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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shovelhead's picture

Nope.

I'm taking it from you...

You'll have to take it from the unborn...Lolololol.

strannick's picture

@nuubee"Funny, I thought that's what all boomers said their entire lives. "Don't take from me, Take it from the unborn."

-yea, then they aborted the unborn, creating a demographic -and metaphyical- hell

TheAntiGov's picture

Hey nuubee, since when have elected politicians actually followed the will of the people? When you hear the term sheeple, look in the mirror. You've been lead to believe "boomers" voted to hurt their children and grandchildren. The government wants class war fare, so when the world wide economic collapse happens, we kill each other for them. 

nuubee's picture

Since when have boomers done anything other than rack up debt they can't pay?

Chuck Walla's picture

Hard to take from the "unborn" when your politics advocates killing them en masse in the womb. They were the Ponzi base, now they are nameless parts sold to fund Democrat politicians.

CorporateCongress's picture

If people do the math they will see that 8.66% contributions to pensions aint nowhere near enough. Lets calculate in real interest rates and pretend they will be 0% (we will be lucky to get 0% real growth in the future). Now after 40 years of paying this will end up at less than 5 years of pay. Now some people will die, but still even if half is gone you would have only 10 years of pay to live on. This will likely not be enough...

PT's picture

The numbers aren't real.  They've been hacked.  All govt needs to do is either stop hacking the numbers or change the way they hack the numbers.

All that really matters is production.  And distribution.  Then re-insert the numbers to maximize production and distribution.  Given that govt are hacking the numbers anyway, it's not like this is beyond them.

not dead yet's picture

The boomers earned their way into retirement. The young safe spacers make up self serving bullshit about other generations robbing them have been spending their retirement from the day they were born. The latest generations, thanks to Madison Avenue programming kids to buy shit and the education industry looking to get their seats and pocketbooks filled as they indoctrinate, have been raised as spoiled pussies since their first breath as parents listened to the experts and never made them get a job or do chores, praise them them when they are being POS instead of taking them to the woodshed and a belt liberally applied to their backside, and give them all the money and comfort they need so they can all go to college instead of getting a job and not going to indoctrination U. Raised as royalty even in poor homes as parents sacrificed to give their kids a better life as told to them by the experts.

Croesus's picture

@ LSD:

My advice to younger readers:

Remove yourself from ownership of your assets. There are a lot of different options here, so doing your dd and paying for good advice equals time & money well-spent.

"THEY" can't take what you don't own.

Single guys should pay attention here:

Many marriages end in divorce. "Hope for the best, plan for the worst"; divorces can be miserable for everyone involved, and the legal system is geared against men. While all of us hope it never happens, the fact is, it does.

By entering a marriage with no assets, but control over them, you severely limit what a court can order you to give your soon-to-be ex.

A friend of mine in the insurance business recently went through one. He and his ex-wife settled on reasonably friendly terms, but he's still paying out close to $10k/month...when he could have paid a whole lot less.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) Croesus Mar 16, 2017 11:47 AM

I agree completely and have thought about it often: Should I transfer ownership of my property (paid off my mortgage early) to a trust, hiding my ownership, etc?

Then I think... Well, the government will simply change the laws to be able to take what I've earned so what's the point? This is one of the reasons I won't do a Roth IRA. The government "promises" that it won't tax my withdrawals in the future. I know what government promises for the future are worth, especially when the government is desperate for more vote buying money.

In the end, the government will make all of us poor by deflating the debt, and personal savings, away.

Countrybunkererd's picture

The system is designed so that you MUST play.  There are a few ways around things, but each case is different.  For example financial aid exempts IRA's as an asset but your savings account must be declared as an asset... more for the squid. 

