Are Collapsing Pensions "About To Bring Hell To America"?

Tyler Durden's picture

Authored by Mac Slavo via SHTFplan.com,

The toxic dollar is bringing hell in a handbasket.

Along with the student loan debt bubble and other major financial factors, the looming pensions crisis is bound to be the death of us all.

Because it’s based on a future promise to pay, it has long been a benefit dangled to solve strikes and union disputes – because, in the end, it is just more debt, whether private or public.

With tens of trillions in unfunded liabilities, the weight of an avalanche remains dangling over our heads. An aging population is cashing in on needed retirement benefits while the younger generations must support multiples that are unsustainable financially.

Somewhere between the retiree that needs clothing, food and lodging, and the bankruptcy of cities and state governments is the makings of the next economic crisis.

via AgainstCronyCapitalism.org:

This is one of those things that few will pay attention to until it’s a 5 alarm fire. Then the policymakers will run around with their hands in the air saying they didn’t see it coming.

 

Of course they did. But addressing the problem is hard and will make people unhappy in the short term.

This blog pointed out the sad, and quiet fact that entities like the government of South Carolina are deep in debt over pensions. Everywhere there are failing social systems.

And somewhere, the rubber is going to met the road, and people are going to get hurt.

As SHTF previously reported:

In 2014 a new Federal law made it possible for pension funds to cut benefits for their recipients.

 

[I]n October of [2015] the canary in the coal mine fell over and died when Illinois announced that the State was posting pension payments because it ran out of money.

 

Fast forward a few more months and things have been taken to the next level. The Central State pension fund in Kansas became the first such fund to take advantage of the 2014 law as 400,000 Americans who depend on their monthly pension income to pay for such things as their mortgage, groceries and medical expenses saw an average of $1,400 per month sliced of their monthly benefits.

Unfortunately, there may be no avoiding some very painful lapses in checks in the difficult years ahead.

As Market Watch reports:

But take a look South Carolina’s government pension plan, which covers roughly 550,000 people — one out of nine state residents — but is a staggering $24.1 billion in the red.

 

This is not a distant concern, but a system already in crisis.

 

Younger workers are being asked to do much more to support the pensions of retirees. An analysis by the The Post and Courier of Charleston noted recently that “Government workers and their employers have seen five hikes in their pension plan contributions since 2012, and there’s no end in sight.” (Most now contribute 8.66% of their pay, vs. 6.5% before the changes.) At the same time, the pension fund has been chasing more stocks and alternative investments instead of relying on stable investments like bonds that may be much less volatile but generate only meager returns.

 

And if that’s not troubling enough, South Carolina’s pension fund is far from alone.

Yeah.

California’s Calpers public retriree system is notoriously underfunded and doomed to implode. Chicago, Detroit and other urban wastelands are sagging under abysmal debt. Dallas, Texas pensions went insolvent. Puerto Rico is nothing but a propped up holding corp(se).

Something massive has been swept up just under the carpet.

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All Risk No Reward's picture

Politicians aren't peers.  They are Rental Rhetoricians who BETTER DO WHAT THEY ARE TOLD, OR ELSE.

They are clerks.  Nothing more, nothing less. Sometimes they are very well paid clerks, but they are still clerks.

The Debt-Money Monopolist sith Lords are their masters.

That's why the Republican Party Inc. passed ObamaCare (they controlled the House and the purse strings).  The Banksters wanted it and the Republicans delivered.

It is why ObamaCare can't be quickly repealed now, and why it won't ever be fully repealed.  It won't even be repealed as it does its part to asset strip the masses.

Offthebeach's picture

Drink much?

Democrats controled the House

ALL Republicans voted AGAINST Obamacare, plus 34 Democrats.

Bigern's picture

The Beast. His followers will flow. They will vent their hate at the sacrificial lamb and his followers. The war is upon us.

All Risk No Reward's picture

If I recall my Revelations, there is a Beast system with number of Nero (666) and it is ridden (controlled?) by a very wealthy woman.  What's her name?  Oh, Whore of Baylon, right?  Wasn't debt-based money first developed in Babylon?

Let's look around and see where we can find the modern day incarnation of the Roman Empire.  Hmmmmm.  It's a tought call.  NOT!

And is this "Nero numbered beast" controlled by an intenrational banking cartel that "fornicates" (illicit relations) with all the nations?  Check.

Do those who go off the beast system's "plantation" have a more difficult time earning money issued by the "woman" such that it can be hard to "buy or sell" (don't worry, it will get worse... much worse)?

Are the masses programmed (mental imprint) to do the work (hand imprint) of this beast empire system controlled by the Whore of Babylon?

