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

Tyler Durden's picture

Authored by Mac Slavo via,

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.


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.


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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Offthebeach's picture

My town had a high school.  Now it has the pubic HS and 4 private or charter schools.  The pubic HS teachers need/want MOAR money for "programs" to attract stupdents and/or edumakate the ever fewer students with MOAR teachers.

MrBoompi's picture

The poor pensioners might discover their money has been stolen.  Hang the fucking bankers or anyone else involved in this nightmare.  Do this and it might not happen again.  

Are We Cross's picture

Trump needs to roll out the Jubilee Program, fuck you jew banks come and get it. Then balance the budget. Problem solved.

RightLineBacker's picture

What Jubilee Program are you referring to?
Google only had a NAACP Jubilee Program.

RightLineBacker's picture

Wikipedia returns: "The page "Jubilee Program" does not exist. You can ask for it to be created"

Got any other great suggestions?

Are We Cross's picture

In this case it's just a reference to debt release. In other words, why do we bother to pay back the banks at all? The sad answer is that they've infiltrated the system to the degree that removal may kill the host, or at least leave it badly fucked.

Seasmoke's picture

Let's hope so. The public parasites. Are the problem !!!

Bam_Man's picture

Fear not, future pension recipients.

The "Tax Donkeys" will make up for any funding shortfalls, however enormous they may be.

Hint: If you own real estate in any of these places (ie. NY, NJ, IL), sell while you still can.

economessed's picture

Social Security is the ultimate pension scam.  Those bastards have been taking my money for years, and I doubt I'll ever see anything out of it.  I'm certainly not counting on it.

Like every function our government manages, we have to wait until the gun barrel is in the mouth of the politician with the hammer pulled back and the finger applying pressure to the trigger before anyone acts.

Reality doesn't care what political party you support.  Reality moves at its own pace and does what it was designed to do.

earleflorida's picture

Social Security was not a monumental pyramid scheme, as is bandied about in todays lexicon!

It was a well thought out program and structured to provide benefits well into the late 21st century.

It was eviscerated by LBJ to pay for Vietnam. And per usual, once the piggy-bank became vulnerable it became a windfall for every indigenous/ immigrant social welfare program (having never contributed), and every other imaginable fix-it for 'snap-crackle-pop' scamers viar DCs politicians.

Tell me? How do you run a business (US Corp. Gov't) when the government has taken on the responsibility of paying the' Rent/ Food/ Clothing&Staples (food stamps) for what is today ~ 20% illegal-undocumented immigrants! 

Md4's picture

Great imagery.


Very true.

Consuelo's picture



Seems someone has a hard-on for Andrew Jackson...



Joe Cool's picture

It's just one party....A two headed monster....One body....

orangegeek's picture

To all you pro union fucks out there - how does it feel now????  If in doubt, call Detroit and they'll explain.


Here's your $20 / month pension - enjoy.



moorewasthebestbond's picture

In a SHTF situation, I'd fear fucked-over pensioners (comprised largely of armed, patriotic Trumptards) more than I'd fear the free shit hordes.


That being said, never in my wildest dreams did I think I'd see the day when twice-daily SHTFplan articles and Michael Snyder artciles would pollute this fine establishment.

PoasterToaster's picture
PoasterToaster (not verified) moorewasthebestbond Mar 16, 2017 10:31 AM

Yeah, you better go back to where it's friendlier to your sort.

Blankenstein's picture

Only 15% of private sector employees receive pensions, so the fucked over penioners will largely be .gov workers i.e. hillary supporters.

moorewasthebestbond's picture

That's an important point you make, but how many other people depend on those 15% for financial support?


A lot... and they're be mortally pissed when they see their moms and dads and relatives getting thrown out into the street.

Blankenstein's picture

Probably a spouse.  The private sector doesn't get to retire at 50 like their public sector counterparts.  If the children are still at home sponging off mom and dad, that is a problem.

4johnny's picture

Just take the combined wealth of all the existing billionaires (2015- biilionaires  1,826 and totals $7 billion) and use it to fund pension promises. 

swmnguy's picture

Where do you think most of that money came from?  Changing the laws to allow replacing 1st World wage-labor with 3rd World wage-labor while keeping prices at 1st World levels, and the retroactive pay-cuts allowed by intentionally defunding pensions and the gutting of fiduciary obligations transferred an enormous amount of money upward from the middle class to the .01%.  The largest transfer of wealth in history, indeed.

