher interest rates will fix the problem", but that simply won't work -- the plans are under-funded and shifts to interest rates will actually make the problem worse. Unbelievably the actuarial models often assume little change in the value of the investments, particularly in equities, in a higher rate environment.
A great many pension fund manager have been abusing the plans for their own personal benefit, with outlandish compensation. It is in their interest to downplay the true problems that exist in solvency. The same trouble exists in the banks and insurance companies, who are currently running around claiming that higher interest rates will magically enhance their profits -- again, more nonsense.
Has anyone actually ever looked to see if the money is actually in these pension accounts?! How does anyone know for sure that the money actually exists and that it hasn't been siphoned off over the years to pay other 'more' important bills. It would be nothing to just pay someone's retirement as they retire - drip drip drip.
You just won a job at Goldman Sucks for thinking like a banker.
Just numbers on a screen my friend, until someone needs to be paid at vestment.
Ooops, it was there last time I looked. signed Jon Corzine.
What is 'money'?
I don't think anyone believes that there is accounting fraud in the holdings of the pensions. The problem largely is that payouts are completely unsustainable and are based on fantasy-level returns. Additionally, many public and private plans have been subject to extensive gaming and looting, not only by over-compensated pension managers, but also by beneficiaries such as the public sector workers who pad their hours in their final years of employment to game their payouts higher.
What's funny is when these financial people try to sell this crap stating they guarantee an 8% return.
You have to listen closely for who they say will get the 8%, it may be their commission rate. "I just mentioned an 8% return, I didn't say you'd be the one getting it my little muppet friend. Now would you like to up
your contribution amount, because I guarantee there will be even more upside!!"
"I don't think anyone believes that there is accounting fraud in the holdings of the pensions"
Ever heard of the DTCC? Headquarters on Water Street, har!
Only 2 Trillion$ ?
There surely must be more to come which supposedly will also be unaffordable
in order to continue handing over Trillion$ to the financial elite in
what has been characterized as the biggest swindle and transfer of wealth in history.
The sum of all the handouts/bailouts to the plutocrats totals to a theft of trillion$,
and that doesn't even include the increased gifts to the war merchants and the health hucksters.
Summary of Bailouts
http://www.sourcewatch.org/index.php?title=Total_Wall_Street_Bailout_Cost
Unparalleled Financial Scam
http://www.marketoracle.co.uk/Article24837.html
More than $9 Trillion
http://www.zerohedge.com/article/tax-payers-tab-cool-9-trillion-and-then...
http://www.globalresearch.ca/excess-reserves-at-the-federal-reserve-one-...
If they have shortfalls now with stocks and bonds at their apex, things are going to get ugly!
I'm OK. I have specially shaped tungsten bars selling right now. I've bought out all the gold paint in town.
QEP for Pensions? Keine Problem.
After putting in 30 years, last month I "pensioned out" from a union gig @ 50% avg annual wages i.e. net take home to avg inc.
(Union gig here being blue collar but w/ both undergrad and post grad Finance stationary, so kinda fancy myself semi-literate in money-ese.)
Sum total contributed over career was 70k By my calculations, the FVA @ 8% the CF lasts 7-8 years (at a more conservative 4%, 5 years.) After that yeah I'm living off others' contributions - and hopefully - sustainable growth projections (managed by ethical fiduciaries HA?)
So a question to my ZH brothers (signed on 4+ years back), am I a parasite? I have factored in a reset aka haircut of between 25-33-50 percent btw but you'll pardon me I ain't quite up for voluntarily cutting the number.
Time will tell of course ... If ya wanna H8 me bros that's cool, but was justa workin' stiff who decided to - both - take the offer AND get outta the way for another - younger - guy to get (make that earn b/c I DID work for mine) a paycheck.
Any reply / rebuttal welcomed ...
70k contributed for 50% wage replacement? I wouldn't accuse you personally of being a parasite, because you weren't the person who made the decision to offer such an unsustainable payout schema in exchange for trivial contributions. But I do believe that you've been sold a bill of goods that probably will substantially fail to deliver. Plan accordingly!
I think you're fortunate to have had the opportunities and smartly took advantage of them.
Remember us youngins won't get the opportunity and will by design have to support the structure you have until it falls apart.
are you a parasite? Well if you complain and demand the next generation pay while getting nothing when their time is due, Yes.
Until then enjoy.
You should double dip and take another public taking job pronto. And then you can tell the taxpayers you are actually HELPING them as you don't need health insurance (as you already have taxpayers on hook for that) and another Schlub who needs the job would need health insurance costing taxpayers. See you public guys are the greatest.
/s.
I've no opinion on whether or not you are a parasite, but you can estimate the sustainability of your pension by looking at just a few other numbers.