“Universal literacy was supposed to educate the common man to control his environment. Once he could read and write he would have a mind fit to rule. So ran the democratic doctrine. But instead of a mind, universal literacy has given him rubber stamps, rubber stamps inked with advertising slogans, with editorials, with published scientific data, with the trivialities of the tabloids and the platitudes of history, but quite innocent of original thought. Each man's rubber stamps are the duplicates of millions of others, so that when those millions are exposed to the same stimuli, all receive identical imprints. It may seem an exaggeration to say that the American public gets most of its ideas in this wholesale fashion. The mechanism by which ideas are disseminated on a large scale is propaganda, in the broad sense of an organized effort to spread a particular belief or doctrine.”
- Edward L. Bernays, Propaganda

What word ius synonymous with "imprint?"  Oh, that would be "mark."

It all fits -- and describes the way the modern world actually works much, much better than the ordinary person living in this modern world could describe it.

waterwitch's picture

This could easily be ushered in by a cyber attack on the Nation's electrical grid:

 

https://www.youtube.com/watch?v=uObV-AJDb98

 

A must watch for preppers (it's not what you think).

Logan 5's picture
Logan 5 (not verified) JRobby Mar 16, 2017 1:46 PM

The more muzzies you bring in, the more flying carpets you have to sweep the problems under

AGuy's picture

"The more muzzies you bring in, the more flying carpets you have to sweep the problems under"

"Ali Baba and the forty thieves".

They are going steal everything, even the stuff that's nailed down.

All Risk No Reward's picture

We have one that can see!

I'm just letting the soon-to-be face ripped Muppets WHO STOLE THEIR PENSIONS...

The Debt-Money Monopolist Sith Lords of the Banking Clan who devised the Debt Star.

Oh, you didn't know you were on the Debt- Star?  This weapon is much, much more sophisticated than the Death Star.

When the Debt Star blows, the Sith Lords of the Banking Clan get to control all the assets that the Death Star would have blown up.

But, don't worry, you will be given your five minutes of hate on [fill in the blank with whatever emotion driven over-generalized prejudice you have to acquiesce to against all reason...].

That's enough for you, right?

JRobby's picture

Sorry I beat you to it junction (TROLL SCUMBAG)

I assure you it was just dumb luck that it happened that way. I don't sit on the edge of my seat in my rapist uncle's basement refreshing 6 screens on 6 computers evey 12 seconds to insure my irrelevant or inflamatory comment gets posted first.

Down vote away pus bags! Die spitting blood on a dusty, windblown street under a brilliant, cloudless, blue sky day at high noon while stray dogs lift their legs and "mark" you.

Stuck on Zero's picture

Those bus drivers in Northern California who expect $240K pensions for life after age 52 are going to  be disappointed.

Rabbi Chaim Cohen's picture

When you build your house on a foundation of sand you will be disappointed with your future.

 

You had BEST be at the helm of the USS You&Yours at all times these days...

wildbad's picture

well doosh obviously missed the tulip reference but for my part i'd rather have tulips on my organ than roses on my pianno

JRobby's picture

They fail to see the "economics" of the situation.

This is understandable in a society where education has gone completely to shit and "conformity is king"

Conforming to a mean descending in value on a downwardly sloping line = CRASH!

Crash of IQ & Intelect.

 

Never One Roach's picture

Most people in the private sector middle class alreayd took a huge hit on just about everything from job cuts to wage freezes.

So the public sector (namely, gubmint employees) will now get a chance to experience the same. Seems like they scream alot louder then the poor private sector.

JRobby's picture

I like the way they scream when I am grinding salt into their wounds.  We already have the scars.

Where are those GOVT BENEFITS now? RE crash coming to Greater DC area as Trump prepares the budget that will send many of them packing for good.

Good riddance maggot parasites!

Sh3epdog's picture

The middle class is/has been gutted. The middle class generally brings stability, and well middle of the road moderation. Looking at how power became increasingly centralized in Rome and the gov more authoritarian as the middle class shrank is a good comparison to where the US has been heading/changing. Early in Rome's history gov was democratic, public servants were actually public servants, gap between rich and poor was less than in later stages of Rome's existence (although strange to say, since countries are fictional entities). Rome went from a free and happy people of farmers and private landowners to serfdom, war, boom bust, loss of identity and moral/cultural relativism.

Marcus Aurelius' writings aren't bad to read at a time like this when likely America's decline and decay will not be stopped, and the right people see the right things should be done, or at the least why things aren't being done well currently, and yet may feel powerless to effect much positive change. It's probebly no coincidence that Loa Tzu was around and supposedly an advisor to a nation in decline - and supposedly left such a position when decline seemed assured, veiwing events during such a time can at least be highly instructive : )

Offthebeach's picture

Slowly edamakation be more gooder.