It's too late to go back, of course.  That huge wealth transfer is what has kept the US economy appearing to function after having started its decline in the early '70s.  As always, one decision leads to another to another, and now the "real" economy has been almost entirely replaced by sleight-of-hand paper tricks.  This works incredibly well for the very few in position to take advantage, privatizing all profits and socializing all losses.

bookofenoch's picture

The old eskimos are being put out on an ice floe, and they don't know it

401K of Dooom's picture

But, but I thought south Carolina was racist!  The Confederate Flag and all.  Won't the new "immigrants" create new jobs and boost gdp?  I'm sure that John "#PizzaGateMan"  Podesta promised that it would be ok!

lester1's picture

I've noticed CALPERS has bought a large amount of gold mining stocks in the past 2 years.


That's might actually save them in a crash.

Ink Pusher's picture

Calpers will offset their gains with losses from the toxic CDOs they will buy from the Fed, just like the last time..... rehash,rinse and re-sell that debt.

rejected's picture

ZIRP benefits courtesy FRB.

Of course this is seldom mentioned even though it is a primary cause.

We must stay on the good side of our monetary gods,,, ya know!

VWAndy's picture

 Not to worry folks the guards important to the system will be paid. The other clowns not so much.

PoasterToaster's picture
PoasterToaster (not verified) Mar 16, 2017 10:31 AM

What pensions are left?  Government pensions for the states and cities?

Who gives a fuck.  They didn't care when everyone else lost their pensions in the private sector.  Now it's just their turn. 

Fuck these tax parasites.

Blankenstein's picture

This.  And the Illinois gooberment workers are some of the whiniest and smug assholes out there.  Any talk of reducing COLA and they go crazy.  The teachers of many school districts are still frequently threatening to strike if they don't receive pay raises.  The system here is broke, but they still want more.

Only 15% of private sector workers receive pensions.  .gov employees expect the private sector to work until they drop to pay for their gold plated pensions, becasue they earned it.  NO corrupt politicians bought the votes of greedy idiots.  The whole thing was a ponzi from the beginning.  




SummerSausage's picture

Socialists running out of other people's money.  The productive folks who actually produce weath had their pensions replaced with 401k's long ago.

Let the union and government pensions collapse.  It will do them good.

Boonster's picture

Government employees are the laziest of the lazy. They are overpaid and underworked. Tough to feel sorry for them.

Soul Glow's picture

While pensions collapse - due to decreasing bond prices - people are depending more and more on them.  Retirement is setting in for Boomers, a generation who had it easier than any other in the history of the world.  Sure they have PTSD from thinking the Russians are coming and from watching hundreds of thousands of their brothers die in 'Nam, but they experienced the easiest monetary policy the world has ever known and issued more debt than any other nation-state/government has ever before.

They had such a 'hard time' in the 70's what with 'inflation' and all - even though it doesn't even compare with the last decade - but the 80's were prosperous, the 90's saw the tech boom, and by the time they hit the 21st century they had booming 401ks and pensions, they owned multiple houses, and were living the American Dream.  They also benefitted from the greatest increase of technology the world has ever seen.

So now they continue to suck off the almighty dollars tit, one which is bloated from the quest of the USMIC - which the boomers did little to prevent.  These Boomers, have of whom have a self righteous "hippie" attitude, never wanted to stop the wars and the easy oil, for it is a carefree lifestyle that matters most to them.  They want golf or yoga on the weekends, they want a summer home, they want this and that, but their wants are built on easy money policy, massive debt, and the build up of the USMIC to conquer foreign oil fields.

They will never admit these things and will instead demand they "deserve" their SSTF, that their 401k is 'theirs', and they worked hard their whole lives for their money, never understanding what people in the third world deal with, not knowing that because the BLS stats are lies UE is massively higher for the younger generations.  They will take there deserving nature with them to the grave, unless the system falls apart first, at which point they may have to work in a tough environment for the first time in their lives.  Good luck Boomers, maybe you will have you cloud to get off on afterall.

SummerSausage's picture

Only the socialist boomers - lazy government employees and stupid union workers.

The rest of us are just fine.

Soul Glow's picture

No.  You are just as much a part of it as they are.  Just because you didn't have a government job doesn't mean you didn't experience the time when the dollar was fiat, and debt was issued hand over fist.  You have technology like never before, you had easy lending standards your whole life.  Sure your ideals may be different, sure you voted for Bush and Reagan, but they issued debt too.