Bwana's picture

California is a classic example of a State that has no qualms about changing the state's laws to suit their goals. I bought standard capacity magazines for two pistols in 1996. Nobody made or had heard of reduced to only holding ten cartridge magazines when the pistol was designed to hold 14 cartridges. However in 2000 magazines that hold over ten cartridges could no longer be sold in the state. As part of this new law was a provision that the owners of standard capacity magazines which hold more than ten cartridges could keep and use them if they could prove they bought them before January 1, 2000. Now they just passed a law that anyone in possession of a standard capacity magazine that holds more than ten cartridges in the state of California will be charged with a felony. 

rockstone's picture

That's why I no longer contribute to a qualified plan. They'll change the tax policy of that sooner or later. As a small business owner I have a little flexibility on what I pay and would rather pay the tax now rather than defer. Who knows what the rates will be later and there's a great bet that's it's going to be much higher. Another concern is that it will no longer be taxed as regular income and negate deductions available now and for distributions over a certain threshold, an excise tax may apply. All of that is in the realm of possibility.
Or worse, it'll be completely sucked up into the general fund and paid out as part of SS, as has been discussed

I'm 58. I plan on beginning to start taking out what I already have the minute I hit 591/2. I believe I'll pay a lot less tax today then say in 10 years, maybe less time than that, from now now. I still plan to have earned income then too so forget the "but you'll be in a lower tax bracket!" BS.

There is almost no way people my age don't get burned on qualified money sometime between now and dead.

Ace Ventura's picture

+1000 Any legal construct (aka Roth IRA) we attempt using to avoid getting fleeced by gubbermint will simply be changed at the whim of the thieves the moment it suits them. Trusts, LLCs, lord knows what else. They will simply change the rules....or hell, at the rate and increasing boldness they're showing, they might not even bother changing the rules and just say 'fuck you, peasant...what are you going to do about it?'

Please remember....the Con-gress has ALREADY held hearings on how to best confiscate.....errr, transfer into a gubbermint-secured account.....your private retirement funds.

If they're considering it.....its because THEY'RE CONSIDERING IT.

Jubal Early's picture

So you are saying they should hire a shyster lawyer to set up a trust, possibly offshore?  Pay for tax compliance costs and all the complexity?  How about simply not associating with low lives and marrying into a good family?

Omen IV's picture

"How about simply not associating with low lives and marrying into a good family"

what is a "good" family when women have peer review and influence in terms of lifestyle and values

 

system broke down long ago for family values - once post menapausal all bets are off!

general ambivalent's picture

Keeping in mind that menopause now starts at 20. That's basically what the pill does to women's brains. Combined with a little feminism and you have a bioweapon spreading throughout the Western world.

JRobby's picture

Marriage is the realm of laws and lawyers. STAY THE FUCK OUT OF IT FOR GOD'S SAKES!!!!!

Shift For Brains's picture

Excellent advice, as is much of what you write. It's hard to blame others for blowing up our life when a little bit of forethought and planning could have saved our ass. The older you get, the easier it is to say, "No, I don't think I want to do it your way."

general ambivalent's picture

How about, 'Hope for the worst, plan for even worse than that'?

runswithscissors's picture

You could take every dime from the corrupt leftist scum and still not make the pension funds solvent...however it would be great to hang them...that may discourage some of the future corruption

ds's picture

Yes. Pension is one of the critical pillars to sustain a middle class. Its erosion is just one more symptom of the diminishing middle class. Preys will get some social security handouts to wither in indignities. Meantime, the stealthy erosion of values , not ruling out frauds, take place. The preys shall continue to pay for useless investment advisors, pension administrators, to erode their wealth and be called muppets by them. 

The matrix predators know this as pension assets are meant to be gobbled not sustained.

ATM's picture

Come out ahead? You will be happy if you come out alive.

sessinpo's picture

Almost no one comes out ahead. One will be lucky to come out alive.

Offthebeach's picture

The rape on savings accounts is already an inflationary, wealth attack.  Coupled with Obamacare tax you today and sure you will have care tomorrow.   Throw in too big to fail bailouts to banks, Fed Reserve taking crashed assests out of sheeples possible purchases, and paying interest to crony banks.  