We now have 4 private HS in my town.  The Pubic HS is losing students.  Eventually Pubic skools will be to education what public housing projects are to housing.  Along that line of thought, Section 8 housing vouchers will be joined by schooling vouchers.

Buzz Fuzzel's picture

One in nine state residents in South Carolina work for the state?

A Nanny Moose's picture

No investments in martime mishap avoidance?

City_Of_Champyinz's picture

Fuck off you worthless fucking link spamming douchebag.

Douche McGoosh's picture
Douche McGoosh (not verified) City_Of_Champyinz Mar 16, 2017 12:02 PM

No, you fuck off you Luddite chimp.

City_Of_Champyinz's picture

Wow what a brilliant comeback, you must be an intellectual POWERHOUSE. 

Douche McGoosh's picture
Douche McGoosh (not verified) City_Of_Champyinz Mar 16, 2017 12:23 PM

You mean like your OP moron??

City_Of_Champyinz's picture

What a shocker, you managed to go even more full retard.  I did not think that was possible. 

Paper Mache's picture

Hmm...your local school obviously missed out on 'Specia'l Educational Needs funding. Run along and play somewhere else. 

GUS100CORRINA's picture

This is certainly a subject that evokes a lot of emotion.

As far as PENSIONS go, who is responsible for the situation in which we now find ourselves?

One Phrase: FED and ZIRP!!!!

Pension Fund Managers needed to go out on the RISK scale, ie., invest in stocks with great dividends to avoid the situation in which we now find ourselves.

Sad, but VERY TRUE!!

The USA CANNOT HAVE A ZIRP POLICY FOR 8+ YEARS WITHOUT UNINTENDED CONSEQUENCES!

END THE FED and SHOOT BY FIRING SQUAD THOSE RESPONSIBLE for this tragedy.

Oldwood's picture

Who is responsible?

ANYONE who believes in something for nothing. That's who.

People have been lining up for years behind these proposals that anyone with a calculator and access to history books could see quite clearly were not sustainable. 

People buying health insurance because it was so much cheaper than paying a doctor or hospital.

People signing onto pension plans that had ridiculuous payouts that are "earned" in ridiculously short periods of time.

Government services that are premised on taxing the rich...not us.

It is ALL bullshit and we ALL know it...always have, but it continues. And for us to believe that magically the world will have an epiphany one day and acquire rationality is absurd. THAT will only happen when the free shit gives out, and when hordes are roaming the streets hungry, and very, very disappointed.

Never One Roach's picture

Bush and Soweto and their appointees are respnsible as well as those who exepcted the gravy train to last foreva!

 

 

swmnguy's picture

Pensions are not "something for nothing."  They are deferred compensation, pure and simple.

Now, trusting an employer to do what they promise is a sure sign of incredible naivete, not to mention a lack of paying attention.  I was first cheated by an employer at about 10 years of age, growing up in farm country, and I'd already seen it happen to my parents a number of times, so I wasn't surprised even so young.

As soon as I'd gathered the skills and contacts, I fired my employer and doubled my salary, cut my workload by about a third and never looked back.

Oldwood's picture

If pensions were salary, they would have been paid at the time the service was provided.

I will GLADLY pay you Tuesday for a hamburger today.

Future promises of treasure are seldom realized and the pension benefits were see in many cases are "treasures" that no typical working person would ever expect to see....Unless you were Hillary investing in cattle futures.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Oldwood Mar 16, 2017 1:38 PM

Agreed. And many, if not most, government pensions were NEVER funded by the employee in order to realize the future retirement payouts.

Take a gubmint engineer making $130K when he retires after 30 years. His pension payout will be around $80K/year plus $20K/year in health care, or $100K total per year. In order to draw that on a savings plan he would have to have at least $3 to $4 million in the plan at our current 0% interest. I seriously doubt that he "contributed" $50K to $100K/year to his retirement plan, out of his pay, in order to properly fund his retirement.

Government retirements have always counted on tax payers to take massive cuts to their actual saved retirements in order to pay the retirements of government - the ruling class - retirees. They just won't tell you that.

Blankenstein's picture

Government pension are always funded by the taxpayer.  Even if the government employee contributes a small portion of "his pay", that portion was part of a salary which was funded by taxpayers.

 

swmnguy's picture

In practice, I totally agree.  Legally, and the way they're pitched to employees, they're deferred compensation and people are bullied to accept less pay in exchange.