See you are the perfect example of the problem - because you weren't a government worker you were not part of the problem.  This is laughable.  You were directly responsible by your non-action.  You used the fiat dollar just like everyone else.  Now if you are an ex-pat then nevermind, but as long as you live in the US you sucked off the tit just like all the other "deserving" boomers.

Shift For Brains's picture

I've got a 246 FICO and if you think the 70s inflation was easier than the last decade, the glow isn't your soul, it's your synapses. Your fucking brain is fried.

Can't wait to see how well this gets sorted out by these younger geniuses. Good luck getting anyone to look up from their iPhone to do anything.

tmosley's picture

>I'm an idiot who couldn't even save when begged to do so with 20% rates

Boomers, ladies and gentlemen.

mary mary's picture

Speak for yourself.  When Volcker had interest rates up in the sky, I was saving like mad.

mary mary's picture

One word wrong.  Should have been, "MILLENIALS, a generation who had it easier than any other in the history of the world".

Unless, of course... you still have your draft card.

tmosley's picture

All that student debt and no jobs sure makes things easy.

Remember when you could start your life with nothing, rather than massive negative wealth? Millenials don't.

mary mary's picture

Nobody ever held a gun to my head and forced me to borrow money.  Grow up.

I worked my way through college.  Took me 6 years to get a 4 year degree.  Dug ditches.  Collected garbage.  You name it.  Life is hard.  Nobody cares.  Grow up.

all-priced-in's picture

My 401K & IRA accounts are fully funded and totally under my control.  


I do not have to rely on anyone to fund anything at this point  - but even I am far from safe.  


IMHO when the underfunded pension shit finally hits the fan - laws will be passed to take money in fully funded accounts - like money in 401K & IRA accounts and spread it out over everyone.


I can hear it already - it is not fair that one person has 100% of his retirement funded - and these other people don't.


I have already heard a few elected cock suckers talk about how unfair it is when someone has a Roth IRA account that has built up significant value - and can be withdrawn tax free.






swmnguy's picture

"Totally under your control," eh?  You can handle a 90% stock market dump?  Hopefully you don't have a penny in debt of any kind, plenty of real assets, like tools and the skills to use them, access to food that doesn't have to involve money changing hands, etc.

Almost none of us truly have our "investments" under our control.  For one thing, what most of us now consider "investment" is actually "speculation," and it is most certainly under someone else's control.

Soul Glow's picture

Far beyond that.  How do you think HF can lock in your account?  Because it is not yours, you have pledged it to them.  How did Cyrprus take deposits?  Because checking/savings accounts are unallocated.  Banks own the cash in the vault, they just said they might pay you back if you ask for it back.

Once people realize that they only thing they own is what is in their hands we will be better off.  Until then thean we the people have no power to control our money.

all-priced-in's picture

Totally under my control yes absolutely.


I can have my car totally under my control and drive it into a lake - if that is what I choose to do.


Under my control doesn't mean everything will turn out good  - but I make 100% of the investment decisions.


But it seems better than having to depend on a state government or private company to pay me what they promised.












swmnguy's picture

Your inputs are under your control.  Won't disagree with you there.  And I agree with not relying on someone else to look after one's own best interests.  But I think you're still speculating in a rigged casino.  As am I; I'm not saying I've got this licked.

I also consider paying off my mortgage, fixing the machines I own and paying for tools to be actual investments, far more under my own control, rather than my various speculations.

mary mary's picture

90% stock market dump?  Improbable, Captain.  20%?  Of course.  50%?  Infrequently, but inevitably.  90%?  When?

Soul Glow's picture

Your 401k has an owner, just like your checking account is ownded by the bank you have it in.  Both are unallocated accounts - you have loaned that money to the bank and financial agent running your 401k and they can renig on paying you back.  This is how banks in Cyprus took everyone's cash, banks have that right.  You own nothing that isn't in your hands.

all-priced-in's picture

I will not disagree with you -


In fact that was sort of the point of my post -


Even though I have the cash in my account - that doesn't stop the government from taking it.  


Basturds could pass a 90% tax on all 401K accounts above $1 million.


The sad thing is about 90% of the population would cheer this move - because they don't have $1 million in their 401K they don't give a fuck - and it will just mean more free shit for them.


Old folks will support taking 401K cash so they can get their SS check - I have no doubt.