No savings.  No pension returns.  More sheeple taxe money to banks.  Real goods inflation.  No wage growth in decades.  Hords of wage destroying immigration. 

Yeah, this will end well.

Zorba's idea's picture

Perhaps all these toxic Pension Funds could be consolidated into their own BitCoin style fund securitized by some hypothecated future value for good intentions. There has to be an algorythm some HFT could devise...someone James or Lloyd could recommend

chubakka's picture

well,  you'll have grandpa home invading you so be ready.  

mary mary's picture

I had a dream, and in the dream half of the Millenials disappeared from the Planet.  And then... nobody noticed.

LowerSlowerDelaware_LSD's picture
LowerSlowerDelaware_LSD (not verified) mary mary Mar 16, 2017 11:06 AM

I noticed a lot of phones laying around not being used.

Row Well Number 41's picture

"I had a dream, and in the dream half of the Millenials disappeared from the Planet.  And then... nobody noticed."

 

I had a dream that half the Boomers disappeared, and most of our entitlement problems were solved.

PT's picture

If UN Agenda 21 and the Georgia Guidestones are anything to go by, you will both get your wish plus some more.

buzzsaw99's picture

omg you wanna talk about tiny hands? look at the dude running the nsa, that guy is a freak of nature.

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 blue sky while stray dogs lift their legs and "mark" you.

Shift For Brains's picture

 

"Die spitting blood on a dusty windblown street under a brilliant blue sky while stray dogs lift their legs and "mark" you."

Ladies and geraniums, I think we may have just witnessed the blossoming of our present moment's Hemingway. Damn, that was a great line.

JRobby's picture

They sell their shit with imagery. So do I. We all do.

wcole225's picture

Mr Tiny Hands will solve it with his big brass balls. When the country implodes whether it be thru financial collapse or civil war he'll be the one leading the charge to do what's necessary by any means necessary. PC and compromise aren't in his dictionary. MAGA!

buttmint's picture

...something massive swept under the rug?
Yes...American exceptionalism.....aka ".....one fresh dog turd ???? stepped on with one's bare feet."

Got any other stupid questions Mr. PONZI. Time to sell off some tulip bulbs!

GunnerySgtHartman's picture

All the more reason to have your OWN 401k plan and NOT rely on public or private pension plans.

GunnerySgtHartman's picture

Do you anticipate the government confiscating all 401k plans at some point?

JRobby's picture

Those should weather the upcoming storm nicely! If you are planning to die in 4 days.

The movement from defined benefit (insurance annuity) plans to 401k was BY DESIGN. Who's design? Who do you think?

100 million investment managers instead of a few hundred thousand. Who does that serve from a fee standpoint?

Don't stand on the rug.

Buck Johnson's picture

This is going to end badly.

 

 

nuubee's picture

I can't wait to see all the old-people riots.

JRobby's picture

I'll take "Mayhem in the streets and the collapse of society" for $1,000 Alex!!!!!

shovelhead's picture

I'm not going to riot.

But don't come within shooting distance of my front porch. Got a rocker for relaxin and a hard chair for shootin and a pistola for yard work.

Dakota Kid's picture

I believe you and I would get along well together and make good neighbors that watch each others back.

shocktherapy's picture

White riot - I want to riot
White riot - a riot of my own
White riot - I want to riot
White riot - a riot of my own  The Clash

Public pensions got their start with various 'promises', informal and legislated, made to veterans of the Revolutionary War and, more extensively, the Civil War.(1870 87% white population) They were expanded greatly, and began to be offered by a number of state and local governments during the early Progressive Era in the late nineteenth century. Federal civilian pensions were offered under the Civil Service Retirement System (CSRS), formed in 1920.(89% white population). Pension plans became popular in the United States during World War II, when wage freezes prohibited outright increases in workers' pay.(1950 89% white population) So why are your taxes going up ? And who are they going to ? When this blows up, dont be surprised who's sneaking into your prepper hideout.