I'd disagree about "many" cases of jackpot pensions.  There certainly are some, and we've all heard about them.  Most people get a lot less than that though.

Point being, and I think we agree, pensions are nowadays a scam and best avoided.  Especially now that the fiduciary obligations have been pretty much circumvented.

rockstone's picture

Bullshit. Pensions are something for nothing. The average public sector worker made out like a bandit during their working years. They were denied nothing and they deferred nothing.

BTW....what are you doing now? MLM? It sure reads like you are.
"Fired my employer"

swmnguy's picture

I think you're over-generalizing about public employees.  The people I know who still have jobs with pensions would be making more in the private sector, with the qualifications they have, but they stick around for the pension and benefits.  I think they'll come out OK if they retire in the next couple years but that's about it.

MLM?  Hah!  I coordinate business meetings.  I've actually done a couple MLM conferences.  Holy Crap is that scary to witness.  But most of my clients are Fortune 500 companies or other entities you've heard of.  It hadn't occured to me I probably got that phrase from MLM's.  I thought it was just a clever turn of phrase.  I'll stop using it now.  Ick.  But no, after gaining experience and contacts, and having done hundreds of project budgets, I knew exactly what the market value of my work was, and I knew I was getting paid about a quarter of that amount.  Now I work less, and bill the full market rate for the work I do.  Of course, I also pay the full costs of my employment that my former employer paid in full or in part; the other 7.65% of payroll tax, computers, software and officey crap, health insurance, professional liability insurance, various retirement investment, etc.

But I work from home when I'm not on show site.  And it's a gas to have conference call meetings with corporate executive types from my lavish home office (OK, the dining room table) while I'm wearing pajamas or--should I choose--nothing at all.

Offthebeach's picture

There is private, and then private.

For instance, is General Dynamics private?  

How about GM, Chrysler who were bailed out?  What about Goldman Sachs that in one day was allowed to go from Private Commercial Bank, andthus tits up, to a covered common bank?  Fannie Mae?...Boeing?

A lot of us don't consider F500 companies truly private, as somuch as more rent seeking government sponsored entities 

general ambivalent's picture

Who has time to study history when you work 60-80 hours a week?

Not to mention that most are fed the lie at a young age. Would you have known to question the company's accounting at 18 years of age? Keep in mind that faith in the system was quite a bit higher back in the 60s and 70s (so you're playing a bit of the historian's fallacy). And if you questioned it would you have the guts to risk the isolation and possible loss of a job for demanding payment then and there?

It's really easy to blame the little guy, but also easy to miss the deeper underlying problems in the whole system.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) general ambivalent Mar 16, 2017 5:23 PM

It's not blaming the little guy. The way I see it is that the problem is this: In order to make the "little guy" government employee whole with his huge by comparison, politician promised, pension, the non-government little guy gets his retirement - what he actually saved out of his income, putting it into a retirement savings account for himself - taken from him to pay for the big government retirement. Either way, the little guy gets screwed and the politicians continue to become wealthy.

Oldwood's picture

When you are promised 80% of your pay after 20 years of work, it doesn't take a math major to understand that this is not NORMAL historically speaking. Social security recipients were promised far less and most now understand it ain't happening. The government will bury us all to meet their public pension commitments, and not one single citizen has had the opportunity to agree to any of this shit.

looseal's picture

It's 2% a year of work.  So that would be 40%.  

New hirers are not offered guaranteed pensions in NYS.

Social Security was only intended to be a base below which no one should fall. 

You agreed to this by electing those asshole puppets who run the show.

Offthebeach's picture

In America today always assume they are lying unless they denigh, whereupon it is confirmed. 

nuubee's picture

I am for people who let politicians steal for decades by not voting them out getting their due.

Blankenstein's picture

This is especially the case in Illinois.  All the low IQ dolts here kept voting for the same politicians with the same pie in the sky promises, even in the last few years when it's become apparent the state finances are a disaster.  I will not feel one ounce of sympathy.

Offthebeach's picture

The obviously worse it gets, the more the need for faith.

A good racket is all sorts of thinly plausible renuewel schemes, industrial parks, tax credits for attracting distant hords of wealthy fat businesses to be scalped alive...

general ambivalent's picture

Perhaps you should stop pretending that the Right is doing anything different. It's the same scheme in the same swamp. They steal openly or covertly - and generally it's a combination of both because both parties are in on it.

Same bank is advising your Rightist politicians.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) general ambivalent Mar 16, 2017 5:25 PM

Perhaps you should stop pretending that I am pretending something.

Small government, conservative, politicians are not promoting Ponzi schemes. Big government lefitsts are.