[quote=bearishgurl]Uhhhhh, phaster, may I ask what you DO for a living?
Inquiring minds would be interested to know.[/quote]
[quote=bearishgurl][quote=phaster][quote=livinincali]The one benefit of defined benefit contribution plans, retention, isn’t worth the risks, the frauds, the vote buying, and everything else it enables. That’s the bottom line. The rewards (reduced training costs retention, etc.) don’t outweigh the risks and therefore they should be scrapped..[/quote]Agree! And after doing some research, seems the best way forward is to follow the example set by the Thrift Saving Plan (a federal government 401K style program, that can’t be corrupted/mismanaged like what happend at CalPERS or as what is happening with the SD pension program)
“The Thrift Savings Plan, used by millions of federal workers, is like a 401(k), except it’s a lot cheaper. Last year it charged an average expense ratio of a mere 0.03%. That means just $3 in fees for $10,000 in savings, or $30 for a $100,000 portfolio.
John Turner, an economist and director of the Pension Policy Center and a former federal worker himself, said “Unless they’re advanced investors, I think they should leave their funds in the TSP because it’s simple and it’s easy enough that most investors can do it and do it well”
W-a-a-a-ay back in the day, I was a payroll clerk employed by the Dept the Defense and can tell you with certainty that the TSP was the best plan in existence to supplement the DB plans for CSRS or FERS members (at that time). Any Federal employee who retires today (or in recent years) and elects to transfer their ENTIRE TSP investment to another vehicle upon retirement is a fool.
‘Nuff said.[/quote]
Because an investment retirement strategy in powerball DID NOT perform as expected, I can neither confirm nor deny what I do for a living
The powerball financial setback, has forced me to consider if I did hava a CV, what to state under Research/Skills given my qualifications, “a self-unmotivated full-time multi-slacker who specializes in beer·ology!”
Moving on, since you have some DOD experience/exposure, perhaps you have heard the expression win the battle but lose the war
I can only speculate but if DOD/treasury were to commission a threat assessment on public pensions, the plain speak summary would read TPTB are $hitbirds who have no grasp of the STRATEGIC picture and as a result TACTICS are driven by ad hoc economic/political self interest and existing OPERATIONS are a “corrupt” cluster-fuck!
As to how a hypothetical threat assessment study relates to the expression win the battle but lose the war, one would expect public pension advocates like politicians/lawyers are going to win a few delaying tactic battles along the way, but ultimately because of pension-math denialism, the war on improving the US economy will be lost and the cost paid by the “average” citizen will be high!
(analysis based on supporting data)
[quote=phaster]
now back to the serious topic at hand since this is an economics message board where it clearly states at the bottom of the page… In God we trust. Everyone Else Bring Data!
BUT before looking at data, it might be useful to recall lessons taught in middle school, specifically the topic about “compound interest” and basic money management skills (which is key to surviving/thriving day to day in the modern day world)
if you have a mortgage, then perhaps you might have heard that you can pay off a loan much faster, by “annually” making an extra — 13th — mortgage payment,… what an extra mortgage payment does is directly reduces the principal balance on the loan by the amount of the payment (and the observed effect is exponentially decreasing the payback period)
NOW lets (re)examine ACTUAL “historic” published documents/text (i.e. Data!)
City pensioners get ’13th check’ bonus
More than $6.1 million has been distributed to retired San Diego city employees in the form of a “13th check” — beyond their usual 12 monthly payments — making this year’s holiday bonus the largest such payout in the history of the three-decade-old practice.
But it’s become a source of conflict as the city’s pension system faces a $2 billion shortfall in promised payments, which remains a taxpayer burden and has led to budget crises in the past at City Hall.