You said you're getting 50% annual wages and contributed $70K. Not sure of your annual wages, but let's go small and say you were bringing home $60K annual. So your pension pays you $30K annual. What amount of money is needed to ensure a $30K stream for the next 30 years (again, not sure how long you'll live, but that's a safe assumption). It's a simple net present value of a stream of money formula:
At 4% discount rate for money you'd have to set aside $518,761 today to pay for a stream of 30 annual $30K payments that exhausts the account after year 30.
At 8% discount rate for money you'd have to set aside $337,734 today to pay for a stream of 30 annual $30K payments that exhausts the account after year 30.
At 9% discount rate for money you'd have to set aside $308,210 today to pay for a stream of 30 annual $30K payments that exhausts the account after year 30.
Your $70K looks like a stellar investment, only your pension wasn't only an investment. Pensions have always been looked at as deferred compensation, things you earned as part of your salary but don't take posession of until a later date. Since you're union (not sure whether that's private union or government union and to me it makes a difference), it was part of your negotiated compensation package, so it was a part of your salary.
All opinions on past history aside, what you have to ask yourself is did the union set aside enough money to pay out the amounts listed above to all entitled employees. If they did, then you're golden. If they didn't, then you have a worry. The Pension Benefit Guaranty Corp (the branch of the Fed Govt that handles bankrupt pension funds) doesn't pay much on the dollar if you have to go that route. The retirerd salaried staff of GM found that out recently when they got screwed in the government bailout of GM (they lost their pensions and went to PBGC). If you're a government union worker, then you'll have to hope that the entity funding it has killer (literally) authority to wring the tax dollars out of the public because there currently isn't a government authority to help you.
If I understand correctly, you 'contributed' $70,000 dollars over a period of 30 years (about $2,300 a year, averaged).
NOW, if you hooked up when you were 21, you'd be 51 right now.
In REALITY, your EMPLOYER was forced to pay 'protection money' in the form of 'investments' on YOUR 'behalf' to a group of 'INSURANCE COMPANIES' under threat of DURESS (YOU NEVER SAW, HELD, OR HAD IN YOUR HAND any of the money that you state that you 'contibuted', did you? DID YOU!?). You, and your employer, never had the benefit of using this money as YOU or HE/THEM saw fit (you BOTH TRUSTED, and had CONFIDENCE IN, these 'Union leaders'; and the 'INSURANCE/INVESTMENT COMPANIES'). You'd best get a grip on how the 'financials' really work...
Personally, if I was YOU, I'd be thanking God that I am getting payed as promised, AND NOT COUNTING ON THAT NEXT CHECK (and looking for another job NOW, because this system of cronyism is dissolving before everyone's eyes). FUCK 'retirement'. Get some food, and water, and guns, and ammunition, and Gold, and Silver... because you can't EAT paper or digitals... The people in GREECE are now figuring this shit out...
how much did they give you? did you cash out or are you getting a monthly check?
Take the lump sum, YESTERDAY!!! Those lump sums are very high right now as they are inversely based on low rates. The lower the assumed rate, the higher the lump sum and visa versa. So when rates rise, those payouts go down. NOW IS THE TIME TO CASH OUT! Then buy phyzz and get in a boating accident. Thank me later.
You are no more a parasite than the Greek people working for government unions. You are simply the beneficiary of government largesse.
What a coincidence, I too am underfunded by about two trillion dollars.
Dear (?),
I see that you are requesting a large cash infusion. As it happens, the nation I represent happens to be looking for a place to put the excess cash that it has created. We might have some common ground here, and be able to help each other.
IF you promise to sell us your mineral oil reserves, we promise to make you rich beyond your wildest dreams of avarice (how's 2 Trillion sound as a down payment?). You simply have to do us a 'little' favor. Invest any profits that you gain in our 'banking system' (at a promised return of AT LEAST 5%).
Please inform the others in your exporting organization. Together, we can make this good for THEM, as well!
Sincerely,
Secretary Of State Kissinger
(Call me Henry/Heinie)
Don't worry. In a state of financial emergency, the big banks will all chip in, thus enabling all citizens and even some our guests from other countries to have access to food, water, shelter, clothing, and utilities...until the storm blows over.
APRIL FOOLS!
What's really going to happen:
1.) Some pension payouts will be reduced.
2.) Some will disappear completely.
3.) Some municipalities will raise taxes to cover the difference, but will probably end up mismanaging that money too.
4.) Parents will move in with their adult children.
5.) Oh, and the US government will bail out any banks or financial companies who lost money in the whole pension thing. The taxpayers will simply pay the bill. No problem. Works every time.
Pension shocker? Yeah, only if you don't have a brain. You could easily see this coming 20 years ago. It's been a topic of discussion in our family off and on for a long time. But rather than deal with it, our politicians and big businesses kept handing out the goodies and putting it off until tomorrow. Well, tomorrow is here.