Though SDCERS investments were earning well above the 8 percent rate of return estimated by the system actuaries, under normal conditions investments surpluses are required to make up for below-average returns in other years to achieve the average rate of return. Therefore, unless the actuaries’ estimates are grossly incorrect, in the long run true “surplus earnings” are impossible. The use of surplus earnings for the purposes other than maintaining the pension system, such as to expand existing benefits should be viewed as a loan from the system THAT WILL REQUIRE REPAYMENT IN THE FUTURE.
The concept of surplus earnings is easily misunderstood, so sometimes these earnings are used inappropriately.
page 286
Handbook of Frauds, Scams, and Swindles: Failures of Ethics in Leadership edited by Serge Matulich, David M. Currie
anyone able to grasp the power/implications of “compound interest” then reading the published reports should be very disturbed at the mis-management/incompetence/corruption since the PRIMARY CAUSE as to why the “magnitude” of the SD public pension “unfunded” problem exists is due to a simple math concept that was suppose to be learned in middle school…
as-reported for the past three decades the “surplus earnings” (aka 13th payment) was diverted to Gubment-Pensioner(s) every holiday season INSTEAD OF being used for the original goal of trying to make sure the long term average return of the portfolio was achieved(about about 8% as per actuaries’ design-estimates)
if anyone is able to think critically about “compound interest” then they will see that making an annual extra mortgage payment and making an extra payment to Gubment-Pensioner(s) every holiday are two side of the same coin; one side allows a mortgage debt to be paid “down” much sooner, the other side makes the debt to pile “up” exponentially over decades!
(bearishgurl) since you have taken the blue pill – its apparent you believe whatever you want to believe!
for all other(s) who dared take the red pill, the BOTTOM LINE seems to be as long as the “surplus earnings” (aka 13th payment) is siphoned off every holiday season for Gubment-Pensioner(s) INSTEAD OF being used to maintain the pension system designed target return rate, the SD pension system as currently structured/operated AND using nothing more than “honest” common sense and middle school math tells us, that the un-funded DEBT issue will basically ALWAYS grow!
[quote=phaster]
from what I have seen, the root cause of the problem is corruption (and if somehow that was fixed then lots of other problems get resolved)
a few months ago a neighbor (who own a few properties in the neighborhood) and he shared that some in the neighborhood were trying to build support for local park
when I looked at the project calculated it was a hundred million dollar pork barrel project
basically like a corrupt corp that under-bids a project then charges cost over runs, seems estimated costs were much less than what seems to me as a common sense cost approach (but what do I know) FYI the project was being supported by RE interests and some local politicians (go figure)
this is just another example of local corruption/self interest destroying the economy from w/in
ironically this past week there was a news video that was about a program trying to help homeless people in the area by requiring them to have one-on-one financial counseling (which seems to be a good start)
I have to admit I didn’t really care or understand the nature of public pensions (till a few years ago), but as I see things it requires politicians to admit the system is corrupt and since they have an economic/political self-interest in hiding the truth there is very little hope to avoid a crisis of biblical proportion.
nothing will be fixed for a long time (if at all) for the simple reason in order to fix a problem, first one must admit that there is a problem and have the mental ability to understand the complex nature of the system.
one only has to read the newspaper to see that local politicians share economic traits much in common with corrupt companies/official like in the ENRON corp
actually the guy that helped me understand my sewer line issue told me stuff has been going on for years and over sights like a ex-council member who got a permit to build a garage (right on the property line, contrary to stated set-back rules which are clearly stated) in the neighborhood just after he was termed out and ran for higher office (years ago) is no different that what happened to me…
government corruption is just like a fractal (because the pattern reappears over and over again, at different levels of government)
my own look at the data shows the system is corrupt and there is no economic incentive to admit there is anything wrong (which IMHO is going to play right into the hands of foreign powers that are playing the long “economic” warfare game against the USA)
bottom line I can’t imagine foreign powers ignoring easy to exploit useful-idiots (as well as corrupt politician) who want to keep their unsustainable public pension (in play) as a diversionary tactic against the USA in the realm of geo-politics[/quote]
